CHENNITHALA TRIPERUNTHARA SERVICE CO-OPERATIVE BANK LTD. vs. COMMISSIONER OF INCOME TAX (APPEALS),

Challenging the aforementioned assessment order petitioner preferred appeal before the 1st respondent along with a stay application.

Learned Counsel for the petitioner submits that petitioner vide impugned order Ext.P6, has been called upon to pay 20% of the assessed amount for the purpose of adjudication of the appeal on merits. In this regard he relied upon the judgment of the Division Bench of this Court in writ appeal No.1536/19 dated 1.7.2019 arising out of judgment dated 31.5.2019 W.P.(C)12843/19. The Division Bench after noticing the decision of the Full Bench of this Court in ITA No.97/16 and connected cases, decided on 19.3.2019 titled as Mavilayi Service Co-operative Bank 287, wherein for considering the appeal the demand of 20% as a condition precedent has been negated. It is contended that the aforementioned judgment was also referred to the appellate authority as evident from Ext.P7, but for the reason best known, no plausible explanation has been given.

Issue notice before admission. Sri.Jose Joseph accepts notice on behalf of the income tax authorities. He submits that the order is in consonance with the provisions of Section 144 of the Income Tax Act and the Circular dated 31.7.2017 mandating the appellate authorities to ask for deposit 20% of the amount for the purpose of entertaining the adjudication of the appeal and submits that there is no illegality or perversity in the order under challenge.

Having heard learned Counsel for the parties and appraised the paper book, I am of the view that the argument of the petitioner is in consonance with the judgment referred to above and reiterated by the Division Bench. The assessing officer or the appellate authority while exercising the power of appeal or stay of the assessment proceedings under section 226 of the Income aCT 1961 are enjoying the obligation to give regard and respect to the directions of the Hon'ble High Court. In other words, it would not necessary that the payment of 20% can be dispensed with only if there is an order of the high court. The judgment of the Full Bench followed by the Division Bench has an enuring effect on all the authorities. The assessing officer despite noticing the order of the High court did not even advert to the reasoning assigned by the Division Bench following the Full Bench decision.

In view of the reason noticed above, the impugned order is set aside. The matter is remitted back to the 1st respondent to decide the appeal on merits within a period of six months, without asking for 20% of the demanded amount, after affording an opportunity of hearing to the petitioner, including revenue for passing a reasonable and speaking order. The writ petition is disposed of. AMIT RAWAL, JUDGE jm/