OLLUKKARA SERVICE CO-OPERATIVE BANK LIMITED, NO.544, vs. THE INCOME TAX OFFICER,

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WP(C)/9339/2020HC KeralaKLHC01023761202028 April 2020Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court found merit in the petitioner's contention that initiating coercive steps while a statutory appeal is pending would render the appeal redundant and cause severe difficulties. The Court directed the third respondent (Assistant Registrar, Income Tax Appellate Tribunal) to consider and dispose of the pending appeal (Ext. P4) within a period of six months. Crucially, the Court ordered that no recovery proceedings for the amount due under the assessment order shall be initiated against the petitioner until the appeal is disposed of. The ratio decidendi is that the pendency of a statutory appeal should ordinarily stay coercive recovery actions to preserve the efficacy of the appellate process.

What were the facts?

The petitioner, Ollukkara Service Co-operative Bank Limited, is an income tax assessee. The assessment year in question is 2009-10. The first respondent, the Income Tax Officer, disallowed the petitioner's claim for deduction under Section 80P of the Income Tax Act, demanding Rs. 12,88,300/- as tax. An appeal against this order was allowed. However, a revised order was subsequently passed (Ext. P3). An appeal against this revised order (Ext. P4) is currently pending before the Income Tax Appellate Tribunal. Despite the pending appeal, the first and second respondents initiated recovery proceedings for the disputed tax amount.

What were the issues?

1. Whether coercive recovery proceedings can be initiated by the revenue while a statutory appeal filed by the assessee is pending before the Income Tax Appellate Tribunal, potentially rendering the appeal redundant. Assessee's Contention: The petitioner argued that proceeding with coercive steps pending the consideration of their statutory appeal would render the appeal redundant and cause severe difficulties. They relied on the principle that statutory remedies should not be frustrated by premature recovery actions. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the initiation of recovery proceedings while the appeal was pending. The revenue's standing counsel appeared and took notice.

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 28TH DAY OF APRIL, 2020/8TH VAISAKHA, 1942 W.P(C) NO.9339 OF 2020 PETITIONER: OLLUKKARA SERVICE CO-OPERATIVE BANK LIMITED, NO.544 REPRESENTED BY ITS SECRETARY, MANNUTHY P.O, THRISSUR DISTRICT, KERALA, PIN-680561 BY ADV. SRI.C. A. JOJO. RESPONDENT/RESPONDENTS: 1. THE INCOME TAX OFFICER, WARD2 (3), AYAKAR BHAVAN, SAKTHAN STAND, THRISSUR-68001 2. THE COMMISSIONER, AYAKAR BHAVAN, SAKTHAN STAND, THRISSUR-68001 3. THE ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, KAKKANAD, COCHIN-682037 SRI. JOSE JOSEPH, SC THIS WRIT PETITION HAVING COME UP FOR ADMISSION ON 28.04.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 W.P.(C) No. 9339/2020

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 nature of the facts and circumstances of the case, this writ petition can be disposed of.

2.

Petitioner is an income tax assessee and the issue relates to the assessment year 2009-10. By Ext. P1, the 1st respondent disallowed petitioner’s claim for detection under Section 80P of the Income Tax Act and demanded an amount of Rs.12,88,300/- as tax. Appeal filed against Ext.P1 was allowed. However, by Ext.P3, a revised order was passed as Ext.P3. Appeal against Ext.P3 was preferred as Ext.P4 and the same is pending.

3.

While the appeal is pending, 1st and 2nd respondents are 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 third respondent to consider and dispose of Ext.P4 appeal within a period of six months. Till the appeal is disposed of, no proceedings for recovery of the amount due under the assessment order shall be initiated as against the petitioner. BECHU KURIAN THOMAS, JUDGE csl

Appendix — schedule of exhibits
APPENDIX PETITIONERS EXTS: EXHIBIT-P1: A TRUE COPY OF THE ASSESSMENT ORDER DATED 15.12.2016 AY 2009-10 ISSUED BY THE FIRST RESPONDENT EXHIBIT P2:. A TRUE COPY OF THE DEMAND NOTICE DATED 15.12.2016 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P3. A TRUE COPY OF THE APPELLATE ORDER DATED 29.11.2019 FOR AY 2009-10 ISSUED BY THE 2ND RESPONDENT EXHIBIT P4. A TRUE COPY OF THE APPEAL WITH PETITION FILED BEFORE THE3RD RESPONDENT FOR AY 2009-10 DATED 29.01.2020

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