THE MANKARA SERVICE CO-OPERATIVE BANK LTD. NO. P.363 vs. THE ADDITIONAL /JOINT/ DEPUTY / ASST. COMMISSIONER OF INCOME TAX / INCOME -TAX OFFICER

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WP(C)/8947/2021HC KeralaKLHC01023939202108 April 2021Author: HONOURABLE MR. JUSTICE A.M.BADAR4 pages
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What did the High Court hold?

The High Court disposed of the writ petition by directing the 2nd respondent (National Faceless Appeal Centre, Delhi) to consider and decide the stay petition (Ext.P3(a)) filed by the petitioner within two months from the date of communication of the judgment, following due process. The petitioner was directed to cooperate in the expeditious disposal of the stay petition. Crucially, the Court ordered that proceedings for recovery initiated pursuant to the assessment order (Ext.P1) shall be kept in abeyance until the disposal of the stay petition (Ext.P3(a)). The revenue's Standing Counsel was instructed to inform the respondents about the judgment for compliance. No specific finding was made on the merits of the Section 80P claim or the assessment order itself, as the focus was on the procedural aspect of stay and recovery.

What were the facts?

The petitioner, The Mankara Service Co-Operative Bank Ltd., an assessee under the Income Tax Act, claimed benefits under Section 80P for assessment year 2018-19. The 1st respondent, the Income Tax Officer, denied these benefits and passed an assessment order (Ext.P1). The petitioner filed an appeal (Ext.P3) along with a stay petition (Ext.P3(a)) before the 2nd respondent, the National Faceless Appeal Centre, Delhi. Despite the pendency of the appeal and stay petition, the 1st respondent was insisting on recovery of the tax arrears as per the assessment order. The petitioner sought a stay on recovery proceedings until the appeal was decided.

What were the issues?

1. Whether recovery proceedings pursuant to the assessment order (Ext.P1) should be stayed until the disposal of the appeal (Ext.P3) and stay petition (Ext.P3(a)?) (Question of mixed law and fact, concerning the powers of the appellate authority and the principles of recovery). Assessee's Contention: The petitioner argued that recovery should be stayed until the appeal and stay petition are disposed of by the 2nd respondent. They also requested a direction for the 2nd respondent to dispose of the appeal and stay petition expeditiously. Revenue's Contention: The revenue, through its Standing Counsel, submitted that instead of staying recovery until the appeal's disposal, the 2nd respondent could be directed to dispose of the stay petition (Ext.P3(a)) in a time-bound manner.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR THUR AY, THE 08TH DAY OF APRIL 2021 / 18TH CHAITHRA, 1943 WP(C).No.8947 OF 2021(P) PETITIONER/S: THE MANKARA SERVICE CO-OPERATIVE BANK LTD. NO. P.363 MANKARA P.O. PALAKKAD 678 613, REPRESENTED BY ITS SECRETARY, BABU.P., BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE ADDITIONAL /JOINT/ DEPUTY / ASST. COMMISSIONER OF INCOME TAX / INCOME -TAX OFFICER NATIONAL E-ASSESSMENT CENTRE, DELHI 110 001. 2 NATIONAL FACELESS APPEAL CENTRE,DELHI 110 001, REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER. SRI. JOSE JOSEPH, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.04.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.8947 OF 2021 2 JUDGMENT Dated this the 8th day of April 2021

Heard both sides.

2.

Learned counsel appearing for the petitioner submits that the petitioner is an assessee under the Income Tax Act. The petitioner had claimed benefit under Section 80P of the Income Tax Act for the assessment year 2018-19. However, the 1st respondent has denied those benefits and the assessment order at Ext.P1 for the year 2018-19 came to be passed. The petitioner therefore challenged the said assessment order by filing an appeal at Ext.P3 accompanied by the stay petition at Ext.P3(a), which are pending before the 2nd respondent.

3.

Learned counsel appearing for the petitioner further submits that despite pendency of the appeal (Ext.P3) and state petition [Ext.P3(a)] before the 2nd respondent, the 1st respondent is insisting for recovery of the amount in arrears as per the assessment order at Ext.P1. Learned counsel appearing for the petitioner

therefore submits that recovery in pursuant to the assessment order at Ext.P1 be stayed till disposal of the appeal and the 2nd respondent be directed to dispose of the appeal with the stay petition.

4.

Learned Standing Counsel appearing for the respondents

WP(C).No.8947 OF 2021 3 submits that the 2nd respondent can be directed to dispose of the stay petition at Ext.P3(a) in a time bound manner instead of staying recovery in pursuant to the assessment order at Ext.P1 till disposal of the appeal.

5.

In view of the submissions advanced by both parties and in the light of facts of the instant case, the writ petition is disposed of with the following prayers:-

The 2nd respondent is directed to consider and decide the stay petition at Ext.P3(a) filed in the statutory appeal (Ext.P3) by the petitioner, after following the due process of law within a period of two months from the date of communication of this judgment. The petitioner to cooperate with the 2nd respondent in disposal of the stay petition expeditiously. Till disposal of the stay petition at Ext.P3(a), proceedings for recovery initiated in pursuant to the Ext.P1 assessment order shall be kept in abeyance. The learned Standing Counsel appearing for the respondents shall inform the respondents about this judgment for necessary compliance. A.M.BADAR ajt JUDGE

WP(C).No.8947 OF 2021 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2018-19 DTD. 22.03.2021. EXHIBIT P2 COPY OF THE S.O.NO. 3296/(E) ISSUED BY THE MINISTRY OF FINANCE NEW DELHI DTD. 25.09.2020. EXHIBIT P2 (a) COPY OF THE S.O. NO. 3297(E) ISSUED BY THE MINISTRY OF FINANCE, NEW DELHI 25.09.2020. EXHIBIT P3 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 29.03.2021. EXHIBIT P3 (a) COPY OF STAY PETITION FIELD BY THE PETITIONER BEFORE THE ADDITIONAL/JOINT/ASSISTANT COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, DELHI DTD. 29.3.2021.

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