KUNDAYAM SERVICE CO-OPERATIVE BANK LTD. NO.3259 vs. THE INCOME TAX OFFICER
What did the High Court hold?
The High Court allowed the writ petition, directing the Income Tax Officer not to proceed with the recovery of the demand for assessment year 2017-2018 until the stay application (Ext.P4) is disposed of by the third respondent (Income Tax Appellate Tribunal). The Court found that the reliefs prayed for by the petitioner could be granted, considering the nature of the challenges raised. The operative direction is to stay recovery proceedings pending the disposal of the stay application by the ITAT. No specific issue was left undecided, as the Court granted the immediate relief sought.
What were the facts?
The petitioner, Kundayyam Service Co-operative Bank Ltd., filed its return of income for assessment year 2017-2018 declaring nil income. The Income Tax Officer issued notices under Section 143(2) and 142(1) of the Income Tax Act, questioning the petitioner's eligibility for deduction under Section 80P. The petitioner's first appeal before the Commissioner of Income Tax (Appeals) was partly allowed. Subsequently, the petitioner filed a second appeal before the Income Tax Appellate Tribunal (ITAT) and also sought a stay of recovery proceedings. The present writ petition was filed seeking a direction to the Income Tax Officer not to proceed with the recovery of the demand for assessment year 2017-2018 until the ITAT disposes of the stay petition.
What were the issues?
1. Whether the Income Tax Officer should be restrained from proceeding with the recovery of demand for assessment year 2017-2018 until the Income Tax Appellate Tribunal disposes of the stay petition filed by the assessee? Assessee's Contentions: The assessee argued that recovery proceedings should be halted until the stay petition before the ITAT is decided. They relied on the fact that a second appeal and a stay application were pending before the Tribunal. Revenue's Contentions: The judgment records that both sides were heard, but it does not explicitly detail the revenue's arguments against the stay of recovery proceedings. However, by being a party to the writ petition and having their counsel present, it can be inferred they were opposing the petitioner's prayer for a stay.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Cause title — parties, addresses and appearances
JUDGMENT
The prayers in this Writ Petition filed under Article 226 of the Constitution of India are as follows:- “(i) to issue a writ of mandamus or any other writ, order or direction, directing the 1st respondent not to proceed with recovery of the demand based on the assessment order for the year 2017-2018, till Ext.P4 stay petition disposed of by 3rd respondent Tribunal; (ii) to issue a writ of mandamus or any other writ, order or direction, directing the 1st respondent not to proceed with recovery of the demand based on the assessment order for the year 2017-2018, till Ext.P3 appeal disposed of by 3rd respondent Tribunal; and (iii) to grant such other relief’s as this Honourable Court may deem fit in the circumstances of this case.”
Heard both sides.
The petitioner is a Primary Agricultural Credit Society Registered as per the provisions of the Kerala Co-operative Societies Act. The petitioner had filed its return of income for the assessment year 2017-2018, declaring nil income. Later, the petitioner was served with a notice under Section 143(2) of the Income Tax Act, followed by a notice under Section 142 (1) on the premise that the petitioner is not eligible for the deduction under 80P of the Income Tax Act.
The petitioner preferred first appeal before the 2nd respondent which was allowed partly. Later, the petitioner had preferred second appeal (Ext.P3). The petitioner also prayed for the stay of the recovery proceedings as per Ext.P4 application.
Now, the petitioner has prayed for giving direction to the 1st respondent not to proceed with the recovery of the demand based on the assessment of the 2017-2018 till the disposed of Ext.P4. Having regard to the nature of challenges raised by the petitioner, this Court feels that the reliefs prayed for can be granted. Therefore, first respondent is directed not to proceed with the recovery of the demand based on the assessment order of the year 2017-2018 till Ext.P4 application is disposed of by the third respondent. The Writ Petition (Civil) is disposed of accordingly.
K.BABU JUDGE VPK
Appendix — schedule of exhibits
More judgments on Section 142(1)
- Sar Business Tradelink Private Limited… vs Income Tax Officer, Ward - 1(2), RaipurITA 599/RPR/2026[2014-15]Status: Heard21 Oct 2026AY 2014-15
- Subhash Chand Saini, Jaipur vs ITO Ward, Behror, BherorITA 36/JPR/2023[2017-18]Status: Disposed21 Oct 2026AY 2017-18
- Hemal Paresh Madeka, Rajkot vs Asst.Commissioner of Income Tax…ITA 955/RJT/2026[2020-21]Status: Disposed19 Oct 2026AY 2020-21
- Venish Vinodray Lalani, Rajkot vs Income Tax Officer, MorbiITA 197/RJT/2026[2019-20]Status: Disposed19 Oct 2026AY 2019-20
- Gaurav Jiteshbhai Joshi, Rajkot vs Income Tax Officer, Ward 1(1)(1), RajkotITA 1000/RJT/2026[2022-23]Status: Disposed19 Oct 2026AY 2022-23
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