PALLICKAL FARMERS SERVICE CO OPERATIVE BANK LTD. NO. T. 230 vs. THE INCOME TAX OFFICER

PDF · subscribers
WP(C)/9557/2020HC KeralaKLHC01024442202028 April 2020Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court of Kerala held that proceeding with coercive steps pending the consideration of a statutory appeal would render the appeal redundant and cause severe difficulties to the assessee. Therefore, the Court directed the respondents not to proceed with any coercive steps against the petitioner pending the disposal of Ext. P3 appeal. Additionally, the Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the appeal within a period of 6 months. The Court also specified that the disposal should be without insisting upon the payment of 10% of the tax demanded, which is a common pre-condition for hearing appeals in certain cases. The ratio decidendi is that the statutory appellate remedy should not be rendered nugatory by immediate recovery actions.

What were the facts?

The petitioner, The Pallickal Farmers Service Co-operative Bank Ltd., is an income tax assessee. The dispute pertains to assessment year 2017-18. The Assessing Officer disallowed the petitioner's claim for deduction under Section 80P of the Income Tax Act, demanding a tax amount of Rs. 61,96,782/-. The petitioner filed an appeal (Ext. P3) against this assessment, arguing the disallowance was untenable. While the appeal was pending, the respondent initiated recovery proceedings. The petitioner filed a writ petition before the High Court of Kerala seeking to prevent coercive recovery steps during the pendency of the appeal.

What were the issues?

1. Whether the respondent can proceed with coercive recovery steps for the disputed tax amount while the petitioner's statutory appeal is pending before the Commissioner of Income Tax (Appeals)? (Question of procedure and statutory rights) Assessee's Contention: The petitioner argued that proceeding with coercive steps pending the statutory appeal would render the appeal redundant and cause severe difficulties. They relied on the principle that the appellate process should not be undermined by immediate recovery actions. Revenue's Contention: The judgment does not record specific arguments from the revenue regarding the initiation of recovery proceedings during the pendency of the appeal. However, the revenue was represented and took notice.

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 28TH DAY OF APRIL, 2020/8TH VAISAKHA, 1942 W.P.(C) NO.9557 OF 2020 PETITIONER:- THE PALLICKAL FARMERS SERVICE CO-OPERATIVE BANK LTD. NO.T230, REPRESENTED BY MANAGING DIRECTOR, PALLICKAL, KILIMANOOR P.O, THIRUVANANTHAPURAM DISTRICT-695004. BY ADV.SRI.T.R.HARIKUMAR SRI.ARJUN RAGHAVAN RESPONDENTS:- 1. THE INCOME TAX OFFICER, WARD-2 (5), OFFICE OF THE INCOME TAX OFFICER, AAYAKAR BHAVAN, KOWDIAR P.O, THIRUVANANTHAPURAM DISTRICT-695 003. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM-695 003. 3. THE KERALA STATE CO-OPERATIVE BANK (FORMERLY KNOWN AS THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK), THIRUVANANTHAPURAM DISTRICT OFFICE, EAST FORT, THIRUVANANTHAPURAM-PIN-695 001, REPRESENTED BY ITS GENERAL MANAGER-IN-CHARGE. SRI.JOSE JOSEPH, SC SRI.T.S.SYAMPRASANTH, GOVT. PLEADER THIS WRIT PETITION (CIVIL) TMP HAVING COME UP FOR ADMISSION ON 28.4.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 W.P.(C) No. 9557/2020

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 1 and 2. In the nature of the facts and circumstances of the case, this writ petition can be disposed of.

2.

Petitioner is an income tax assessee and the issue relates to the assessment year 2017-18. By Ext. P1, the respondent disallowed petitioner’s claim for deduction under Section 80P of the Income Tax Act and demanded an amount of Rs.61,96,782/- as tax.

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 respondent is taking steps to initiate 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 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 any 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 upon payment of 10% of the tax demanded. BECHU KURIAN THOMAS, JUDGE csl

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S' EXHIBITS: EXT.P1:- A TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2017- 2018 DATED 19-12-2019. EXT.P2:- A TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 156 OF THE INCOME TAX ACT DATED 19-12-2019. EXT.P3:- A TRUE COPY OF THE ONLINE APPEAL DATED 12-01-2020, FILED AGAINST EXT-P1 ASSESSMENT ORDER, BEFORE THE 2ND RESPONDENT. EXT.P4:- A TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER IN EXT-P3 APPEAL DATED 16-03-2020. EXT.P5:- A TRUE COPY OF THE JUDGMENT DATED 19-07-2019 IN W.A NO.1639 OF 2019. EXT.P6:- A TRUE COPY OF THE JUDGMENT DATED 17-02-2020 IN WP(C) NO.4433 OF 2020. RESPONDENT'S/S' EXHIBITS: NIL /TRUE COPY/ VPS PS TO JUDGE

More judgments on Section 80P

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

Recent GST High Court judgments

Search GST case law →