PEROORKADA SERVICE CO-OPERATIVE BANK LIMITED vs. THE INCOME TAX OFFICER

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WP(C)/31780/2022HC KeralaKLHC01067484202207 October 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the National Faceless Appeal Centre to provide a link to the petitioner for uploading stay petitions within one month of receiving a copy of the judgment. If the petitioner files stay applications within 10 days of the link being provided, the recovery steps for amounts due under the assessment orders for assessment years 2012-2013 and 2018-2019 will remain suspended until a decision is taken on the stay petitions. The court did not decide on the merits of the Section 80P deduction claim or the validity of the assessment orders themselves, but rather focused on the procedural aspect of enabling the petitioner to file stay applications and suspending recovery pending a decision on those applications. The ratio is that in cases where appeals are pending and stay applications are to be filed, recovery should be deferred until the stay applications are decided, provided the petitioner acts promptly.

What were the facts?

The petitioner, Peroorkada Service Co-operative Bank Limited, is challenging assessment orders for assessment years 2012-2013 and 2018-2019. The assessing authority rejected the petitioner's claim for deduction under Section 80P of the Income Tax Act. Appeals were filed against these assessment orders. The petitioner's grievance is that demands for payment have been made despite the appeals pending before the appellate authority. The petitioner also states that stay applications filed before the assessing authority were granted only upon payment of 20% of the assessed amount. The petitioner contends that the denial of Section 80P deduction was erroneous and that no demand would have arisen if the matter had been properly considered.

What were the issues?

1. Whether the petitioner is entitled to a deduction under Section 80P of the Income Tax Act, 1961, for the assessment years 2012-2013 and 2018-2019. 2. Whether the demands for payment of amounts due under the assessment orders are premature given that appeals are pending. Assessee's Contentions: The petitioner argues that the deduction under Section 80P was wrongly denied. They contend that if the deduction had been correctly allowed, there would be no demand outstanding. Therefore, the demands made are unjustified. Revenue's Contentions: The judgment records that the learned Standing Counsel appearing for the Income Tax Department was heard. No specific arguments or reliance on authorities by the revenue are detailed in the judgment.

Which sections of the Income-tax Act were involved?

Section 80P

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Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 7TH DAY OF OCTOBER 2022 / 15TH ASWINA, 1944 WP(C) NO. 31780 OF 2022 PETITIONER: PEROORKADA SERVICE CO-OPERATIVE BANK LIMITED NO.T.1412 PEROORKADA P.O, THIRUVANANTHAPURAM DISTRICT, KERALA, PIN-695005 REPRESENTED BY ITS SECRETARY, PIN - 695005 BY ADV C.A.JOJO RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-2(1), KOWDIAR, TRIVANDRUM-695003, PIN - 695003 2 COMMISSIONER OF INCOME TAX (APPEALS)-1 OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOWDIAR, TRIVANDRUM-695003, PIN - 695003 3 THE PRINCIPAL COMMISSIONER OF INCOME TAX OFFICE OF THE COMMISSIONER OF INCOME TAX, KAVADIYAR P.O, TRIVANDRUM-695003, PIN - 695003 4 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110001 , PIN - 110001 5 INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110001 , PIN - 110001 OTHER PRESENT: ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.31780/2022 -2-

J U D G M E N T The petitioner suffered orders of assessment for assessment year 2012-2013 (Ext.P1) and for assessment year 2018-2019 (Ext.P8) under the provisions of the Income Tax Act, 1961. The petitioner's claim for deduction under Section 80P of the Income Tax Act was rejected by the assessing authority. The petitioner has filed Ext.P3 appeal against Ext.P1 assessment order and Ext.P10 appeal against Ext.P8 assessment order. The grievance of the petitioner is that even when the appeals were pending consideration of the appellate authority, demands have been made for payment of amounts due under Ext.P1 and P8 assessment orders. It is also the case of the petitioner that though the petitioner filed applications for stay before the assessing authority, such stay was permitted only on payment of 20% of the assessed amount. It is the case of the petitioner that deduction under Section 80P of the Act was wrongly denied and has matter been properly considered the petitioner would not have faced any demand whatsoever.

2.

Heard the learned Standing counsel appearing for the Income Tax Department also.

3.

Having regard to the facts and circumstances of the case and considering the orders issued by this court in similar circumstances, this writ petition is disposed of directing the National Faceless Appeal Centre to provide a link to the petitioner for uploading stay petition in Ext.P3 and Ext.P10 appeals within a period of one month from the date of receipt of a copy of this judgment. If the petitioner files applications for stay within 10 days from the date on which the link is provided by the National Faceless Appeal Centre, steps for recovery of any -3- amount due under Ext.P1 and P8 orders of assessment for assessment years 2012- 13 and 2018-19 respectively shall remain suspended till a decision is taken on the stay petitions filed by the petitioner. GOPINATH P. JUDGE AMG -4-

Appendix — schedule of exhibits
APPENDIX OF WP(C) 31780/2022 PETITIONER EXHIBITS Exhibit P1 EXHIBIT-P1: A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2012-13 DATED 23.12.2019 ISSUED BY THE FIRST RESPONDENT Exhibit P2 EXHIBIT P2: A TRUE COPY OF THE DEMAND NOTICE DATED 23.12.2019 ISSUED BY THE FIRST RESPONDENT Exhibit P3 EXHIBIT P3: A TRUE COPY OF THE E-FILED APPEAL FOR AY 2012-13 DATED 31.01.2020 FILED BEFORE THE 2ND RESPONDENT Exhibit P4 EXHIBIT P4: A TRUE COPY OF THE DEMAND FOR 20% OF TAX DATED 12.08.2021 ISSUED BY THE 1ST RESPONDENT Exhibit P5 EXHIBIT P5: A TRUE COPY OF THE REVIEW PETITION DATED 11.10.2021 BEFORE THE 3RD RESPONDENT Exhibit P6 EXHIBIT-P6: A TRUE COPY OF THE JUDGMENT IN WA NO.1530 OF 2019 OF THE DIVISION BENCH OF THIS HON'BLE COURT Exhibit P7 EXHIBIT P7: A TRUE COPY OF THE ORDER DATED 29.08.2022 ISSUED BY THE 3RD RESPONDENT Exhibit P8 EXHIBIT P8: A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2018-19 DATED 22.04.2021 ISSUED BY THE FIFTH RESPONDENT Exhibit P9 EXHIBIT P9: A TRUE COPY OF THE DEMAND NOTICE DATED 22.04.2021 ISSUED BY THE FIFTH RESPONDENT Exhibit P10 EXHIBIT P10: A TRUE COPY OF THE E-FILED APPEAL FOR AY 2018-19 DATED 12.05.2021 FILED BEFORE THE 4TH RESPONDENT Exhibit P11 EXHIBIT-P11: A TRUE COPY OF THE DEMAND FOR 20% OF TAX DATED 29.10.2021 ISSUED BY THE 1ST RESPONDENT Exhibit P12 EXHIBIT P12: A TRUE COPY OF THE REVIEW PETITION DATED 03.11.2021 BEFORE THE 3RD RESPONDENT Exhibit P13 EXHIBIT P13: A TRUE COPY OF THE ORDER DATED 26.08.2022 ISSUED BY THE 3RD RESPONDENT.

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