MALLAPPALLY SERVICE CO OPERATIVE BANK vs. THE CENTRAL BOARD OF DIRECT TAXES
What did the High Court hold?
The High Court directed the third respondent (Commissioner of Income Tax (Appeals)) to dispose of Ext.P2 appeal in accordance with law, as expeditiously as possible. Furthermore, the Court ordered a stay on all further coercive steps based on Ext.P1 Assessment Order until the disposal of Ext.P2 appeal. The reasoning was based on the precedent set by Ext.P4 judgment, which was issued in a similar situation involving a co-operative society and its statutory appeal against an assessment order. The Court acknowledged that the petitioner is a co-operative society and has filed an appeal against the assessment order, thus warranting the directions issued. The principle is that in cases where a statutory appeal is pending against an assessment order, and a similar issue has been considered by higher courts, it is appropriate to direct expeditious disposal of the appeal and stay coercive recovery proceedings pending the outcome.
What were the facts?
The petitioner, Mallappally Service Co-operative Bank Ltd., filed a writ petition before the High Court of Kerala seeking a direction to the respondents to dispose of its appeal (Ext.P2) and, until then, to stay all further proceedings based on the Assessment Order (Ext.P1). The petitioner is a co-operative society. The respondents include the Central Board of Direct Taxes, the Income Tax Officer, the Commissioner of Income Tax (Appeals), and the Additional Commissioner of Income Tax. The petitioner relied on a previous judgment of the High Court (Ext.P4) in a similar situation.
What were the issues?
1. Whether the High Court should direct the appellate authority to dispose of the appeal filed by the co-operative society expeditiously. (Question of procedure) 2. Whether further coercive steps based on the assessment order should be stayed until the disposal of the appeal. (Question of procedure) Assessee's Contentions: - The petitioner argued that in a similar situation, the High Court had directed the authorities to consider the appeal and granted a stay on recovery proceedings. They relied on Ext.P4 judgment, which in turn referred to a Division Bench judgment in W.A.No.1536/2019 and a Single Judge judgment in W.P.(C) No.5234/2020. The core issue in those cases, as indicated by the reference to Section 80(P), was the entitlement of co-operative societies to deduction under Section 80(P) of the Income Tax Act, which was denied by the Assessing Officer. Revenue's Contentions: - The judgment records that the Counsel for the respondents was heard, but their specific contentions are not detailed.
Which sections of the Income-tax Act were involved?
Section 80(P)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT The above writ petition is filed to issue appropriate direction to the respondents to dispose of Ext.P2 appeal and till then to stay all further proceedings based on Ext.P1 Assessment Order.
The Counsel for the petitioner submitted that in a similar situation, this Court, after hearing both sides, passed such an order as per Ext.P4 judgment.
Heard the Counsel for the petitioner and the respondents.
In a similar situation, this Court passed Ext.P4 judgment in which this Court directed the authorities to WP(C).No.10215 OF 2021(B) 3 consider the appeal itself and there was a stay of all further recovery proceedings pursuant to the Assessment Order. Relevant portion of Exhibit P4 judgment is extracted hereunder:- “5. The question which is pending for adjudication before the appellate authority is whether the petitioners who are co-operative Societies are entitled for deduction under Section 80 (P) of the Income Tax Act. The Assessing Officer has denied the benefit of Section 80 (P) of the Income Tax Act to the petitioner societies. In the matter of Mavilayi Service Co-operative Bank Ltd. the question regarding liability of the co-operative societis to pay the income tax assess was decided. The Division Bench of this Court relying on the said judgment in W.A.No.1536/2019 dated 01.07.2019, has quashed the action on the part of respondents with the direction that the Commissioner of the Income Tax should
WP(C).No.10215 OF 2021(B) 4 consider and dispose of the statutory appeals filed by the the appellant co-operative societies at the earliest taking note of Full Bench decision in the matter of Mavilayi Service Co-operative Bank Ltd. and till then the recovery and collection of taxes should be kept in abeyance. Similar is the judgment of the learned Single Judge in W.P.(C) No.5234/2020, the Electricity Board Employees Co-operative Society Ltd. v. Income Tax Officer decided on 26.02.2010”.
The petitioner is a co-operative society and Ext.P1 is the Assessment Order passed against the petitioner. Ext.P2 is the appeal filed by the petitioner. Therefore, there can be a direction to the appellate authority to dispose of Ex.P2, and till then all coercive steps can be stayed. Therefore, this Writ Petition is disposed of in the following manner:-
The third respondent is directed to dispose
WP(C).No.10215 OF 2021(B) 5 of Ext.P2 appeal, in accordance with law, as expeditiously as possible.
Till the disposal of Ext.P2 appeal, all further coercive steps based on Ext.P1 Assessment order is stayed. P.V.KUNHIKRISHNAN JM JUDGE
WP(C).No.10215 OF 2021(B) 6
Appendix — schedule of exhibits
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