NEERIKKODE SERVICE CO-OPERATIVE BANK LIMITED NO.1682 vs. THE COMMISSIONER OF INCOME TAX(APPEALS)

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WP(C)/8628/2021HC KeralaKLHC01022740202131 March 2021Author: HONOURABLE MR. JUSTICE A.M.BADAR6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court of Kerala held that the demand for 20% of the assessed tax amount during the pendency of a statutory appeal, where the appeal concerns the denial of the benefit of Section 80P of the Income Tax Act, is not justified. The Court relied on its previous judgments in a series of cases, including 'The Angadipuram Service Co-operative Bank Ltd. v. The Commissioner of Income Tax (Appeals)', which had already decided this issue. The ratio decidendi is that the recovery and collection of taxes under an assessment order should be kept in abeyance until the statutory appeal is decided, particularly when the appeal pertains to a deduction claim like Section 80P. The Court allowed the writ petitions, directing the Commissioner of Income Tax (Appeals) to consider and dispose of the statutory appeals at the earliest, taking note of the Full Bench decisions on the matter. Until then, the recovery of taxes under the assessment order was directed to be kept in abeyance.

What were the facts?

These two writ petitions, WP(C) No. 8628 of 2021 and WP(C) No. 8643 of 2021, were filed by Neerikkode Service Co-operative Bank Limited and Thavanoor Service Co-operative Bank Limited, respectively. The petitioners are challenging the demand for 20% of the assessed tax amount during the pendency of their statutory appeals before the appellate authorities. The appeals concern the denial of the benefit of Section 80P of the Income Tax Act. The Income Tax Officer in one case and the National Faceless Appeal Centre and other income tax authorities in the other are the respondents. The petitions were heard together by the High Court of Kerala.

What were the issues?

1. Whether, during the pendency of a statutory appeal against the denial of the benefit of Section 80P of the Income Tax Act, the revenue authorities are justified in demanding 20% of the amount assessed under the assessment order? (Question of law) Assessee's Contention: The petitioners, represented by their respective advocates, implicitly argue that the demand for 20% of the assessed tax is unjustified during the pendency of their appeals, especially when the core issue relates to the eligibility for deduction under Section 80P. Revenue's Contention: The revenue, represented by Standing Counsel, does not appear to have recorded specific arguments in the judgment regarding the justification of the 20% demand during the pendency of the appeal. The judgment notes that both sides were heard.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C).No.8628 OF 2021
W.P.(C) NO.8643/2021

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943 WP(C).No.8628 OF 2021(C) PETITIONER: NEERIKKODE SERVICE CO-OPERATIVE BANK LIMITED NO.1682, NEERIKKODE, (VIA) ALANGAD, ALUVA, ERNAKULAM DISTRICT, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.O.D.SIVADAS RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX(APPEALS), AYAKAR BHAVAN, OFFICE OF COMMISSIONER, KOCHI-682 018. 2 THE INCOME TAX OFFICER, WARD(3), ALUVA, ERNAKULAM DISTRICT, PIN-683 101. BY SRI.CHRISTOPHER ABRAHAM, STANDING COUNSEL. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.03.2021, ALONG WITH W.P.(C) NO.8643/2021 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).Nos.8628 OF 2021 and 8643 of2021 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943 WP(C).No.8643 OF 2021(E) PETITIONER: THAVANOOR SERVICE CO-OPERATIVE BANK LIMITED NO.P. 516, THAVANOOR, PONNANNI, MALAPPURAM DISTRICT, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.O.D.SIVADAS RESPONDENTS: 1 THE NATIONAL FACELESS APPEAL CENTRE, NEW DELHI, 110 001, REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER. 2 THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI-100 001. 3 THE INCOME TAX OFFICER, WARD 4, TIRUR, MALAPPPURAM DISTRICT, PIN-676 001. R1-3 BY CHRISTOPHER ABRAHAM, STANDING COUNSEL. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.03.2021, ALONG WITH W.P.(C) NO.8628/2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).Nos.8628 OF 2021 and 8643 of2021 3

JUDGMENT (W.P.(C) No.8628 of 2021, W.P.(C) No.8643 of 2021) Dated this the 31st day of March 2021 Heard both sides.

2.

The question for consideration involved in these writ petitions is whether during pendency of this statutory appeal in the wake of denial of benefit of Section 80 (P) of the Income Tax Act, the respondents are justified in demanding 20% of the amount assessed under the assessment order. The said question has already been decided by this Court in series of judgments including judgments dated 01-07-2019 in The Angadipuram Service Co-operative Bank Ltd. v. The Commissioner of Income Tax (Appeals). In the light of the ratio of this judgment, the petition is allowed by directing the Commissioner of Income Tax (Appeals) to consider and dispose of the statutory appeal filed by the petitioner at the earliest taking note of the Full Bench decision covering the issue involved in this matter and till then the respondents are directed to keep in abeyance the recovery and collection of taxes under the assessment order. A.M.BADAR JUDGE SSK/31/03

//// PA TO JUDGE

Appendix — schedule of exhibits
APPENDIX OF WP(C) NO.8628/2021 PETITIONER'S EXHIBITS: EXHIBIT P1 COPY OF THE ASSESSMENT ORDER DATED 04.03.2016 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT PERIOD 2013-14. EXHIBIT P2 COPY OF THE ASSESSMENT ORDER DATED 19.12.2016 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT PERIOD 2014-15. EXHIBIT P3 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE PERIOD 2013-14 DATED 25.05.2016. EXHIBIT P4 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE PERIOD 2014-15 DATED 07.11.2018. EXHIBIT P5 COPY OF THE PROCEEDINGS DATED 22.03.2021 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P6 COPY OF THE JUDGMENT DATED 01.07.2019 IN WA NO.1536 OF 2019 RENDERED BY THIS HON'BLE COURT. EXHIBIT P7 COPY OF THE JUDGMENT DATED 17.03.2020 IN WP(C) NO.8193 OF 2020 RENDERED BY THIS HON'BLE COURT. EXHIBIT P8 TRUE COPY OF THE JUDGMENT DATED 08.05.2020 IN WA NO.642 OF 2020 RENDERED BY THIS HON'BLE COURT RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE WP(C).Nos.8628 OF 2021 and 8643 of2021 6 APPENDIX OF WP(C) NO.8643/2021 PETITIONER'S EXHIBITS: EXHIBIT P1 COPY OF THE ASSESSMENT ORDER DATED 17.2.2021 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT PERIOD 2018-19. EXHIBIT P2 COPY OF THE NOTICE DATED 17.2.2021 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P3 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE IST RESPONDENT FOR THE PERIOD 2018-19 DATED 14.3.2021. EXHIBIT P4 COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE IST RESPONDENT FOR THE PERIOD 2018-19. EXHIBIT P5 TRUE COPY OF THE JUDGMENT DATED 1.7.2019 IN WA NO.1536 OF 2019 RENDERED BY THIS HON'BLE COURT. EXHIBIT P6 TRUE COPY OF THE JUDGMENT DATED 17.3.2020 IN WPC NO.8193 OF 2020 RENDERED BY THIS HON'BLE COURT. EXHIBIT P7 TRUE COPY OF THE JUDGMENT DATED 8.5.2020 IN WA NO.642 OF 2020 RENDERED BY THIS HON'BLE COURT. RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE

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