THE PALODE SERVICE CO-OPERATIVE BANK LTD, NO 792CO vs. THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE

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WP(C)/22483/2022HC KeralaKLHC01046588202212 July 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.3 pages
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What did the High Court hold?

The High Court of Kerala disposed of the writ petition by directing that further recovery proceedings against the petitioner to enforce any demand arising out of Ext.P1 (the penalty order) shall be kept in abeyance until orders are passed on Ext.P4 (the stay application) filed in Ext.P2 (the appeal). The Court also mandated that the petitioner be given an opportunity of hearing before the stay petition (Ext.P4) is decided. The High Court did not decide the merits of the penalty order or the appeal itself, but rather provided interim relief concerning recovery.

What were the facts?

The petitioner, The Palode Service Co-operative Bank Ltd, received an order imposing penalty under Section 271(b) of the Income Tax Act, 1961, marked as Ext.P1. In response, the petitioner filed an appeal (Ext.P2) along with an application for stay (Ext.P4) before the appellate authority. The petitioner expressed apprehension of recovery proceedings being initiated to enforce the demand arising from Ext.P1 while the stay petition was pending. The writ petition was filed before the High Court of Kerala seeking relief in this regard.

What were the issues?

1. Whether the petitioner is entitled to a stay of recovery proceedings pending the decision on their stay application before the appellate authority, and if so, for what period? Assessee's Contention: The petitioner argued that they have filed an appeal and a stay application and apprehend recovery proceedings. They sought to prevent such proceedings until their stay application is decided. Revenue's Contention: The revenue, represented by the learned standing counsel, was heard. No specific arguments were recorded for the revenue regarding the stay or the merits of the penalty order.

Which sections of the Income-tax Act were involved?

Section 271(b)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. TUESDAY, THE 12TH DAY OF JULY 2022 / 21ST ASHADHA, 1944 WP(C) NO. 22483 OF 2022 PETITIONER: THE PALODE SERVICE CO-OPERATIVE BANK LTD, NO 792CO CO-OPERATIVE BUILIDNG, PALODE KARIMANCODE, THIRUVANANTHAPURAM, PIN - 695562 REPRESENTED BY ITS SECRETARY, REKHA V.O. BY ADVS. K.P.PRADEEP HAREESH M.R. SANAND RAMAKRISHNAN T.THASMI M.J.ANOOPA SANU S MALAKEEL RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE MINISTRY OF FINANCE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI,PIN – 110001, REPRESENTED BY ITS CHAIRMAN 2 ADDITIONAL COMMISSIONER OF INCOME TAX INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN - 110003 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN - 110003 OTHER PRESENT: SHRI. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.22483/2022 -2-

J U D G M E N T The petitioner suffered Ext.P1 order imposing penalty under Section 271 (b) of the Income Tax Act. The petitioner has preferred Ext.P2 appeal along with Ext.P4 application for stay. The petitioner apprehends proceedings for recovery of amounts due under Ext.P1 pending consideration of the stay petition.

2.

Having regard to the facts and circumstances of the case and having heard the learned standing counsel for the respondent/Department, this writ petition is disposed of directing till orders are passed on Ext.P4 application for stay filed in Ext.P2 appeal, further recovery proceedings against the petitioner to enforce any demand arising out of Ext.P1 shall be kept in abeyance. The petitioner shall also be given an opportunity of hearing before Ext.P4 stay petition is decided. GOPINATH P. JUDGE AMG

W.P (C) No.22483/2022 -3- APPENDIX OF WP(C) 22483/2022 PETITIONER EXHIBITS Exhibit P1OF THE PENALTY ORDER NO ITBA/PNL/F/271B/2021-22/1037497288(1) DATED 04-12-2021 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P2OF THE APPEAL DATED 18-06-2022 AGAINST THE PENALTY ORDER FILED FOR THE YEAR 2017-18 BEFORE THE 3RD RESPONDENT BY THE PETITIONER Exhibit P3OF THE DEMAND NOTICE NO ITBA/PNL/S/156/2021- 22/1037497278(1) DATED 04-12-2021 IN PENALTY ORDER ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P4OF THE STAY APPLICATION FILED ON 18-06-2022 AGAINST THE PENALTY ORDER BEFORE THE 3RD RESPONDENT IN EXT P2 APPEAL

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