MUTHUKULAM BLOCK AGRICULTURAL IMPROVEMENT CO-OPERATIVE SOCIETY, vs. COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/8661/2020HC KeralaKLHC01022347202014 July 2020Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala disposed of the writ petition by directing the Commissioner of Income Tax (Appeals) to consider and pass orders on the petitioner's appeal within six months from the date of receipt of the judgment. The Court made it clear that until such orders are passed and communicated to the petitioner, recovery steps for the amounts confirmed in the assessment order shall be kept in abeyance. The Court noted that similar matters involving co-operative societies and the deduction under Section 80P have seen stays of recovery granted pending appeal. The ratio is that recovery proceedings should be deferred when an appeal raising substantial issues, such as the applicability of Section 80P for co-operative societies, is pending before the first appellate authority, and the appellate authority is directed to expedite the disposal of the appeal.

What were the facts?

The petitioner, Muthukulam Block Agricultural Improvement Co-operative Society, filed a writ petition before the High Court of Kerala challenging recovery steps initiated against it. The petitioner had preferred an appeal (Ext.P2) and a stay petition (Ext.P3) before the Commissioner of Income Tax (Appeals) against an assessment order (Ext.P1). The petitioner contended that recovery actions were being taken before the appellate authority had an opportunity to consider its appeal. The assessment year(s) and the specific amount in dispute are not explicitly stated in the judgment. The procedural history involves the filing of an appeal and stay petition before the first respondent, followed by the writ petition challenging immediate recovery actions.

What were the issues?

1. Whether recovery steps can be initiated against the petitioner for amounts confirmed in the assessment order (Ext.P1) pending the disposal of the appeal (Ext.P2) before the Commissioner of Income Tax (Appeals)? (Question of law and fact, concerning recovery proceedings under the Income Tax Act). Assessee's contentions: Recovery steps are being taken prematurely, before the appellate authority has had a chance to decide the appeal. The main issue in the appeal relates to the permissibility of deduction under Section 80P of the Income Tax Act in relation to co-operative societies. Revenue's contentions: Not recorded in the judgment.

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
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR TUESDAY, THE 14TH DAY OF JULY 2020 / 23RD ASHADHA, 1942 WP(C).No.8661 OF 2020(G) PETITIONER: MUTHUKULAM BLOCK AGRICULTURAL IMPROVEMENT CO-OPERATIVE SOCIETY, MUTHUKULAM BLOCK, KAREELAKULANGARA, KAYAMKULAM, ALAPPUZHA-690 572. BY ADVS. SRI.V.G.ARUN (K/795/2004) SMT.V.JAYA RAGI SRI.R.HARIKRISHNAN (KAMBISSERIL) SRI.NEERAJ NARAYAN SHRI.SARATH SUKUMARAN RESPONDENTS: 1 COMMISSIONER OF INCOME TAX (APPEALS) BAKER HILLS KOTTAYAM-686 002. 2 INCOME TAX OFFICER WARD 4, T.K. ROAD, THIRUVALLA, ALAPPUZHA-689 101. BY ADV.SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.07.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.8661 of 2020 2

JUDGMENT Against Ext.P1 assessment order under the Income Tax Act, the petitioner has preferred Ext.P2 appeal and Ext.P3 stay petition before the 1st respondent. It is a case of the petitioner that even before the 1st respondent has had an occasion to consider the appeal preferred by the petitioner, recovery steps are afoot to recover the amounts confirmed against the petitioner by Ext.P1 assessment order.

2.

I have heard the learned counsel appearing for the petitioner and also the learned Standing counsel appearing for the Income Tax Department. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, and finding the main issue agitated in the appeal is the permissibility of the deduction under Section 80P of the Income Tax Act in its relation to Co-operative societies, and finding that in similar matters this Court has granted a stay of recovery pending disposal of the appeal by the by the First Appellate Authority, the Writ Petition is disposed by directing the 1st respondent 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. It is made clear that till such time as orders are passed by the 1st respondent as directed, and the order communicated to the petitioner, recovery steps for recovery of amounts confirmed against the petitioner by Ext.P1 assessment order shall be kept in abeyance. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 1st respondent, for further action. A.K.JAYASANKARAN NAMBIAR

JUDGE mns/14.7.2020

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE PHOTOCOPY OF THE ASSESSMENT ORDER DATED 29.12.2019 ALONG WITH THE DEMAND NOTICE ISSUED UNDER SECTION 156 OF THE INCOME TAX ACT DATED 19.12.2019 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT. EXHIBIT P2 A TRUE PHOTOCOPY OF THE APPEAL DATED 23.1.2020 FILED FOR THE YEAR 2017-18 BEFORE THE IST RESPONDENT. EXHIBIT P3 A TRUE PHOTOCOPY OF THE APPLICATION FOR STAY DATED 10.2.2020 FILED BY THE PETITIONER BEFORE THE IST RESPONDENT.

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