UZHUVA SERVICE CO-OPERATIVE BANK LTD, vs. INCOME TAX OFFICER

WP(C)/5915/2020HC KeralaKLHC01015611202027 February 2020Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the Commissioner of Income Tax (Appeals) (2nd respondent) and the Assistant Registrar of the Income Tax Appellate Tribunal (3rd respondent) to consider and dispose of the statutory appeals filed by the petitioner (Exts.P3 and P6) at the earliest. The Court also directed that recovery proceedings and collection of the assessed tax be kept in abeyance pending the disposal of these appeals. Furthermore, Exts.P8 and P9, which were notices to freeze the bank account, were stayed until the appeals are disposed of. The Court's reasoning was based on the similarity of facts to the Division Bench judgment in W.A. No. 1536 of 2019 and a Full Bench decision in The Mavilayi Service Co-operative Bank Ltd. v. The Commissioner of Income Tax, Calicut [2019 (2) KHC 287]. The operative direction is to dispose of the appeals expeditiously and stay recovery.

What were the facts?

The petitioner, Uzhuva Service Co-operative Bank Ltd., represented by its Secretary, filed a writ petition before the High Court of Kerala. The petitioner was aggrieved by notices (Exts.P8 and P9) dated February 26, 2020, issued by the Income Tax Officer (1st respondent) to freeze the bank's account for recovery of the entire tax amount. The petitioner relied on a previous judgment dated July 1, 2019, in W.A. No. 1536 of 2019 and connected cases, which directed the disposal of appeals and granted a stay on recovery proceedings during the pendency of appeals. The Standing Counsel for the Income Tax Officer admitted that the facts of the present case were substantially similar to those in the cited Division Bench judgment.

What were the issues?

1. Whether the recovery proceedings for the entire tax amount should be stayed pending the disposal of the statutory appeals filed by the petitioner? Assessee's Contention: The petitioner argued that recovery proceedings should be stayed, citing the Division Bench judgment in W.A. No. 1536 of 2019, which directed disposal of appeals and granted a stay on recovery during the pendency of appeals. The petitioner also pointed to the issuance of notices (Exts.P8 and P9) to freeze their account for immediate recovery. Revenue's Contention: The Standing Counsel for the revenue admitted that the facts of the case were substantially the same as those considered by the Division Bench in W.A. No. 1536 of 2019 and that the said judgment could be followed.

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C).No.5915 OF 2020

W.A No.1536 of 2019

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI THURSDAY, THE 27TH DAY OF FEBRUARY 2020 / 8TH PHALGUNA, 1941 WP(C).No.5915 OF 2020(L) PETITIONER/S: UZHUVA SERVICE CO-OPERATIVE BANK LTD, NO.A.305, PATTANAKKAD.P.O, CHERTHALA, ALAPPUZHA-688531, REPRESENTED BY ITS SECRETARY BY ADVS. SRI.C.A.JOJO SMT.SWATHY S. RESPONDENT/S: 1 INCOME TAX OFFICER WARD-4, ALAPPUZHA, ALAPPUZHA-688011 2 COMMISSIONE OF INCOME TAX(APPEALS) OFFICE OF THE COMMISSIONER OF INCOME TAX, KOCHI-686002 3 ASSISTANT REGISTRAR OF INCOME TAX APPELLATE TRIBUNAL COCHIN, BENCH, KAKKANAD-682037 4 THE BRANCH MANAGER ALAPPUZHA DCB [DISTRICT CO-OPERATIVE BANK] MAIN, OPP.MUNICIPAL TOWN HALL, ALAPPUZHA, KERALA-688011 OTHER PRESENT: SC JOSE JOSEPH., P.C. SASIDHARAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No. 5915/2020 -2- J U D G M E N T Dated this the 27th day of February 2020 Heard Advocate C.A. Jojo for petitioner, Advocate P.C.Sasidharan for R4 and Advocate Jose Joseph, Standing Counsel for R1 and R2. 2. Petitioner refers to and relies on judgment dated 01.07.2019 in W.A No.1536 of 2019 and connected cases to contend that the Division Bench directed disposal of appeal and granted stay of recovery proceedings during the pendency of the appeal. The petitioner submits that the 1st respondent has issued Exts.P8 and P9 notices to the Bank dated 26.02.2020 to freeze the account to recover the entire tax amount. 3. The learned Standing Counsel admits that the facts of the case are substantially same and similar to the facts noted by the Division Bench in W.A. No.1536 of 2019, hence can be W.P.(C) No. 5915/2020 -3- followed. Hence, the writ petition is disposed of directing the 2nd and 3rd respondents to consider and dispose of the statutory appeals [Exts.P3 and P6 respectively] filed by the petitioner herein at the earliest taking note of the Full Bench decision reported in The Mavilayi Service Co-operative Bank Ltd, v. The Commissioner of Income Tax, Calicut [2019 (2) KHC 287] and to keep in abeyance recovery proceedings and collection of tax assessed, pending disposal of such appeal. In the meantime Exts.P8 and P9 are stayed till the appeals are disposed of as directed by this

judgment. S.V.BHATTI JUDGE jjj

W.P.(C) No. 5915/2020 -4- APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 AOF THE ASSESSMENT ORDER AY 2010-11 DATED 21.01.2013 ISSUED BY THE FIRST RESPONDENT EXHIBIT P2 AOF THE APPELLATE ORDER DATED 30.01.2014 ISSUED BY THE SECOND RESPONDENT EXHIBIT P3 AOF THE APPEAL FOR AY 2010- 11 BEFORE THE 3RD RESPONDENT DATED 14.04.2014 EXHIBIT P4 AOF THE ASSESSMENT ORDER AY 2017-18 DATED 26.12.2019 ISSUED BY THE FIRST RESPONDENT EXHIBIT P5 AOF THE DEMAND NOTICE U/S 156 DATED 26.12.2019 ISSUED BY THE FIRST RESPONDENT EXHIBIT P6 AOF THE APPEAL FOR AY 2017-18 BEFORE THE 2ND RESPONDENT DATED 20.01.2019 EXHIBIT P7 AOF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 04.02.2020 FOR 20% OF TAX FOR AY 2017-18 EXHIBIT P8 AOF NOTICE NOTICE U/S 226(3) FOR AY 2017-18 DATED 26.02.2020 EXHIBIT P9 AOF NOTICE NOTICE U/S 226(3) FOR AY 2010-11 DATED 26.02.2020

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