PANAMARAM SERVICE COOPERATIVE BANK LTD. vs. INCOME TAX OFFICER

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WP(C)/29173/2022HC KeralaKLHC01061807202206 September 2022Author: HONOURABLE MR.JUSTICE N.NAGARESH6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that in the given facts and circumstances, the enforcement of the impugned orders (Exts.P1 and P2) pending the appeals filed by the petitioner would be unjustifiable. The Court acknowledged the petitioner's apprehension of hardship and their belief in a fair chance of success. Consequently, the writ petition was disposed of with a direction to the 5th respondent (National Faceless Appeal Centre) to consider and pass appropriate orders on the petitioner's appeals (Exts.P3 and P4) within three months. Until orders are passed on the appeals, any coercive proceedings pursuant to Exts.P1 and P2 are to be deferred. The Court did not decide the merits of the appeals themselves, focusing solely on the procedural aspect of deferring coercive action.

What were the facts?

The petitioner, Panamaram Service Cooperative Bank Ltd., is challenging a demand notice (Ext.P1) issued under Section 156 of the Income Tax Act, 1961, and an order (Ext.P2) under Section 271E read with Section 269T of the Act. Ext.P1 pertains to a penalty of ₹43,84,36,490 imposed under Section 271D, and Ext.P2 requires payment of ₹45,64,02,929 along with penalty under Section 271E. The petitioner has filed appeals (Exts.P3 and P4) against these orders before the Commissioner of Income Tax (Appeals). The petitioner apprehends coercive proceedings pending the appeals, which they contend would cause undue hardship. The appeals have been forwarded to the National Faceless Appeal Centre.

What were the issues?

1. Whether the enforcement of impugned orders (Exts.P1 and P2) pending appeals before the Commissioner of Income Tax (Appeals) would be unjustifiable, considering the petitioner's apprehension of undue hardship and their claim of a fair chance of success in the appeals? (Question of law and fact, turning on principles of natural justice and procedural fairness). Assessee's Contention: The petitioner argues that coercive proceedings pending their appeals would cause untold hardship and loss. They believe they have a fair chance of getting the impugned orders reversed and that enforcement pending appeals is unjustifiable. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the enforcement of the impugned orders pending appeal.

Which sections of the Income-tax Act were involved?

Section 156,Section 271E,Section 269T,Section 271D

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE N.NAGARESH TUE AY, THE 6TH DAY OF SEPTEMBER 2022 / 15TH BHADRA, 1944 WP(C) NO. 29173 OF 2022 PETITIONER: PANAMARAM SERVICE COOPERATIVE BANK LTD. PANAMARAM P.O., WAYANAD DISTRICT-670121 REPRESENTED BY ITS SECRETARY, PIN – 670121 BY ADV G.KEERTHIVAS RESPONDENTS 1 INCOME TAX OFFICER AYAKAR BHAVAN, KALPETTA-673122., PIN – 673122 2 JOINT COMMISSIONER OF INCOME TAX (APPEALS) OFFICE OF THE INCOME TAX DEPARTMENT, RANGE-II, KOZHIKODE-673001. 3 THE COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, KOZHIKODE DISTRICT-673001. 4 PRINCIPAL COMMISSIONER OF INCOME TAX AYAKAR BHAVAN, KOZHIKODE – 673001. ]

NATIONAL FACELESS APPEAL CENTRE C BLOCK, SPM CIVIC CENTRE, NEW DELHI - 110001, REPRESENTED BY PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (NFAC), PIN – 110001 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.09.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

] J U D G M E N T Dated this the 6th day of September, 2022

Aggrieved by Ext.P1 demand notice issued under Section 156 of the Income Tax Act, 1961 and Ext.P2 order issued under Section 271E read with Section 269T of the Income Tax Act, 1961, the petitioner is before this Court.

2.

The petitioner states that by Ext.P1 order, a penalty of 43,84,36,490/- has been imposed on the petitioner under ₹ Section 271D and by Ext.P2 order of the Joint Commissioner of Income Tax, the petitioner is required to pay 45,64,02,929/- ₹ along with penalty leviable under Section 271E of the Income Tax Act. The petitioner states that aggrieved by Exts.P1 and P2, the petitioner has filed Exts.P3 and P4 appeals before the Commissioner of Income Tax (Appeals) and that pending the appeals, if coercive proceedings are taken against the petitioner, the petitioner will be put to untold hardship and loss.

]

3.

I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the respondents.

4.

Ext.P1 is a levy made by the respondents under Section 271D of the Income Tax Act, 1961. Ext.P2 is an order issued under Section 271E read with Section 269T of the Income Tax Act, 1961. Aggrieved by those orders, the petitioner has filed Exts.P3 and P4 appeals before the 3rd respondent. The petitioner states that the petitioner has a very fair chance in getting the impugned orders reversed in the appeals.

5.

In such circumstances, enforcement of the impugned orders pending the appeals filed by petitioner would be unjustifiable. The petitioner would state that the 3rd respondent has already forwarded the appeal to the National Faceless Appeal Centre. In the facts and circumstance of the case, the writ petition is disposed of directing the 5th respondent to consider and pass appropriate orders on Exts.P3 and P4 appeals preferred by the petitioner, in accordance with law, within a period of three ] months. Till the respondents pass orders on the appeals preferred by the petitioner, any coercive proceedings pursuant to Exts.P1 and P2 shall stand deferred. N. NAGARESH, JUDGE smm/ 06.09.2022 ]

Appendix — schedule of exhibits
APPENDIX OF WP(C) 29173/2022 PETITIONER EXHIBITS Exhibit1 TRUE COPY OF THE ORDER DATED 26.7.2018 ISSUED BY THE 1ST RESPONDENT UNDER SECTION 271D READ WITH SECTION 269SS OF THE INCOME TAX ACT AGAINST THE PETITIONER. Exhibit P2 TRUE COPY OF THE ORDER DATED 26.7.2018 ISSUED BY THE 1ST RESPONDENT UNDER SECTION 271E READ WITH SECTION 269SS OF THE INCOME TAX ACT AGAINST THE PETITIONER. Exhibit P3 TRUE COPY OF THE APPEAL PREFERRED BY THE PETITIONER AGAINST EXHIBIT P1 DATED 30.8.2018 BEFORE THE 3RD RESPONDENT. Exhibit P4 TRUE COPY OF THE APPEAL PREFERRED AGAINST EXT P2 ORDER DATED 30.8.2018 BEFORE THE 3RD RESPONDENT. Exhibit P5 TRUE COPY OF THE ORDER DATED 28.07.2022 ISSUED BY THE 4TH RESPONDENT TO THE PETITIONER. Exhibit P6 TRUE COPY OF THE JUDGMENT DATED 03.01.2022 IN WP(C) 30703/2021 OF THIS HON'BLE COURT

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