THE KARARINAKAM SERVICE CO-OPERATIVE BANK LTD. vs. THE INCOME TAX OFFICER

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WP(C)/8766/2020HC KeralaKLHC01022648202030 September 2020Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court quashed the stay order (Ext.P4) issued by the 3rd respondent (Appellate Authority). The Court directed the 3rd respondent to consider and pass orders on the petitioner's appeal (Ext.P2) within six months from the date of receiving a copy of the judgment, after hearing the petitioner. The recovery of amounts confirmed by the assessment order (Ext.P1) was directed to be kept in abeyance until the Appellate Authority passes its order and communicates it to the petitioner. The petitioner is to provide copies of the writ petition and the judgment to the respondents. The core reasoning is based on the precedent of similar orders passed by the High Court in connected matters, emphasizing the need for the appellate authority to decide the appeal expeditiously without unduly burdening the assessee with pre-deposit conditions that might prejudice their case, especially when the appeal concerns a significant deduction like Section 80P.

What were the facts?

The petitioner, The Kararinakam Service Co-Operative Bank Ltd., filed an appeal (Ext.P2) along with a stay application before the 3rd respondent, the Commissioner of Income Tax (Appeals). The Appellate Authority, by Ext.P4 stay order, directed the petitioner to deposit 20% of the amount confirmed by the assessment order (Ext.P1) as a condition for staying the recovery of the balance amounts pending the appeal's disposal. The petitioner is challenging this stay order. The assessment year(s) are not explicitly stated. The procedural history involves the filing of an appeal and a stay application, followed by the impugned stay order, and now a writ petition challenging that order.

What were the issues?

1. Whether the condition imposed by the Appellate Authority in the stay order (Ext.P4) to deposit 20% of the confirmed demand is legally sustainable, considering the nature of the appeal concerning the permissibility of a deduction under Section 80P of the Income Tax Act, 1961, in its application to Co-operative societies? Assessee's Contention: The petitioner argues that the Appellate Authority mechanically imposed the 20% deposit condition. They rely on connected matters where this Court directed the Appellate Authority to consider and pass orders on the appeal while keeping recovery steps in abeyance pending the appeal's disposal. Revenue's Contention: The judgment does not record any specific arguments made by the revenue.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
W.P.(C).No.8766/2020 1 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR WEDNESDAY, THE 30TH DAY OF SEPTEMBER 2020 / 8TH ASWINA, 1942 WP(C).No.8766 OF 2020(U) PETITIONER/S: THE KARARINAKAM SERVICE CO-OPERATIVE BANK LTD., KADALAYI P.O, KANNUR-670 007, REPRESENTED BY ITS SECRETARY P P SUNANDA KUMARI. BY ADVS. SRI.S.ARUN RAJ SMT.C.T.SUJA RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD -1 AND TPS, KANNUR RANGE, KANNUR-670 006. 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, NORTH BLOCK, MANANCHIRA, KOZHIKODE-673 001. 3 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673 001. OTHER PRESENT: GOVERNMENT PLEADER SRI.THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.8766/2020 2

J U D G M E N T The petitioner has preferred Ext.P2 appeal along with stay application before the 3rd respondent Appellate Authority. It is stated that the Appellate Authority, by Ext.P4 stay order, mechanically directed the petitioner to deposit 20% of the amount confirmed by Ext.P1 assessment order as a condition for stay of the recovery of the balance amounts, pending disposal of the appeal.

2.

The learned counsel for the petitioner would point out that the issue involved in the appeal is the permissibility of a deduction under Section 80P of the Income Tax Act in its application to Co-operative societies, and in connected matters this Court has directed the Appellate Authority to consider and pass orders on the appeal while further directing that recovery steps for recovery of amounts confirmed against the petitioner by the assessment orders shall be kept in abeyance pending disposal of the appeal.

3.

I have heard the learned counsel for the petitioner and the learned Government Pleader for the respondents. Taking note of the similar orders passed by this Court, I dispose of the writ petition, by quashing Ext.P4 stay order and directing the 3rd respondent Appellate Authority to consider and pass orders on Ext.P2 appeal within an outer time limit of six months from the date of receipt of a copy of this judgment after hearing the petitioner. Recovery of the amounts confirmed against the petitioner by Ext.P1 assessment order shall be kept in abeyance till such time as orders are passed by the 3rd respondent as directed and the order communicated to the petitioner. The Petitioner shall produce a copy of the writ petition and a copy of this judgment before the respondents for further action. A.K.JAYASANKARAN NAMBIAR JUDGE DG

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 28.12.2016 PASSED BY THE 1ST RESPONDENT UNDER SECTION 143(3) OF THE ACT FOR THE AY 2014-15 EXHIBIT P2 TRUE COPY OF THE FIRST APPEAL FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT FOR THE AY 2014-15 EXHIBIT P3 TRUE COPY OF THE STAY APPLICATION DATED 08.04.2019 FILED BEFORE THE 1ST RESPONDENT FOR THE AY 2014-15. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 24.02.2020 PASSED BY THE 3RD RESPONDENT ON THE STAY APPLICATION.

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