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

WP(C)/5054/2020HC KeralaKLHC01013579202024 February 2020Author: HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE3 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court of Kerala directed the Income Tax Appellate Tribunal (ITAT) to dispose of the appeal filed by the Chittur Service Co-operative Bank Ltd. within a period of two months after issuing notice to the petitioner. The Court also ordered that recovery proceedings against the petitioner shall be kept in abeyance until the disposal of the appeal. The Court's reasoning appears to be based on its inherent power to ensure timely justice and to prevent undue hardship to the assessee, considering the pendency of the appeal. The judgment does not delve into the legality of the 20% deposit requirement itself but focuses on the procedural aspect of expeditious disposal and interim relief. The specific issue of whether the 20% deposit is mandatory was not directly decided, but the Court granted a stay on recovery pending appeal.

What were the facts?

The petitioner, Chittur Service Co-operative Bank Ltd., filed an appeal before the Income Tax Appellate Tribunal (ITAT) against an assessment order passed under the Income Tax Act. The assessing authority demanded payment of 20% of the disputed tax to grant a stay against recovery pending the appeal. The co-operative bank challenged this demand and the subsequent recovery proceedings. The matter came before the High Court of Kerala.

What were the issues?

1. Whether the ITAT has the power to direct the disposal of an appeal within a specific timeframe, considering the statutory provisions governing appeals under the Income Tax Act? 2. Whether the requirement of depositing 20% of the disputed tax for a stay pending appeal is mandatory and absolute, or if the appellate authority has discretion in such matters? Assessee's Contention: The petitioner, Chittur Service Co-operative Bank Ltd., implicitly argued that the demand for 20% of the disputed tax for a stay was onerous and sought relief from the High Court. They relied on various judgments of the High Court to support their plea for a stay on recovery and expeditious disposal of their appeal. Revenue's Contention: The judgment does not explicitly record the revenue's contentions. However, the revenue's position, as indicated by the assessing authority's demand, was that 20% of the disputed tax must be paid to grant a stay.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE MONDAY, THE 24TH DAY OF FEBRUARY 2020 / 5TH PHALGUNA, 1941 WP(C).No.5054 OF 2020(F) PETITIONER: THE CHITTUR SERVICE CO-OPERATIVE BANK LTD., NO.18, CHITTUR, PALAKKAD-678 101, REPRESENTED BY ITS SECRETARY, NATARAJAN C., AGED 57, S/O. CHAMY. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SMT.K.KRISHNA RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD 5, AYAKAR BHAVAN, PALAKKAD-678 014. 2 THE COMMISSIONER OF INCOE TAX (APPEALS) AYAKAR BHAVAN, THRISSUR-680 001. 3 THE INCOME TAX APPELLATE TRIBUNAL AYAKAR BHAVAN, KAKKANADU, KOCHI-682 030, REPRESENTED BY ITS REGISTRAR. JOSE JOSEPH SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.5054 OF 2020(F) 2 JUDGMENT Dated this the 24th day of February 2020 The petitioner, a co-operative society filed an appeal as against the assessment order under the Income Tax Act before the 3rd respondent. The assessing authority insisted payment of 20% of the disputed tax to grant stay against recovery, pending appeal. In the light of the various judgments of this Court, the appellate authority-3rd respondent is directed to dispose the appeal within a period of two months after issuing notice to the petitioner. Till then, the recovery proceedings shall be kept in abeyance. Ordered accordingly. The writ petition is disposed of as above. A.MUHAMED MUSTAQUE SAS/24/02/2020 JUDGE

WP(C).No.5054 OF 2020(F) 3

Appendix — schedule of exhibits

APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE IST RESPONDENT FOR THE YEAR 2016-17 DATED 28.12.2018. EXHIBIT P2 COPY OF APPELLATE ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2016-17 DATED 10.12.2019. EXHIBIT P3 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT 2016-17 DATED 5.2.2020. EXHIBIT P4 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 5.2.2020. RESPONDENTS' EXHIBITS:- NIL //TRUE COPY// P.A. TO JUDGE

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