THE MADAI CO-OPERATIVE RURAL BANK LTD. vs. INCOME TAX OFFICER

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WP(C)/8828/2020HC KeralaKLHC01022566202027 July 2020Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court quashed the order of the Commissioner of Income Tax (Appeals) imposing the 20% payment condition for stay. The Court directed the 2nd respondent to consider and pass orders on the appeals (Exts.P3 and P4) within six months from the date of receiving the judgment, after hearing the petitioner. Recovery steps for the amounts confirmed by the assessment orders (Exts.P1 and P2) were to be kept in abeyance until the appellate authority passed its orders and communicated them to the petitioner. The principle is that in certain circumstances, the appellate authority's discretion to impose conditions for stay should be exercised judiciously, and the High Court can intervene to ensure timely disposal and prevent undue hardship.

What were the facts?

The petitioner, The Madai Co-operative Rural Bank Ltd., filed appeals (Exts.P3 and P4) and stay petitions (Exts.P5 and P6) before the Commissioner of Income Tax (Appeals) (2nd respondent) against assessment orders (Exts.P1 and P2) passed by the Income Tax Officer (1st respondent). The 2nd respondent, by order Ext.P7, directed the petitioner to pay 20% of the disputed amount as a condition for stay of the balance amount pending appeal disposal. The petitioner approached the High Court of Kerala seeking relief against this condition.

What were the issues?

1. Whether the condition imposed by the Commissioner of Income Tax (Appeals) to pay 20% of the disputed amount for stay pending appeal is sustainable? The assessee (petitioner) argued that in similar matters, the High Court had directed the appellate authority to pass final orders in the appeal and refrain from coercive steps pending disposal. The revenue (respondents) did not record any specific arguments 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.K.JAYASANKARAN NAMBIAR MONDAY, THE 27TH DAY OF JULY 2020/5TH SRAVANA, 1942 W.P(C).No.8828 OF 2020(C) PETITIONER: THE MADAI CO-OPERATIVE RURAL BANK LTD. PAYANGADI .P.O, KANNUR-670303, REPRESENTED BY ITS SECRETARY P.VIMALA. BY ADVS.SRI.S.ARUN RAJ SMT.C.T.SUJA RESPONDENTS: 1 INCOME TAX OFFICER WARD-1 AND TPS,AAYAKAR BHAVAN, KANNUR-670006. 2 THE COMMISSIONER OF INCOME TAX(APPEALS), OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS), NORTH BLOCK,MANANCHIRA, KOZHIKODE-673001. BY SRI.CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.07.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.8828/2020 :: 2 ::

J U D G M E N T Against Exts.P1 and P2 assessment orders under the Income Tax Act, the petitioner has preferred Exts.P3 and P4 appeals together with Exts.P5 and P6 stay petitions before the 2nd respondent. It would appear that by Ext.P7 order passed by the 2nd respondent in the stay petition, the petitioner was directed to pay 20% of the disputed amount as a condition for stay of the balance amount pending disposal of the appeal.

2.

The learned counsel for the petitioner would point out that in similar matter this Court has directed the appellate authority to pass final orders in the appeal and to refrain from coercive steps for recovery of any amount in pending disposal of the appeal by the appellate authority. Taking note of the said submission and finding that in similar matters this Court has granted an interim stay of recovery proceedings, pending disposal of the appeal by the appellate authority, I quash Ext.P7 order and dispose the writ petition by W.P.(C).No.8828/2020 directing the 2nd respondent to consider and pass orders on Exts.P3 and P4 appeals within an outer time limit of six months from the date of receipt of a copy of this judgment, after hearing the petitioner. Recovery steps for recovery of amounts confirmed against the petitioner by Exts.P1 and P2 assessment orders shall be kept in abeyance till such time as orders are passed by the 2nd respondent as directed above and the order communicated to the petitioner. The petitioner shall produce a copy of this judgment together with a copy of the writ petition before the 2nd respondent for further action. A.K.JAYASANKARAN NAMBIAR JUDGE W.P.(C).No.8828/2020

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS: EXHIBIT 1 TRUE COPY OF THE ASSESSMENT ORDER DATED 17.12.2016 PASSED BY THE 1ST RESPONDENT AND THE DEMAND NOTICE FOR THE AY-2014-15 EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 21.12.2018 PASSED BY THE 1ST RESPONDENT AND THE DEMAND NOTICE FOR THE AY 2016-17 EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 21.12.2018 PASSED BY THE 1ST RESPONDENT AND THE DEMAND NOTICE FOR THE 2016-17 EXHIBIT P3 TRUE COPY OF THE STATUT0RY FIRST APPEAL FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2014-15 EXHIBIT P4 TRUE COPY OF THE STATUTORY FIRST APPEAL FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2016-17 EXHIBIT P5 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2014-15 EXHIBIT P6 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2016-17 EXHIBIT P7 TRUE COPY OF THE ORDER DATED 13-3-2020 PASSED BY THE 2ND RESPONDENT DISPOSING THE STAY PETITIONS. RESPONDENTS EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE

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