M/S. PARAVUR WEST CO-OP. BANK LTD. vs. THE INCOME TAX OFFICER,

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WP(C)/9617/2020HC KeralaKLHC01024642202030 April 2020Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that if the respondents proceed with coercive steps pending consideration of the statutory appeal, the appeal would be rendered redundant and the petitioner would be put to severe difficulties. Therefore, the Court found force in the petitioner's contention. The writ petition was disposed of with a direction to the respondents not to proceed with coercive steps against the petitioner pending the disposal of the appeal and delay petition. The Court further directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the appeal and delay petition within a period of 6 months without insisting on the payment of the tax demanded. The ratio is that the appellate process should not be undermined by premature recovery actions, and the appellate authority should be allowed to decide the appeal on merits without the pressure of recovery.

What were the facts?

The petitioner, M/s. Paravur West Co-op. Bank Ltd., is an income tax assessee. For the assessment year 2017-2018, the Income Tax Officer (1st respondent) disallowed the petitioner's claim for deduction under Section 80P of the Income Tax Act, demanding an amount of Rs. 92,82,626/- as tax and interest. The petitioner challenged this assessment by filing an appeal (Ext.P2) with the Commissioner of Income Tax (Appeals) (2nd respondent), which was filed with a delay of 22 days. While the appeal and delay petition were pending, the respondents initiated recovery proceedings. The petitioner filed a writ petition before the High Court of Kerala seeking to prevent coercive recovery steps.

What were the issues?

1. Whether the respondents should be restrained from initiating coercive recovery proceedings against the petitioner pending the disposal of the statutory appeal and delay petition before the Commissioner of Income Tax (Appeals)? (Question of mixed law and fact, concerning the procedural fairness and the impact of recovery proceedings on the appellate process). Assessee's contention: The petitioner argued that proceeding with coercive steps while the statutory appeal and delay petition are pending would render the appeal redundant and cause severe difficulties. They relied on the principle that recovery proceedings should not frustrate the appellate process. Revenue's contention: The judgment does not record any specific contentions from the revenue regarding the initiation of recovery proceedings or their stance on the pending appeal.

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 THURSDAY, THE 30TH DAY OF APRIL, 2020/10TH VAISAKHA, 1942 W.P(C) NO. 9617 OF 2020 PETITIONER M/S. PARAVUR WEST CO-OP. BANK LTD. NO. R-130, P.O NORTH PARUR, ERNAKULAM – 683 513 REPRESENTED BY ITS SECRETARY, SMT. TESSY K.P BY ADVS SRI. V.P NARAYAN, SMT. NISHA JOHN, SMT. DIVYA RAVINDRAN AND SRI.BASKARAKRISHNAN .R RESPONDENTS 1. THE INCOME TAX OFFICER, WARD – 3, TPS, KAP COMMERCIAL COMPLEX O/O ADDITIONAL COMMISSIONER OF INCOME TAX ALUVA RANGE, R.S. ROAD, ALUVA – 683 101 2. THE COMMISSIONER OF INCOME TAX (APPEALS), 28/243, “POORNIMA”, NEAR MANORAMA JUNCTION, PANAMPILLYNAGAR,KOCHI – 682 036 R1-2 BY SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) TMP HAVING COME UP FOR ADMISSION ON 30.04.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C. NO. 9617 OF 2020 ..2..

JUDGMENT I have heard the counsel for the petitioner through video conferencing. I have also heard the learned 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 2017-2018. By Ext.P1, the 1st respondent disallowed petitioner's claim for deduction under Section 80P of the Income Tax Act and demanded an amount of Rs.92,82,626/- as tax and interest.

3.

Challenging the said assessment, petitioner has preferred Ext.P2 appeal with a delay of 22 days, contending that the reason for disallowing petitioner's claim for deduction under Section 80P is not tenable. While the appeal and the delay petition are pending consideration, respondents are W.P(C. NO. 9617 OF 2020 ..3.. initiating 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. In such circumstances, I dispose of the writ petition by directing the respondents not to proceed with coercive steps against the petitioner pending disposal of Ext.P2 appeal and delay petition. I also direct the 2nd respondent to consider and dispose of Ext.P2 appeal and delay petition within a period of 6 months without insisting on payment of the tax demanded. BECHU KURIAN THOMAS

JUDGE BNG

W.P(C. NO. 9617 OF 2020 ..4..

Appendix — schedule of exhibits
APPENDIX EXHIBIT-P1 – TRUE COPY OF ASSESSMENT ORDER DATED 31.12.2019 FOR AY-2017-18 ALONG WITH DEMAND NOTICE PASSED BY THE 1ST RESPONDENT. EXHIBIT-P2– TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 21.02.2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR AY-2017-18. EXHIBIT-P3 – TRUE COPY OF THE STAY PETITION DATED 18.03.2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR AY-2017-18 EXHIBIT-P4 - TRUE COPY OF THE DELAY PETITION DATED 21.02.2020 ALONG WITH THE AFFIDAVIT, DATED FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR AY-2017-18.

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