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

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WP(C)/34700/2019HC KeralaKLHC01090582201918 December 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, taking note of similar matters where it had directed the Appellate Authority to consider and pass orders on appeals and stayed recovery of disputed amounts pending disposal, deemed it appropriate to condone the 20-day delay in filing the appeal before the ITAT. The Court directed the 3rd respondent (ITAT) to consider and pass orders on Ext.P4 appeal within six months from the date of receipt of a copy of the judgment. Recovery steps for the amounts confirmed by the rectification order were ordered to be kept in abeyance until the ITAT passed its orders and communicated them to the petitioner. The principle is that in cases of pending appeals and stay petitions before appellate authorities, and where the delay is minimal, courts may intervene to ensure a fair process by directing expeditious disposal and staying recovery.

What were the facts?

The petitioner, Aryanad Service Co-operative Bank Ltd., filed a writ petition before the High Court of Kerala challenging a rectification order (Ext.P3) passed by the Income Tax Officer. The petitioner had appealed this order (Ext.P4) to the Income Tax Appellate Tribunal (ITAT), along with a delay condonation petition (Ext.P5) and a stay petition (Ext.P6). The petitioner contended that recovery steps were being initiated by the revenue even before the stay petition was considered. The issue in the appeal before the ITAT concerned the disallowance of deduction claimed under Section 80P of the Income Tax Act. The delay in filing the appeal before the ITAT was stated to be 20 days.

What were the issues?

1. Whether the High Court should direct the Income Tax Appellate Tribunal to consider and pass orders on the appeal filed by the petitioner, and stay recovery proceedings pending disposal of the appeal. Assessee's Contentions: The petitioner argued that recovery steps were being taken by the respondents despite the pendency of their appeal before the ITAT and a pending stay petition. They relied on the fact that the issue involved the disallowance of deduction under Section 80P of the Income Tax Act. Revenue's Contentions: No specific contentions were recorded for the revenue in the judgment. The judgment notes that the learned Standing Counsel appearing for the respondents was heard.

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 A.K.JAYASANKARAN NAMBIAR WEDNESDAY, THE 18TH DAY OF DECEMBER 2019/27TH AGRAHAYANA, 1941 W.P(C).No.34700 OF 2019(J) PETITIONER: THE ARYANAD SERVICE CO-OPERATIVE BANK LTD. AGED 48 YEARS BANK BUILDING, ARYANAD POST, ARYANAD, TRIVANDRUM 695 542. REPRESENTED BY ITS SECRETARY ARUNGHOSH.S. BY ADVS.SRI.S.ARUN RAJ SMT.C.T.SUJA RESPONDENTS: 1 INCOME TAX OFFICER WARD 2 (3), AAYAKAR BHAWAN, 1ST FLOOR, KAWDIAR P.O. TRIVANDRUM 605 003. 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKR BHAVAN, KOWDIAR, TRIVANDRUM 695 003. 3 INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, KENDRIYA BHAVAN, KAKKANAD, ERNAKULAM 682 037. BY SRI.CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.34700/2019 :: 2 ::

J U D G M E N T Against Ext.P3 rectification order under the Income Tax Act, the petitioner has preferred Ext.P4 appeal together with Ext.P5 delay condonation petition as also Ext.P6 stay petition before the 3rd respondent. It is the case of the petitioner that even prior to considering the stay petition, recovery steps are taken by the respondents against the petitioner for recovery of the amounts confirmed by Ext.P3 rectification order. It is stated by the learned counsel for the petitioner that the issue involved in the appeal pertains to dis-allowance of deduction claimed under Section 80P of the Income Tax Act.

2.

I have heard the learned counsel appearing for the petitioner and also the learned Standing counsel appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar and taking note

W.P.(C).No.34700/2019 of the fact that in similar matters, this Court has directed the Appellate Authority to consider and pass orders in the appeal and stayed the recovery of disputed amounts pending disposal of the appeal. Taking note of the fact that delay occassioned in filing the appeal before the 3rd respondent is only 20 days, I deem it appropriate to condone the delay, and dispose this Writ petition with a direction to the 3rd respondent to consider and pass orders on Ext.P4 appeal within an outer time limit of six months from the date of receipt of a copy of this judgment. Recovery steps for recovery of amounts confirmed against the petitioner by Ext.P3 rectification order shall be kept in abeyance till such time as orders are passed by the 3rd respondent as directed above and communicated to the petitioner. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 3rd respondent, for further action. A.K.JAYASANKARAN NAMBIAR JUDGE prp/18/12/19

W.P.(C).No.34700/2019

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 27/12/2016 PASSED BY THE 1ST RESPONDENT UNDER SECTION 143 (3) OF THE CT FOR THE AY 2014-15. EXHIBIT P2 TRUE COPY OF THE ORDER DATED 5.3.2019 PASSED BY THE COMMISSIONER OF THE INCOME TAX (APPEALS), TRIVANDRUM UNDER SECTION 250 OF THE ACT ALLOWING THE APPEAL OF THE PETITIONER FOR THE AY 2014-15. EXHIBIT P3 TRUE COPY OF THE ORDER DATED 3.9.2019 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), TRIVANDRUM U/S. 154 R.W.S. 250 OF THE ACT FOR THE AY 2014-15. EXHIBIT P4 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH FOR THE AY 2014-15. EXHIBIT P5 TRUE COPY OF THE DELAY CON DONATION PETITION DELAY OF 20 DAYS FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. EXHIBIT P6 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT FOR THE AY 2014-15 EXHIBIT P7 RESPONDENTS EXHIBITS: TRUE COPY OF THE JUDGMENT DATED 4.12.2019 PASSED BY THIS HONOURABLE COURT IN WPC NO. 27295 OF 2019 IN THE CASE OF PACS PERTAINING TO DIS ALLOWANCE UNDER SECTION 80 P. NIL. //TRUE COPY// P.S. TO JUDGE W.P.(C).No.34700/2019 :: 5 ::

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