THE PULAPATTA CO-OPERATIVE URBAN CREDIT SOCIETY LTD., vs. THE INCOME TAX OFFICER,

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WP(C)/17748/2019HC KeralaKLHC01045465201901 July 2019Bench: HONOURABLE MR.JUSTICE S.V.BHATTI5 pages
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What did the High Court hold?

The High Court held that the order of the Commissioner of Income Tax (Appeals) (Ext.P4) does not warrant interference under Article 226 of the Constitution. The Court found that the 2nd respondent had sufficiently considered and applied their mind to the issue while granting the stay, taking into account CBDT directions and the merits of the matter. Therefore, the first ground challenging the onerous condition failed. However, the Court considered the alternative submission for an extension of time for the first installment to be in the interest of justice. Accordingly, the operative part of Ext.P4 was modified to allow the petitioner to commence payment of the installments on or before July 30, 2019. The writ petition was disposed of with this modification.

What were the facts?

The petitioner, Pulapatta Co-operative Urban Credit Society Ltd., is challenging an assessment order (Ext.P1) before the Commissioner of Income Tax (Appeals) (2nd respondent). The petitioner filed a stay petition (Ext.P3) seeking to stay the recovery of the demand raised in Ext.P1. The 2nd respondent, through Ext.P4, granted a stay of recovery of 80% of the demand until the disposal of the appeal or for six months, whichever is earlier. However, a condition was imposed requiring the petitioner to deposit 20% of the demanded tax in five equal monthly installments, starting from June 2019. The petitioner filed a writ petition challenging this condition as onerous and alternatively sought an extension of time for the first installment.

What were the issues?

1. Whether the condition imposed by the Commissioner of Income Tax (Appeals) in Ext.P4, requiring the deposit of 20% of the demanded tax in five equal monthly installments, is onerous and incompatible with the merits of the appeal concerning the claim of deduction under Section 80P? Assessee's Contention: The petitioner argued that the condition of depositing 20% is very onerous and not compatible with the merits canvassed in their appeal. Alternatively, they sought an extension of time for making the first installment, proposing to start payment on or before July 30, 2019. Revenue's Contention: The judgment does not record any specific arguments made by the revenue. However, it notes that the 2nd respondent considered the directions issued by the CBDT and the merits of the matter while granting the stay.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI MONDAY, THE 01ST DAY OF JULY 2019 / 10TH ASHADHA, 1941 WP(C).No.17748 of 2019 PETITIONER/S: THE PULAPATTA CO-OPERATIVE URBAN CREDIT SOCIETY LTD.,NO. 7445, PULAPATTA P.O, UMMANEZHI, PALAKKAD 678 632, REPRESENTED BY ITS SECRETARY, JAYASANKARAN K, AGED 40, S/O. KUTTYRAMAN. BY ADVS. SRI.HARISANKAR V. MENON SMT.K.KRISHNA SMT.MEERA V.MENON RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD 3, AYAKAR BHAVAN, PALAKKAD 678 014 2 THE COMMISSIONER OF INCOME TAX (APPEALS) SAKTHAN NAGAR, THRISSUR 680 001 SRI. JOSE JOSEPH, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.17748 of 2019 2 JUDGMENT Heard Sri. Harisankar. V. Menon, for the petitioner and Sri. Jose Joseph, for the respondents.

2.

The petitioner, a Co-operative Bank is, aggrieved by Ext.P1 assessment order in appeal before the 2nd respondent. The petitioner moved Ext.P3 stay petition praying for stay of recovery pursuant to Ext.P1 assessment order. The 2nd respondent through Ext.P4 considered and granted stay of recovery of the amount determined in Ext.P1 by imposing a condition of depositing 20% of the tax demanded in five equal installments. For convenience, the operative portion of the order of Ext.P4 is extracted herein:- The issue involve the claim of deduction u/s.80P disallowance. In the totality of the facts, I deem it proper to stay 80% of the demand till disposal of appeal or 6 months whichever is earlier. 20% of the balance demand in five equal monthly installment starting from June, 2019 should be paid. The Assessing Officer shall monitor the payment of demand and report and default on part of the appellant. Any default on part of appellant to pay demand will invite revocation of stay granted.

WP(C).No.17748 of 2019 3 3. The petitioner challenges Ext.P4 firstly, by contending that the condition imposed of depositing 20% is very onerous and is not compatible to the merits canvassed by the petitioner in the appeal. Alternatively submits that, the petitioner can be given extension of time for making the first installment. In other words, the request is to start the payment, of first installment on or before the 30th day of July, 2019.

4.

Ext.P4 is an order made by the 2nd respondent by keeping in view the directions issued by the CBDT and also the merits of the matter. There is sufficient consideration of and application of mind to the issue by the 2nd respondent while granting the stay order. I am convinced that Ext.P4 does not warrant interference of this Court in exercise of its power of review under Article 226 of the Constitution of India and hence the first ground against Ext.P4 fails.

5.

The next submission of Sri. Harisankar. V. Menon is that the petitioner may be permitted to comply with the order by starting the payment of the installments on or before 30th of July, 2019. To meet the ends of justice this prayer could be considered and accordingly accepted. Having regard to the

WP(C).No.17748 of 2019 4 above, Ext.P4 order reads thus:- The issue involves the claim of deduction u/s.80P disallowance. In the totality of the facts, I deem it proper to stay 80% of the demand till disposal of appeal or 6 months whichever is earlier. 20% of the balance demand in five equal monthly installments starting from on or before the 30th day of July, 2019 should be paid. The Assessing Officer shall monitor the payment of demand and report and default on part of the appellant. Any default on part of appellant to pay demand will invite revocation of stay granted.

The Writ Petition stands disposed of, accordingly.

Sd/- S.V. BHATTI JUDGE ajt

WP(C).No.17748 of 2019 5 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2016-17 EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2016-17 EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2016-17 EXHIBIT P4 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2016-17

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