AZHIKODE SERVICE CO-OPERATIVE BANK LTD.NO.R 287 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)
What did the High Court hold?
The High Court of Kerala directed the Appellate Authority (the first respondent) to consider and dispose of the petitioner's appeal (Ext.P2) within six months from the date of receiving a copy of the judgment. The Court clarified that the appeal should be disposed of without insisting on the payment of 20% of the tax demanded. Furthermore, the Court ordered that all recovery proceedings pursuant to the assessment order shall be kept in abeyance until a decision is taken on the appeal. The Court's reasoning was based on the pendency of the appeal and the apprehension of coercive steps, aligning with previous directions issued in similar cases concerning Section 80P deductions. The ratio decidendi is that pending appeals should be disposed of expeditiously, and coercive recovery can be stayed pending such disposal, especially when a precedent for waiving deposit requirements exists.
What were the facts?
The petitioner, Azhikode Service Co-operative Bank Ltd., is a co-operative society that claimed a deduction under Section 80P(4) of the Income Tax Act. The Assessing Officer, through an order dated December 17, 2019, completed the assessment under Section 143(3) and disallowed the claim under Section 80P(2), resulting in a significant tax demand. The petitioner filed an appeal (Ext.P2) before the Commissioner of Income Tax (Appeals), the first respondent. While the appeal was pending, the petitioner filed a writ petition before the High Court of Kerala, apprehending coercive recovery steps based on the assessment order and seeking an early disposal of the appeal.
What were the issues?
1. Whether the petitioner is entitled to a direction for the early disposal of their appeal pending before the Commissioner of Income Tax (Appeals)? (Question of procedure) Assessee's Contention: The petitioner argued that the appeal (Ext.P2) is pending and that this Court has previously directed the Appellate Authority to dispose of appeals concerning Section 80P claims without insisting on a deposit, citing Ext.P3 judgment as precedent. They sought a direction for an early disposal to avoid coercive recovery steps. Revenue's Contention: The judgment does not record any specific contentions made by the revenue. However, the presence of the Standing Counsel for the respondents indicates their participation in the proceedings.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Petitioner is a co-operative society, which claimed the benefit under Section 80P(4) of the Income Tax Act. By the order dated 17.12.2019, the assessing officer completed the assessment under Section 143(3) of the Income Tax Act and disallowed the claim under Section 80P(2) of the Act. A demand for a huge amount has already been made against the petitioner.
Challenging the order of assessment, petitioner has preferred Ext.P2 appeal before the first respondent. It is submitted that the appeal is pending consideration. However, apprehending coercive steps that may be initiated, pursuant to Ext.P1 assessment order, petitioner seeks for a direction for an early disposal of Ext.P2 appeal.
I have heard the learned counsel for the petitioner Adv.O.D.Sivadas as well as the learned Standing Counsel for the respondents Sri.Jose Joseph.
The learned counsel for the petitioner pointed out that there are connected matters in which this Court has already issued directions to the Appellate Authority to dispose of appeals in cases where the deduction under Section 80P of the Act have been sought without insisting on any deposit. Ext.P3 is one such judgment where this Court directed the appeal to be disposed of without insisting on payment of any percentage of the amount already assessed.
Having regard to the circumstances arising in the case, I am of the view that Ext.P2 appeal filed by the petitioner before the first respondent can be directed to be disposed of in accordance with law.
Accordingly, there will be a direction to the Appellate Authority concerned to consider and dispose of Ext.P2 appeal, after affording an opportunity of hearing to the petitioner within an outer period of six months from the date of receipt of a copy of this judgment. It is clarified that the appeal shall be disposed of by the first respondent without insisting on payment of 20% of the tax demanded. Needless to say, till a decision is taken by the first respondent on the appeal, all recovery proceedings pursuant to assessment order shall be kept in abeyance. The writ petition is allowed as above. BECHU KURIAN THOMAS JUDGE vps
Appendix — schedule of exhibits
More judgments on Section 80P(4)
- Suvarnakarara Co-Operative Society Limited… vs Income Tax Officer, Ward - 2, KarwarITA 210/PAN/2025[2020-21]Status: Disposed7 Oct 2026AY 2020-21
- Suvarnakarara Co-Operative Society Limited… vs Income Tax Officer, Ward - 2, KarawarITA 209/PAN/2025[2018-19]Status: Disposed7 Oct 2026AY 2018-19
- Suvarnakarara Co-Operative Society Limited… vs Income Tax Officer, Ward - 2, KarwarITA 208/PAN/2025[2017-18]Status: Disposed7 Oct 2026AY 2017-18
- The Vijapur Taluka Co-Operative Purchase… vs Income Tax Officer, Ward-1, PatanITA 925/AHD/2026[2017-18]Status: Disposed5 Oct 2026AY 2017-18
- Shri Gajanan Nagari Sahakari Pat Sanstha… vs ITO WD-2(1), KolhapurITA 2768/PUN/2026[2018-19]Status: Disposed30 Sept 2026AY 2018-19
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