M/S. KANHIKULAM SERVICE CO-OPERATIVE BANK LTD. vs. THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER

WP(C)/35637/2022HC KeralaKLHC01076356202209 November 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.3 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the writ petition could be disposed of with a direction. The court directed the 2nd respondent (National Faceless Appeal Centre) to consider and pass orders on the petitioner's stay petition (Ext.P3) in accordance with law within two months from the date of the order. Furthermore, the court ordered that any demand pursuant to the assessment order (Ext.P1) shall be kept in abeyance until such time as orders are passed on the stay petition. The principle established is that a taxpayer facing recovery while an appeal and stay petition are pending before the appellate authority can seek a direction from the High Court to hold recovery proceedings in abeyance until the stay petition is decided.

What were the facts?

The petitioner, M/s. Kanhikulam Service Co-operative Bank Ltd., is challenging an order of assessment (Ext.P1) passed under the Income Tax Act, 1961. The petitioner filed an appeal (Ext.P2) along with a stay petition (Ext.P3) before the 2nd respondent, the National Faceless Appeal Centre, Delhi. The petitioner apprehended recovery proceedings while the stay petition was pending consideration. Consequently, the petitioner filed this writ petition before the High Court of Kerala seeking relief.

What were the issues?

1. Whether the petitioner is entitled to a direction for the stay of recovery proceedings pending the disposal of their stay petition before the appellate authority? (Question of mixed law and fact, concerning the procedural rights of an assessee during an appeal). Assessee's Contention: The petitioner argued that recovery proceedings should be kept in abeyance until the appellate authority decides on their stay petition, to prevent irreparable harm. Revenue's Contention: The judgment does not record any specific arguments from the revenue. However, the court's decision implies that the revenue would be bound by the court's directions regarding the stay.

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. WEDNESDAY, THE 9TH DAY OF NOVEMBER 2022 / 18TH KARTHIKA, 1944 WP(C) NO. 35637 OF 2022 PETITIONER: M/S. KANHIKULAM SERVICE CO-OPERATIVE BANK LTD. NO. F1086, KANJIKULAM P.O., PALAKKAD , REPRESENTED BY ITS SECRETARY, AJITHKUMAR K. , PIN - 678596 BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENTS: 1 THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER NATIONAL E-ASSESSMENT CENTRE, DELHI, PIN - 110001 2 NATIONAL FACELESS APPEAL CENTRE DELHI, REPRESENTED BY THE COMMISSIONER OF INCOME TAX (APPEALS). , PIN - 110001 3 INCOME TAX OFFICER WARD 1 & TPS, AAYAKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD, PIN - 678014 OTHER PRESENT: ADV. JOSE JOSPEH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.35637/2022 -2-

J U D G M E N T The petitioner suffered Ext.P1 order of assessment under the provisions of Income Tax Act, 1961. The petitioner preferred Ext.P2 appeal along with Ext.P3 stay petition before the 2nd respondent. The petitioner apprehends recovery proceedings pending consideration of the stay petition by the 2nd respondent. Hence this writ petition.

Having heard the learned counsel for the petitioner as well as the respondents, I am of the opinion that this writ petition itself can be disposed of with a direction.

Accordingly, there will be a direction to the 2nd respondent to consider and pass orders on Ext.P3 stay petition in accordance with law within 2 months from today. Till such time as orders are passed on Ext.P3 any demand pursuant to Ext.P1 shall be kept in abeyance. The writ petition is disposed of as above. GOPINATH P. JUDGE AMG

W.P (C) No.35637/2022 -3- APPENDIX OF WP(C) 35637/2022 PETITIONER EXHIBITS Exhibit P1 COPYOF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2020-21 DTD. 17-09-2022 Exhibit P2 COPY OF APPEAL FILED BYTHE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 15-10-2022 Exhibit P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 29-09-2022 Exhibit P4 COPY OF JUDGMENT IN ITA NO. 323/2019 OF THIS HON'BLE COURT DTD. 01-11-2021

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