INCHAKUNDU SERVICE CO-OPERATIVE BANK LIMITED, NO.R197 vs. THE INCOME TAX OFFICER

WP(C)/12910/2021HC KeralaKLHC01034934202129 June 2021Author: HONOURABLE MR. JUSTICE A.M.BADAR4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court considered the fact that a statutory appeal and a stay petition were pending before the 3rd respondent. The Court directed the 3rd respondent to decide the pending stay application (Ext.P3) within two months from the date of communication of the order. Crucially, the Court ordered that until the disposal of the stay petition, the respondents shall defer any recovery proceedings initiated pursuant to the assessment order (Ext.P1). The principle established is that recovery actions should be postponed pending the decision on a stay application filed along with a statutory appeal, to ensure that the appellate process is not rendered nugatory.

What were the facts?

The petitioner, Inchakundu Service Co-operative Bank Limited, filed a writ petition before the High Court of Kerala. The petitioner had challenged an assessment order (Ext.P1) issued by the 2nd respondent (National Faceless Assessment Centre). A statutory appeal (Ext.P2) along with a stay petition (Ext.P3) were filed before the 3rd respondent (Commissioner of Income Tax (Appeals), National Faceless Appeal Centre). Despite the pendency of the appeal and stay petition, the revenue authorities were initiating recovery proceedings based on the assessment order. The petitioner sought intervention from the High Court to halt these recovery actions.

What were the issues?

1. Whether the recovery proceedings initiated by the respondents are justified when a statutory appeal and a stay petition are pending before the appellate authority? (Question of mixed law and fact, concerning the procedural fairness and the impact of pending statutory remedies). Contentions: Assessee: The assessee argued that recovery proceedings should not be initiated while a stay petition is pending before the appellate authority, as it prejudices their right to seek relief. They relied on the principle that statutory remedies should be allowed to take their course without pre-emptive recovery. Revenue: The revenue opposed the petition and sought to justify the action of initiating recovery proceedings. The specific legal provisions or precedents relied upon by the revenue were not recorded in the judgment.

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 A.M.BADAR TUESDAY, THE 29TH DAY OF JUNE 2021 / 8TH ASHADHA, 1943 WP(C) NO. 12910 OF 2021 PETITIONER/S: INCHAKUNDU SERVICE CO-OPERATIVE BANK LIMITED, NO.R197 MUPLIYAM, THRISSUR, PIN 680 312, REPRESENTED BY ITS SECRETARY, K A. JAICY BY ADVS. K.S.HARIHARAN NAIR RAJATH R NATH HARIMA HARIHARAN RESPONDENT/S: 1 INCOME TAX OFFICER, WARD 2(2), AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSUR PIN 680 001 2 THE ADDITIONAL/JOINT/DEPUTY/ASST.COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, DELHI – 110 001 3 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, DELHI 220 001 SRI.JOSE JOSEPH,SC,INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.06.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 12910 OF 2021 2

JUDGMENT

According to the learned counsel appearing for the petitioner, as against the assessment order at Ext.P1, issued by the 2nd respondent, the petitioner has preferred a statutory appeal at Ext.P2 with a stay petition(Ext.P3), which are pending for consideration before the 3rd respondent. It is the case of the petitioner that despite pendency of the stay petition alongwith the appeal, the respondents are resorting to initiate recovery of the amount determined by the assessment order at Ext.P1. 2. Learned Standing Counsel appearing for the respondents opposed the petition and sought to justify the action of the respondents.

Considering the fact that the statutory appeal alongwith stay petition challenging the assessment order is pending before the 3rd respondent, the writ petition is disposed of as follows:-

The 3rd respondent is directed to decide the pending stay application at Ext.P3 filed in the statutory appeal (Ext.P2) challenging the assessment order at Ext.P1, within a period of two months from the date of communication of this order. Till disposal of this stay petition,

WP(C) NO. 12910 OF 2021 3 the respondents shall defer the recovery proceedings, if any, initiated for recovery, in pursuant to the assessment order at Ext.P1. Parties to act on the authenticated copy of this judgment. A.M.BADAR JUDGE ajt

WP(C) NO. 12910 OF 2021 4

Appendix — schedule of exhibits

APPENDIX PETITIONER'S EXHIBITS EXHIBIT P1 – COPY OF ASSESSMENT ORDER DATED 11-04-2021 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2018-19 EXHIBIT P2 – COPY OF APPEAL MEMORANDUM DATED 29-04-2021 AGAINST EXHIBIT P1 EXHIBIT P3 – COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 29-04-2021 IN EXHIBIT P2 APPEAL

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