THE ARIYUR SERVICE CO-OPERATIVE BANK LTD., vs. THE INCOME TAX OFFICER,

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WP(C)/9153/2020HC KeralaKLHC01023417202023 March 2020Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN7 pages
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What did the High Court hold?

The High Court held that recovery proceedings should be stayed until the appeals filed by the petitioner are disposed of by the Income Tax Appellate Tribunal. The Court acknowledged that the issue of coverage under Section 80P of the Income Tax Act, 1961, is a matter to be adjudicated based on the Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut. The Court explicitly stated that the writ petitions are disposed of with the direction for a stay of recovery without making any observations on the merits of the matter. The operative direction is a stay of recovery till the appeals are disposed of.

What were the facts?

The petitioner, The Ariyur Service Co-operative Bank Ltd., has filed three writ petitions challenging recovery proceedings initiated by the Income Tax Officer (respondent 1) while appeals were pending before the Commissioner of Income Tax (Appeals) (respondent 2) and subsequently before the Income Tax Appellate Tribunal (respondent 3). The demands in question pertain to assessment years 2013-14, 2014-15, and 2015-16. The core of the dispute revolves around the petitioner's eligibility for deduction under Section 80P of the Income Tax Act, 1961. The petitioner has filed second appeals and stay petitions before the Tribunal, which are currently pending.

What were the issues?

1. Whether recovery proceedings can be initiated while appeals concerning the eligibility for deduction under Section 80P of the Income Tax Act, 1961, are pending before the Income Tax Appellate Tribunal? (Question of law and fact, concerning Section 80P of the Income Tax Act, 1961). Assessee's Contention: The assessee argued that recovery should be stayed as their appeals regarding the crucial issue of Section 80P deduction are pending before the Tribunal. They relied on the principle that recovery should not be pursued when the primary issue of tax liability is under adjudication. Revenue's Contention: The judgment does not explicitly record any specific arguments made by the revenue regarding the stay of recovery or the merits of the Section 80P issue. The revenue was represented by their Standing Counsel.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Heard together (3 matters)

WP(C).No.9153 OF 2020
WP(C).9155/2020
WP(C).9157/2020

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 23RD DAY OF MARCH 2020 / 3RD CHAITHRA, 1942 WP(C).No.9153 OF 2020 PETITIONER/S: THE ARIYUR SERVICE CO-OPERATIVE BANK LTD., KOTTOPADAM P.O., MANNARKKAD, PALAKKAD-678583, REPRESENTED BY ITS SECRETARY, N.P.KARTHIAYANI, AGED 49, W/O.CHANDRASEKHARAN, BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD 1, AYAKAR BHAVAN, PALAKKAD-678014. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), THRISSUR-680021. 3 THE INCOME TAX APPELLATE TRIBUNAL, AYAKAR BHAVAN, KAKKANADU, KOCHI-682030, REPRESENTED BY ITS REGISTRAR. OTHER PRESENT: R1 & R2 BY SRI.JOSE JOSEPH, SC, IT. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.03.2020, ALONG WITH WP(C).9155/2020, WP(C).9157/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.9153 of 2020 & - 2 - connected cases IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 23RD DAY OF MARCH 2020 / 3RD CHAITHRA, 1942 WP(C).No.9155 OF 2020 PETITIONER/S: THE ARIYUR SERVICE CO-OPERATIVE BANK LTD., KOTTOPADAM P.O., MANNARKKAD, PALAKKAD-678583, REPRESENTED BY ITS SECRETARY, N.P.KARTHIAYANI, AGED 49, W/O.CHANDRASEKHARAN. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD 4, AYAKAR BHAVAN, PALAKKAD-678014. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), THRISSUR-680021. 3 THE INCOME TAX APPELLATE TRIBUNAL, AYAKAR BHAVAN, KAKKANADU, KOCHI-682030, REPRESENTED BY ITS REGISTRAR. OTHER PRESENT: R1 & R2 BY SRI.JOSE JOSEPH, SC, IT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.03.2020, ALONG WITH WP(C).9153/2020, WP(C).9157/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.9153 of 2020 & - 3 - connected cases IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 23RD DAY OF MARCH 2020 / 3RD CHAITHRA, 1942 WP(C).No.9157 OF 2020 PETITIONER/S: THE ARIYUR SERVICE CO-OPERATIVE BANK LTD., KOTTOPADAM P.O., MANNARKKAD, PALAKKAD-678583, REPRESENTED BY ITS SECRETARY, N.P.KARTHIAYANI, AGED 49, W/O.CHANDRASEKHARAN. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD 4, AYAKAR BHAVAN, PALAKKAD-678014. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), THRISSUR-680021. 3 THE INCOME TAX APPELLATE TRIBUNAL, AYAKAR BHAVAN, KAKKANADU, KOCHI-682030, REPRESENTED BY ITS REGISTRAR. OTHER PRESENT: R1 & R2 BY SRI.JOSE JOSEPH, SC, IT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.03.2020, ALONG WITH WP(C).9153/2020, WP(C).9155/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.9153 of 2020 & - 4 - connected cases K. Vinod Chandran, J. ------------------------------------- W.P(C) No.9153, 9155 and 9157 of 2020 ------------------------------------- Dated this the 23rd day of March, 2020

JUDGMENT These writ petitions are against the recovery initiated while appeals are pending. The issue is also with respect to the coverage of the petitioner under Section 80P of the Income Tax Act, 1961, which has to be adjudicated on the basis of the Full Bench decision in Mavilayil Service Co - operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)].

2.

In the present case, the demand is with respect to assessment years 2013-14, 2014-15 and 2015-16. Exhibit P3 second appeal along with Exhibit P4 stay petition in the respective writ petitions are pending before the Tribunal. In the circumstance of the case, I am of the opinion that there shall be a stay of recovery till the appeals are disposed of. The writ petitions are disposed of with the above direction, without any observation on the merits of the matter. K.VINOD CHANDRAN JUDGE Vku/- - 5 - connected cases APPENDIX OF WP(C) 9153/2020 PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE IST RESPONDENT FOR THE YEAR 2013-14 DATED 23.3.2016. EXHIBIT P2 COPY OF APPELLATE ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2013-14 DATED 18.2.2020. EXHIBIT P3 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT 2013-14 DATED 13.3.2020. EXHIBIT P4 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 13.3.2020. connected cases APPENDIX OF WP(C) 9155/2020 PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2014-15 DATED 14.12.2016. EXHIBIT P2 COPY OF APPELLATE ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2014-15 DATED 18.02.2020. EXHIBIT P3 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT 2014-15 DATED 13.03.2020. EXHIBIT P4 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 13.03.2020. connected cases APPENDIX OF WP(C) 9157/2020 PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE IST RESPONDENT FOR THE YEAR 2015-16 DATED 22.12.2017. EXHIBIT P2 COPY OF APPELLATE ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2015-16 DATED 18.2.2020. EXHIBIT P3 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT 2015-16 DATED 13.3.2020. EXHIBIT P4 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 13.3.2020. []

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