THE KARUMALLOOR SERVICE CO-OPERATIVE BANK LTD. NO.737 vs. THE INCOME TAX OFFICER,

PDF · subscribers
WP(C)/9674/2020HC KeralaKLHC01024787202005 May 2020Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court of Kerala, while not deciding the merits of the disallowance under Section 80P, found merit in the petitioner's contention that coercive steps pending the statutory appeal would render the appeal redundant and cause severe difficulties. Therefore, the Court directed the respondents not to proceed with any coercive steps against the petitioner pending the disposal of the appeal (Ext.P2). Additionally, the Court directed the Commissioner of Income Tax (Appeals) (2nd respondent) to consider and dispose of the appeal within a period of 6 months, without insisting on the payment of 10% of the tax demanded. The primary principle established is that recovery proceedings should not prejudice the statutory appellate remedy.

What were the facts?

The petitioner, Karumalloor Service Co-operative Bank Ltd, is an income tax assessee. For the assessment year 2017-18, the Income Tax Officer (1st respondent) disallowed the petitioner's claim for deduction under Section 80P of the Income Tax Act, demanding a tax amount of Rs. 1,62,28,187/-. The petitioner filed an appeal (Ext.P2) against this assessment order (Ext.P1), arguing that the disallowance was not tenable. While the appeal was pending, the respondents initiated recovery proceedings for the disputed tax amount. The petitioner filed a writ petition before the High Court of Kerala seeking to prevent these coercive recovery steps.

What were the issues?

1. Whether the Income Tax Officer was justified in disallowing the petitioner's claim for deduction under Section 80P of the Income Tax Act for the assessment year 2017-18? (Question of law and fact, concerning Section 80P of the Income Tax Act). Assessee's Contention: The reason for disallowing the claim for deduction under Section 80P is not tenable. Revenue's Contention: The judgment does not record any specific contention from the revenue regarding the merits of the disallowance under Section 80P. However, the revenue initiated recovery proceedings, implying a stance that the tax demand is valid.

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 BECHU KURIAN THOMAS TUESDAY, THE 05TH DAY OF MAY, 2020/15TH VAISAKHA, 1942 W.P(C) NO.9674 OF 2020 PETITIONER THE KARUMALLOOR SERVICE CO-OPERATIVE BANK LTD NO. 737, KARUMALLOOR P.O, ERNAKULAM DISTRICT - PIN- 683 511 REPRESENTED BY ITS SECRETARY, SRI. T.T SREEKUMAR. BY ADVS. SRI. M.M.MONAYE AND SRI. M.PAUL VARGHESE RESPONDENTS:- 1. THE INCOME TAX OFFICER, WARD - 2, TPS, KAP COMMERCIAL COMPLEX O/O ADDITIONAL COMMISSIONER OF INCOME TAX ALUVA RANGE, R.S. ROAD, ALUVA - 683 101. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), 281243,"POORNIMA", NEAR MANORAMA JUNCTION, PANAMPILLY NAGAR, KOCHI- 682 036. BY SRI.JOSE JOSEPH, SC THIS WRIT PETITION HAVING COME UP FOR ADMISSION ON 05.05.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C) NO.9674 OF 2020 2

JUDGMENT

I have heard the counsel for the petitioner through video conferencing. I have also heard the standing counsel for income tax who has taken notice on behalf of respondents. In the facts and circumstances of the case, I deem it fit that this writ petition be disposed of.

2.

Petitioner is an income tax assessee and the issue relates to the assessment year 2017-18. By Ext.P1, the 1st respondent disallowed petitioner’s claim for deduction under Section 80P of the Income Tax Act and demanded an amount of Rs.1,62,28,187/- as tax.

3.

Challenging the said assessment, petitioner has preferred Ext.P2 appeal contending that the reason for disallowing petitioner’s claim for deduction under section 80P is not tenable. While the appeal is pending, the respondents have initiated recovery proceedings to recover the tax allegedly due.

4.

I find force in the contention of the counsel for the petitioner that if the respondents proceed with coercive steps

W.P(C) NO.9674 OF 2020 3 pending consideration of the statutory appeal, the same will be rendered redundant and petitioner will be put to severe difficulties.

5.

In such circumstances, I dispose of the writ petition by directing the respondents not to proceed with any coercive steps against the petitioner pending disposal of Ext.P2 appeal. I also direct the 2nd respondent to consider and dispose of Ext. P2 appeal within a period of 6 months without insisting on payment of 10% of the tax demanded. BECHU KURIAN THOMAS JUDGE vps

W.P(C) NO.9674 OF 2020 4

Appendix — schedule of exhibits
APPENDIX PETITIONERS EXTS: EXHIBIT: P1- TRUE COPY OF THE ASSESSMENT ORDER DATED 29.12.2019 ALONG WITH DEMAND NOTICE EXHIBIT: P2- TRUE COPY OF THE APPEAL DATED 17.01.2019 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT EXHIBIT: P3- TRUE COPY OF THE NOTICE DATED 17.3.2020 ISSUED BY THE 1ST RESPONDENT EXHIBIT: P4- TRUE COPY OF THE STAY PETITION DATED 18.3.2020 ALONG WITH THE ACKNOWLEDGEMENT

More judgments on Section 80P

All 5,069 judgments and leading authorities on Section 80P →

Latest GST High Court judgments

Search GST case law →