MYLOM RURAL COOPERATIVE SOCIETY LTD NO.Q 1429 vs. THE INCOME TAX OFFICER WARD 2(1)

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WP(C)/9634/2020HC KeralaKLHC01024733202005 May 2020Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court found merit in the petitioner's contention that coercive steps pending the statutory appeal would render the appeal redundant and cause severe difficulties. Consequently, the Court directed the respondents not to proceed with any coercive steps against the petitioner until the disposal of the appeal. Furthermore, the Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the appeal within six months. The Court also specified that the disposal should not be insisted upon payment of 10% of the tax demanded, which is a common pre-condition for stay of demand in appeals.

What were the facts?

The petitioner, Mylom Rural Co-operative Society Ltd., is an income tax assessee. For the assessment year 2017-18, the Income Tax Officer (1st respondent) disallowed the petitioner's claim for deduction under Section 80P of the Income Tax Act, demanding Rs. 10,56,683/- as tax. The petitioner filed an appeal (Ext.P5) before the Commissioner of Income Tax (Appeals) (2nd respondent), challenging the disallowance. While the appeal was pending, recovery proceedings were initiated by the respondents. The petitioner filed a writ petition before the High Court of Kerala seeking to prevent coercive steps during the pendency of the appeal.

What were the issues?

1. Whether the initiation of recovery proceedings by the respondents for tax allegedly due, while a statutory appeal is pending before the Commissioner of Income Tax (Appeals), renders the appellate process redundant and causes severe difficulties to the assessee? (Question of procedure and equity) The petitioner argued that proceeding with coercive steps pending the statutory appeal would make the appeal redundant and cause severe difficulties. The revenue, represented by the standing counsel, took notice but no specific arguments against this contention were recorded in the judgment.

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 BECHU KURIAN THOMAS TUESDAY, THE 5TH DAY OF MAY, 2020/15TH VAISAKHA, 1942 W.P(C).NO.9634 OF 2020 PETITIONER : MYLOM RURAL CO-OPERATIVE SOCIETY LTD.NO. Q 1429, MYLOM POST INCHAKKADU, KALAYAPURAM, KOTTARAKKARA, KOLLAM DISTRICT. REPRESENTED BY ITS SECRETARY. BY ADVS.M.SASINDRAN SREEHARI.I. RESPONDENTS : 1. THE INCOME TAX OFFICER WARD 2, AAYAKAR BHAVAN, INCOME TAX OFFICE, NEAR KARBALA JUNCTION, RAILWAY STATION ROAD, KOLLAM - 691 001. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), KOLLAM – 691 001 BY SRI.JOSE JOSEPH, SC THIS WRIT PETITION HAVING COME UP FOR ADMISSION ON 05.05.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC. NO.9634/2020 -:2:-

JUDGMENT

I have heard the counsel for the petitioner through video conferencing. I have also heard the standing counsel for income tax who has taken notice on behalf of respondents. In the facts and circumstances of the case, I deem it fit that this writ petition be disposed of.

2.

Petitioner is an income tax assessee and the issue relates to the assessment year 2017-18. By Ext.P3, the 1st respondent disallowed petitioner’s claim for deduction under Section 80P of the Income Tax Act and demanded an amount of Rs.10,56,683/- as tax.

3.

Challenging the said assessment, petitioner has preferred Ext.P5 appeal contending that the reason for disallowing petitioner’s claim for deduction under section 80P is not tenable. While the appeal is pending, the respondents have initiated recovery proceedings to recover the tax allegedly due.

4.

I find force in the contention of the counsel for the petitioner that if the respondents proceed with coercive steps pending consideration of the statutory appeal, the same will be rendered redundant and petitioner will be put to severe difficulties.

5.

In such circumstances, I dispose of the writ petition by directing the respondents not to proceed with any coercive steps against the petitioner pending disposal of Ext.P5 appeal. I also direct the 2nd respondent to consider and dispose of Ext. P5 appeal within a period of 6 months without insisting on payment of 10% of the tax demanded. BECHU KURIAN THOMAS JUDGE vps

Appendix — schedule of exhibits
APPENDIX PETITIONER’S EXHIBITS : EXHIBIT P1 : A TRUE COPY OF THE CERTIFICATE DATED 15.3.2005 ISSUED BY THE REGISTRAR OF CO- OPERATIVE SOCIETIES (GENERAL), KOLLAM. EXHIBIT P2 : A TRUE COPY OF THE REGISTRATION CERTIFICATE DATED 8.9.2015 ISSUED BY THE ASSISTANT REGISTRAR (GENERAL), KOLLAM. EXHIBIT P3 : A TRUE COPY OF THE ASSESSMENT ORDER DATED 12.12.2019 FOR THE ASSESSMENT YEARS 2017- 2018. EXHIBIT P4 : A TRUE COPY OF THE DEMAND NOTICE DATED 12.12.2019. EXHIBIT P5 : A TRUE COPY OF THE APPEAL MEMORANDUM DATED 25.12.2019 FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P6 : A TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER DATED 24.1.2020. EXHIBIT P7 : A TRUE COPY OF THE JUDGMENT DATED 19.7.2019 IN W.A.NO. 1639 OF 2019 RESPONDENTS' EXHIBITS : NIL // TRUE COPY// P.S. TO JUDGE

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