ELAVOOR SERVICE CO-OPERATIVE BANK LTD vs. THE INCOME TAX OFFICER

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WP(C)/9587/2020HC KeralaKLHC01024621202030 April 2020Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala found merit in the petitioner's contention that coercive steps pending a statutory appeal would render the appeal redundant and cause severe difficulties. Consequently, the Court disposed of the writ petition by directing the respondents not to proceed with any coercive steps against the petitioner pending the disposal of the appeal (Ext. P2). The Court further directed the 1st respondent (Income Tax Officer) to consider and dispose of the appeal within a period of 6 months, without insisting on the payment of the demanded tax. The Court did not decide on the tenability of the deduction claim under Section 80P itself, as that was the subject matter of the pending appeal.

What were the facts?

The petitioner, M/s. Elavoor Service Co-operative Bank 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 a tax amount of ₹88,05,629/-. The petitioner filed an appeal (Ext. P2) against this assessment, arguing that the disallowance was not tenable. While the appeal was pending, the respondents initiated recovery proceedings for the disputed tax amount. The petitioner filed a writ petition before the High Court of Kerala seeking to prevent coercive steps during the pendency of their appeal.

What were the issues?

1. Whether the respondents can initiate coercive recovery proceedings for the disputed tax amount pending the disposal of the petitioner's statutory appeal against the assessment order. The petitioner contended that initiating coercive steps while a statutory appeal is pending would render the appeal redundant and cause severe difficulties. The petitioner argued that the disallowance of the deduction under Section 80P was not tenable. The revenue, represented by the standing counsel, took notice of the petition. No specific arguments were recorded for the revenue regarding the initiation of recovery proceedings or the tenability of the appeal, other than their appearance and representation.

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 30TH DAY OF APRIL, 2020/10TH VAISAKHA, 1942 W.P(C) NO. 9587 OF 2020 PETITIONER : M/S. ELAVOOR SERVICE CO-OPERATIVE BANK LTD. NO. 1009, P.O ELAVOOR, ERNAKULAM – 683 572, REPRESENTED BY ITS SECRETARY SHRI JOSEPH P. JOHN BY ADVS V.P NARAYAN NISHA JOHN DIVYA RAVINDRAN BASKARA KRISHNAN .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, PANAMPILLY NAGAR, KOCHI – 682 036 BY SRI.JOSE JOSEPH, SC THIS WRIT PETITION HAVING COME UP FOR ADMISSION ON 30.04.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C) NO. 9587 OF 2020 : 2 :

JUDGMENT ~ ~ ~ ~ ~ ~ Dated this the 30th day of April, 2020 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.P1, the 1st respondent disallowed petitioner’s claim for deduction under Section 80P of the Income Tax Act and demanded an amount of `88,05,629/- as tax.

3.

Challenging the said assessment, petitioner has preferred Ext. P2 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

W.P(C) NO. 9587 OF 2020 : 3 : 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 any coercive steps against the petitioner pending disposal of Ext.P2 appeal. I also direct the 1st respondent to consider and dispose of Ext. P2 appeal within a period of 6 months without insisting on payment of the tax demanded. BECHU KURIAN THOMAS JUDGE ncd

W.P(C) NO. 9587 OF 2020 : 4 :

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS : EXHIBIT-P1 : TRUE COPY OF ASSESSMENT ORDER DATED 30.12.2019 FOR AY-2017-18 ALONG WITH DEMAND NOTICE PASSED BY THE 1ST RESPONDENT EXHIBIT-P2 : TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 24.01.2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR AY-2017-18. EXHIBIT-P3 : TRUE COPY OF THE STAY PETITION DATED 20.04.2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR AY-2017-18

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