THE KODUR SERVICE CO-OPERATIVE BANK LTD, F 1523 vs. THE INCOME TAX OFFICER

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WP(C)/7985/2020HC KeralaKLHC01021072202013 March 2020Author: HONOURABLE MR.JUSTICE V.G.ARUN5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition with directions. The petitioner was directed to file stay petitions for their pending second appeals (Exhibits P8 to P10) within two weeks. The Income Tax Appellate Tribunal (respondent 3) was directed to consider and pass orders on these stay petitions within two months of their filing. Until orders were passed on the stay petitions, and provided the petitions were filed, recovery proceedings pursuant to the assessment orders (Exhibits P1-P3) were to be deferred. There was to be no insistence on payment of the demand raised in Exhibit P11. The Court did not decide on the merits of the appeals or the validity of the demand, but rather focused on the procedural aspect of stay petitions and recovery.

What were the facts?

The petitioner, Kodur Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. It filed appeals against assessment orders for assessment years 2008-09, 2009-10, and 2014-15. These appeals were dismissed by a common order. Subsequently, the petitioner filed second appeals against the assessment and appellate orders. While these second appeals were pending, the petitioner received a demand for the entire assessed amount. The petitioner contends that recovery action was initiated prematurely, before the expiry of the appeal period. The revenue points out that the petitioner had not filed stay petitions along with their appeals.

What were the issues?

1. Whether the initiation of recovery proceedings by the Income Tax Officer (respondent 1) is arbitrary and unreasonable, given that the petitioner had filed second appeals against the appellate order and the appeal period had not expired. Assessee's contention: The revenue's action is unreasonable as recovery proceedings were initiated before the expiry of the appeal period. The petitioner relies on a Division Bench decision of the Kerala High Court in Writ Appeal No. 1536/2019, referencing the Full Bench decision in Mavilayi Service Co-operative Bank Ltd. vs. The Commissioner of Income Tax, which held that insisting on payment of even 20% of the demand is bad in law for Primary Agricultural Credit Societies. Revenue's contention: The petitioners have not filed stay petitions along with their appeals.

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 V.G.ARUN FRIDAY, THE 13TH DAY OF MARCH 2020 / 23RD PHALGUNA, 1941 WP(C).No.7985 OF 2020(W) PETITIONER: THE KODUR SERVICE CO-OPERATIVE BANK LTD F 1523, KODUR P.O. MALAPPURAM DISTRICT, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.O.D.SIVADAS RESPONDENTS: 1 THE INCOME TAX OFFICER WARD (4) TIRUR, MALAPPURAM DISTRICT 676 001. 2 THE COMMISSIONER OF INCOME TAX(APPEALS), AYAKAR BHAVAN, KOZHIKODE 673 001. 3 THE INCOME TAX APPELLATE TRIBUNAL, KAKKANAD, KOCHI 682 037. R1-3 BY SC CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.7985 OF 2020 2 JUDGMENT Dated this the 13th day of March 2020 The petitioner, a Primary Agricultural Credit Society had preferred appeals against Exhibits P1 to P3-assessment orders for the years 2008-09, 2009-10 and 2014-15. The appeals were

dismissed by Exhibit P7-a common order.

2.

The petitioner has challenged the assessment as well as the appellate orders by preferring Exhibits P8 to P10-second appeals.

3.

In the meanwhile, the petitioner has been served with Exhibit P11-proceeding, demanding payment of the entire amount assessed.

4.

It is the contention of the learned counsel for the petitioner that, Exhibit P7- appellate order is dated 29-01-2020, which is served on the petitioner only on 20-02-2020, and the appeals have been preferred immediately thereafter.

WP(C).No.7985 OF 2020 3

5.

It is submitted that, it is unreasonable and arbitrary for the first respondent to have initiated recovery action before expiry of appeal period.

6.

It is further contended that, a Division Bench of this Court had in Writ Appeal No. 1536/2019, considered a demand for remittance of 20% of the tax assessed regard to Primary Agricultural Credit Societies with reference to the Full Bench decision in Mavilayi Service Co- Income Tax,[2019(2) KHC 2871], and the insistence for payment of even 20% of the demand to be bad.

7.

Heard the learned Standing Counsel for the Income Tax Department also, who points out that, the petitioners have not even preferred stay petitions along with the appeals.

8.

Learned counsel for the petitioner undertakes to prefer the stay petitions immediately .

WP(C).No.7985 OF 2020 4

9.

On consideration

of the rival submissions, I am inclined to dispose of the writ petition, directing the petitioner to prefer stay petitions with respect to Exhibits P8 to P10- appeals within a period of two weeks, and in the event of such stay petitions being filed , the 3rd respondent to consider and pass orders on the stay petitions within a period of two months thereafter.

10.

Till such time, as orders are passed on the stay petitions, provided that the petitions are filed, recovery proceedings pursuant to Exhibits P1-P3 shall be deferred and there shall not be any insistence to pay the demand as raised in Exhibit P11. V.G.ARUN JUDGE SSK/13/3

WP(C).No.7985 OF 2020 5

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 23.02.2016 ISSUED BY THE 1ST RESPONDENT FOR THE PERIOD 2008-09. EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 24.12.2016 ISSUED BY THE 1ST RESPONDENT FOR THE PERIOD 2009-10. EXHIBIT P3 TRUE COPY OF THE ASSESSMENT ORDER DATED 24.12.2016 ISSUED BY THE 1ST RESPONDENT FOR THE PERIOD 2014-15. EXHIBIT P4 COPY OF THE APPEAL DATED 14/07/2016 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD 2008-09. EXHIBIT P5 COPY OF THE APPEAL DATED 27/01/2017 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD 2009-10. EXHIBIT P6 COPY OF THE APPEAL DATED 27/01/2017 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE PERIOD 2014-15. EXHIBIT P7 TRUE COPY OF THE ORDER DATED 29.01.2020 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P8 COPY OF THE APPEAL DATED 03.02.2020 FILED BY THE PETITIONER BEFORE THE INCOME TAX APPELLATE TRIBUNAL PERIOD 2008-09. EXHIBIT P9 COPY OF THE APPEAL DATED 03.02.2020 FILED BY THE PETITIONER BEFORE THE INCOME TAX APPELLATE TRIBUNAL PERIOD 2009-10. EXHIBIT P10 COPY OF THE APPEAL DATED 03.02.2020 FILED BY THE PETITIONER BEFORE THE INCOME TAX APPELLATE TRIBUNAL PERIOD 2014-15. EXHIBIT P11 THE COPY OF THE PROCEEDINGS DATED 10.03.2020 ISSUED BY THE 1ST RESPONDENT. RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE

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