THE KOONAMMOOCHI PEOPLES SERVICE CO-OPERATIVE BANK LTD.NO. 603, vs. THE COMMISSIONER OF INCOME TAX (APPEALS),

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WP(C)/14719/2020HC KeralaKLHC01036372202022 July 2020Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court directed the 1st respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the petitioner's appeals (Exts.P3, P8, P13) within six months from the date of receiving the judgment. During this period, recovery steps for the amounts confirmed by the assessment orders were to be kept in abeyance until the appellate authority's order was passed and communicated. Consequently, the High Court set aside the orders of the 2nd respondent (Income Tax Officer) (Exts.P4, P9, P14) that mandated the payment of 20% of the disputed amounts pending the disposal of the appeals. The petitioner was directed to furnish a copy of the judgment to the 2nd respondent for further action. The court did not decide the merits of the Section 80P deduction claim itself, but rather addressed the procedural aspect of recovery pending appeal.

What were the facts?

The petitioner, The Koonammoochi Peoples Service Co-operative Bank Ltd., filed appeals against assessment orders (Exts.P1, P6, P11) before the 1st respondent, the Commissioner of Income Tax (Appeals). Along with these appeals, stay petitions (Exts.P5, P10, P15) were filed. Pending disposal of the stay petitions, the 2nd respondent, the Income Tax Officer, directed the petitioner to pay 20% of the disputed amounts as a condition for granting a stay on the recovery of the balance. The core issue in the appeals pertains to the permissibility of a deduction under Section 80P of the Income Tax Act concerning co-operative societies. The petitioner highlighted that the High Court had previously directed the appellate authority to consider similar appeals and restrained coercive recovery steps.

What were the issues?

1. Whether the 2nd respondent was justified in demanding 20% of the disputed amounts as a pre-condition for granting a stay on recovery pending appeal, when the appeals themselves concerned the permissibility of a deduction under Section 80P of the Income Tax Act? Assessee's Contention: The petitioner argued that the issue involved in their appeals was the permissibility of a deduction under Section 80P of the Income Tax Act. They relied on previous High Court judgments in similar matters where the appellate authority was directed to consider appeals and coercive recovery was restrained until then. Revenue's Contention: The judgment does not record any specific contentions made by the revenue regarding the demand of 20% of the disputed amounts or their stance on 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

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 22ND DAY OF JULY 2020 / 31ST ASHADHA, 1942 WP(C).No.14719 OF 2020 PETITIONER/S: THE KOONAMMOOCHI PEOPLES SERVICE CO-OPERATIVE BANK LTD.NO. 603,KOONAMMOOCHI.P.O., THRISSUR-680504, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.P.C.SASIDHARAN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, S.T.NAGAR, THRISSUR-680001. 2 THE INCOME TAX OFFICER, WARD 1 AND TPS, GURUVAYOOR, OFFICE OF THE INCOME TAX OFFICER, WEST NADA, GURUVAYOOR THRISSUR-680101. OTHER PRESENT: SC-SRI.JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.07.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.14719 OF 2020 2

JUDGMENT Against Exts.P1, P6 and P11 assessment orders under the Income Tax Act, the petitioner has preferred Exts.P3, P8 and P13 appeals together with Exts.P5, P10 and P15 stay petitions before the 1st respondent. It would appear that on approaching the 2nd respondent, pending disposal of the stay petition, the petitioner was directed by Exts.P4, P9 and P14 orders to pay 20% of the disputed amounts as a condition for grant of stay for recovery of the balance amount, pending consideration of the stay application by the appellate authority. The case of the petitioner in the writ petition is essentially that the issue involved in the appeal before the appellate authority is the permissibility of a deduction under Section 80P of the Income Tax Act in its relation to Co-operative Societies. It is pointed out that in respect of the same issue, this Court has in connected matters directed the appellate authority to consider and pass orders in the appeal, and restrained the respondents from resorting to any coercive steps for recovery of the disputed amounts, till then.

2.

I have heard the learned counsel for the petitioner as also Sri.Jose Joseph, the learned Standing Counsel for the respondents. On a consideration of the facts and circumstances of the case and the submissions made across the Bar and taking cue from the judgments of this Court in similar matters, I deem it appropriate to dispose the writ petition by directing the 1st respondent to consider and pass orders on Exts.P3, P8 and P13 appeals within an outer time limit of six months from the date of receipt of a copy of this judgment, after hearing the petitioner. It is made clear that till such time as orders

WP(C).No.14719 OF 2020 3 are passed by the 1st respondent as directed, and the order communicated to the petitioner, the recovery steps for recovery of amounts confirmed against the petitioner by the assessment orders in question shall be kept in abeyance. Further, in view of the directions given above, I set aside Exts.P4, P9 and P14 orders of the 2nd respondent that direct the petitioner to remit 20% of the disputed amounts, pending disposal of the appeal. The petitioner shall produce a copy of this judgment together with a copy of the writ petition before the 2nd respondent for further action. A.K.JAYASANKARAN NAMBIAR JUDGE WP(C).No.14719 OF 2020 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 1.12.2017. EXHIBIT P2 TRUE COPY OF THE DEMAND NOTICE DATED 1.12.2017. EXHIBIT P3 TRUE COPY OF THE APPEAL DATED 2.1.2018. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 2.7.2019. EXHIBIT P5 TRUE COPY OF THE STAY PETITION DATED 12.7.2019. EXHIBIT P6 TRUE COPY OF THE ASSESSMENT ORDER DATED 19.11.2018. EXHIBIT P7 TRUE COPY OF THE DEMAND NOTICE DATED 20.11.2018. EXHIBIT P8 TRUE COPY OF THE APPEAL DATED 15.12.2018. EXHIBIT P9 TRUE COPY OF THE ORDER DATED 2.7.2019. EXHIBIT P10 TRUE COPY OF THE STAY PETITION DATED 12.7.2019. EXHIBIT P11 TRUE COPY OF THE ASSESSMENT ORDER DATED 21.11.2018. EXHIBIT P12 TRUE COPY OF THE DEMAND NOTICE DATED 21.11.2018. EXHIBIT P13 TRUE COPY OF THE APPEAL DATED 8.12.2018. EXHIBIT P14 TRUE COPY OF THE ORDER DATED 2.7.2019. EXHIBIT P15 TRUE COPY OF THE STAY PETITION DATED 12.7.2019. EXHIBIT P16 TRUE COPY OF THE JUDGMENT DATED 1.7.2019 IN W.A.NO.1536 OF 2019.

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