CHEERANCHIRA SERVICE CO-OPERATIVE BANK LTD vs. INCOME TAX OFFICER

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WP(C)/9598/2020HC KeralaKLHC01024629202030 April 2020Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court found merit in the petitioner's contention that proceeding with coercive steps pending the statutory appeal would render the appeal redundant and cause severe difficulties. Consequently, the Court disposed of the writ petition by directing the respondents not to proceed with coercive steps against the petitioner until the disposal of the appeal (Ext.P3). Additionally, the Court directed the second respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the appeal within a period of 6 months, without insisting on the payment of the demanded tax. The Court did not decide on the tenability of the Section 80P deduction disallowance, as that was a matter for the appellate authority.

What were the facts?

The petitioner, Cheeranchira Service Co-operative Bank Ltd., is an income tax assessee. For the assessment year 2017-2018, the Income Tax Officer (ITO), the first respondent, disallowed the petitioner's claim for deduction under Section 80P of the Income Tax Act, demanding an amount of Rs. 62,51,839/- as tax and interest. The petitioner challenged this assessment by filing an appeal (Ext.P3) with the Commissioner of Income Tax (Appeals), the second respondent, arguing that the reason for disallowing the deduction was not tenable. While the appeal was pending, the respondents initiated recovery proceedings. The petitioner filed a writ petition before the High Court of Kerala seeking to prevent these coercive steps.

What were the issues?

1. Whether the High Court should intervene in pending assessment and recovery proceedings by issuing a writ of mandamus to stay coercive steps. The petitioner argued that initiating recovery proceedings while a statutory appeal is pending would render the appeal redundant and cause severe difficulties. The petitioner contended that the disallowance of the Section 80P deduction was not tenable. The revenue, represented by the Standing Counsel, took notice of the petition. No specific arguments from the revenue regarding the stay of coercive steps or the merits of the Section 80P deduction were 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 BECHU KURIAN THOMAS THURSDAY, THE 30TH DAY OF APRIL, 2020/10TH VAISAKHA, 1942 W.P(C). NO. 9598 OF 2020 PETITIONER CHEERANCHIRA SERVICE CO-OPERATIVE BANK LTD, NO. 1626, CHEERANCHIRA P.O, CHANGANACHERY, KOTTAYAM,-686106 REPRESENTED BY ITS SECRETARY JOHN KURIAN BY ADV. SRI..C. A. JOJO. RESPONDENTS: 1. INCOME TAX OFFICER, WARD-1 & T P S, T.K ROAD, THIRUVALLA THIRUVALLA - 689101 2. COMMISSIONER OF INCOME TAX (APPEALS), OFFICE OF THE COMMISSIONER OF INCOME TAX, PUBLIC LIBRARY BUILDING BAKER HILL P.O, KOTTAYAM-686 002 R1-2 BY SRI.JOSE JOSEPH THIS WRIT PETITION HAVING COME UP FOR ADMISSION ON 30.04.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C).NO.9598 OF 2020 ..2..

JUDGMENT I have heard the counsel for the petitioner through video conferencing. I have also heard the learned 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 2017-2018. 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.62,51,839/- as tax and interest.

3.

Challenging the said assessment, petitioner has preferred Ext.P3 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.9598 OF 2020 ..3.. pending consideration of the statutory appeal, the same will be rendered redundant and petitioner will be put to severe difficulties. In such circumstances, I dispose of the writ petition by directing the respondents not to proceed with coercive steps against the petitioner pending disposal of Ext.P3 appeal. I also direct the 2nd respondent to consider and dispose of Ext.P3 appeal within a period of 6 months without insisting on payment of the tax demanded. BECHU KURIAN THOMAS

JUDGE BNG

W.P(C).NO.9598 OF 2020 ..4..

Appendix — schedule of exhibits
APPENDIX EXHIBIT-P1: A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2017-18 DATED 31.12.2019 ISSUED BY THE FIRST RESPONDENT EXHIBIT P2: A TRUE COPY OF THE DEMAND NOTICE U/S 156 DATED 31.12.2019 ISSUED BY THE FIRST RESPONDENT EXHIBIT P3: A TRUE COPY OF THE APPEAL FOR AY 2017-18 BEFORE THE 2ND RESPONDENT DATED 17.02.2020 EXHIBIT P4: A TRUE COPY OF THE JUDGMENT IN A SIMILAR CASE IN WP (C) 3329/2019 DTD. 6.2.2020

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