THE THALORE SERVICE CO-OPERATIVE BANK LTD vs. THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER
What did the High Court hold?
The High Court held that the Office Memorandum of 2016, as revised in 2017, cannot control the discretionary powers of the appellate authority. The Court noted that the appeal filed by the petitioner was pending consideration. Therefore, the demand for deposit (Ext.P4) may not have relevance for the time being. Following consistent practice in similar cases where claims for deduction under Section 80P were disallowed, the Court directed the 2nd respondent (National Faceless Appeal Centre) to consider and pass appropriate orders on the petitioner's appeal (Ext.P2) expeditiously. Pending this consideration, all coercive proceedings pursuant to the assessment order (Ext.P1) were directed to be kept in abeyance. The principle is that pending appeal, coercive steps should be stayed, and the appellate authority should be allowed to decide the appeal on merits, especially when the Supreme Court's decision in Mavilayi Service Co-operative Bank is relevant.
What were the facts?
The petitioner, The Thalore Service Co-operative Bank Ltd., is an assessee under the Income Tax Act. For the assessment year 2018-2019, the assessing officer (3rd respondent) completed the assessment by disallowing the claim of benefits under Section 80P of the Act. The petitioner challenged this assessment order by filing an appeal (Ext.P2) before the 2nd respondent (National Faceless Appeal Centre). The appeal was pending. The petitioner also received a demand (Ext.P4) from the assessing officer requiring a deposit of 20% of the sum adjudged in the assessment order for a stay of recovery proceedings. The petitioner apprehended coercive steps.
What were the issues?
1. Whether the demand for deposit of 20% of the sum adjudged for stay of recovery proceedings, as per Office Memorandum of 2016/2017, can control the discretionary powers of the appellate authority? (Question of law) Assessee's Contention: The petitioner argued that they are apprehending coercive steps and have filed an appeal against the assessment order. They also pointed to the demand for a 20% deposit for a stay. Revenue's Contention: No specific arguments were recorded for the revenue in this writ petition.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Petitioner is an assessee under the Income Tax Act. For the assessment year 2018-2019 the assessment was completed by the 3rd respondent disallowing the claim of benefits under Section 80P of the Act. Challenging the order of assessment, petitioner has preferred an appeal as Ext.P2 before the 2nd respondent. It is submitted that the said appeal is pending consideration and that in the meantime petitioner is apprehending coercive steps being taken.
Having regard to the fact that in similar cases were the claim for deduction under Section 80P of the Act has been claimed, this Court has been consistently directing
the appeal itself to be disposed of, taking into reckoning the decision rendered by the Supreme Court in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others [2021 (1) KLT 485].
It is pointed out by the learned counsel for the petitioner that by Ext.P4, the assessing officer has demanded the petitioner to deposit 20% of the sum adjudged in Ext.P1 for the purpose of staying further proceedings for recovery.
It is a settled principle that the Office Memorandum of 2016 as revised in 2017 cannot control the discretionary powers of the appellate authority. Since the appeal is pending consideration, Ext.P4 may not have any relevance for the time being, in view of the nature of orders I propose to issue in this case.
In similar cases, this Court has directed the appeal to be disposed of in a time bound manner.
Petitioner also stands in the same footing and there is no reason why a departure should be made from the other cases. Accordingly, there will be a direction to the 2nd respondent to consider and pass appropriate orders on Ext.P2 appeal filed by the petitioner, as expeditiously as possible. Pending such consideration, all coercive proceedings pursuant to Ext.P1 assessment order shall be kept in abeyance. The writ petition is disposed of as above. BECHU KURIAN THOMAS, JUDGE AMV/06/10//2021
Appendix — schedule of exhibits
More judgments on Section 80P
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- Shri Na vs Ari Khedut Sahkari Society Ltd…ITA 362/SRT/2025[2016-17]Status: Disposed9 Oct 2026AY 2016-17
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