THE PATHANAPURAM PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL LTD.NO.Q.995 vs. THE INCOME TAX OFFICER,

WP(C)/8876/2020HC KeralaKLHC01022791202024 April 2020Author: HONOURABLE MR.JUSTICE N.NAGARESH4 pages

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What did the High Court hold?

The High Court held that if the respondents proceed with coercive steps pending consideration of a statutory appeal, the statutory remedy available to the petitioner would be negated, and the petitioner would likely be put to difficulties. Therefore, 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 (Ext.P3) before the second respondent. The second respondent was directed to consider and dispose of the appeal within a period of six months. Additionally, the court directed that the disposal of the appeal should not be insisted upon payment of 20% of the demanded tax, which is a common pre-condition for stay of demand in appeals.

What were the facts?

The petitioner, The Pathanapuram Primary Co-operative Agricultural & Rural Development Bank Ltd, is an income tax assessee. For the assessment year 2017-18, the Income Tax Officer (ITO), the first respondent, disallowed the petitioner's claim for deduction under Section 80-P of the Income Tax Act, demanding ₹1,52,72,027/- as tax. The petitioner filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) (CIT(A)), the second respondent, challenging the ITO's reasoning. While the appeal was pending, the ITO initiated coercive proceedings against the petitioner. The petitioner filed this writ petition before the High Court of Kerala seeking to prevent these coercive steps.

What were the issues?

1. Whether the High Court should intervene by directing the respondents not to proceed with coercive steps against the petitioner pending the disposal of the statutory appeal before the CIT(A)? Assessee's Contention: The assessee argued that if coercive steps are taken pending the statutory appeal, the remedy available to them would be negated, and they would be put to significant difficulties. They relied on the principle that statutory remedies should not be rendered nugatory by premature coercive actions. Revenue's Contention: The revenue did not record any specific contention against the assessee's plea for a stay on coercive steps in the judgment. However, they were represented by their Standing Counsel who took notice of the petition.

Which sections of the Income-tax Act were involved?

Section 80-P

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 N.NAGARESH FRIDAY, THE 24TH DAY OF APRIL 2020 / 4TH VAISAKHA, 1942 WP(C) NO. 8876 OF 2020 Petitioner:- The Pathanapuram Primary Co-operative Agricultural & Rural Development Bank Ltd No.Q 995, Represented by its Secretary, Pathanapuram, Kollam District-Pin-689 695. By Advs. Sri. T.R.Harikumar Sri. Arjun Raghavan Respondents:- 1. The Income Tax Officer, Ward-2, Office of the Income Tax Officer, Aayakar Bhavan, Karbala Junction, Kollam-Pin-691 001. 2. The Commissioner of Income Tax (Appeals) Aayakar Bhavan, Kowdiar,Thiruvananthapuram-Pin-695 003. By Standing Counsel Sri. Christopher Abraham, Income Tax This writ petition having come up for admission on 24.04.2020, the court on the same day passed the following: WPC.8876/2020 : 2 :

JUDGMENT ~ ~ ~ ~ ~ ~ Dated this the 24th day of April, 2020 Standing Counsel for Income Tax takes notice for respondents 1 and 2. 2. Petitioner is an income tax assessee. The assessment year in question is 2017-'

18.

By Ext.P1, the 1st respondent disallowed petitioner's claim for deduction under Section 80-P of the Income Tax Act and demanded ₹1,52,72,027/- as tax. The petitioner filed Ext.P3 appeal contending that reasoning given in Ext.P1 is untenable. Pending the appeal, the 1st respondent initiated coercive proceedings.

Heard learned counsel for the petitioner and learned Standing Counsel for Income Tax.

If the respondents proceed with coercive steps pending consideration of statutory appeal, the statutory : 3 : remedy available to the petitioner will be negated and the petitioner is likely to be put to difficulties. In the circumstances, the writ petition is disposed of directing the respondents not to proceed with coercive steps against the petitioner pending disposal of Ext.P3 appeal. Ext.P3 appeal shall be considered and disposed of by the 2nd respondent within a period of six months, without insisting on payment of 20% of the demanded tax. N. NAGARESH, JUDGE aks/24.04.2020 : 4 :

Appendix — schedule of exhibits

Appendix Petitioner’s Exhibits: Exhibit-P1 A true copy of the assessment order for the year 2017-2018 dated 06-12-2019. Exhibit-P2 A true copy of the notice issued under Section 156 of the Income Tax Act dated 06-12-2019. Exhibit-P3 A true copy of the online appeal dated 26-12-2019, filed against Ext-P1 assessment order, before the 2nd respondent. Exhibit-P4 A true copy of the stay petition filed by the petitioner in Ext-P3 appeal dated 13-03-2020. Exhibit-P5 A true copy of the judgment dated 19-07-2019 in W.A No.1639 of 2019. Exhibit-P6 A true copy of the judgment dated 17-02-2020 in WP(C) No.4433 of 2020.

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