PATHANAMTHITTA SERVICE CO-OPERATIVE BANK LTD. NO.Q 363, vs. THE INCOME TAX OFFICER,

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WP(C)/8946/2020HC KeralaKLHC01022793202024 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). The Court further directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the appeal within a period of six months, without insisting on the payment of 20% of the demanded tax as a condition for the stay.

What were the facts?

The petitioner, Pathanamthitta Service Co-operative Bank Ltd. No. Q 363, is an income tax assessee. For the assessment year 2017-18, the Income Tax Officer (ITO), Ward-3, disallowed the petitioner's claim for deduction under Section 80-P of the Income Tax Act, demanding ₹76,50,374/- as tax. The petitioner filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) challenging the ITO's reasoning. While the appeal was pending, the ITO initiated coercive proceedings and issued a demand (Ext.P5) for 20% of the disputed tax as a condition to stay further action. The petitioner filed this writ petition before the High Court of Kerala seeking to prevent coercive steps.

What were the issues?

1. Whether the respondents can proceed with coercive steps against the petitioner pending disposal of the statutory appeal filed by the petitioner against the assessment order. The assessee contended that proceeding with coercive steps while a statutory appeal is pending would negate the available remedy and cause difficulties. The revenue, represented by the Standing Counsel, did not record any specific arguments against this contention in the judgment, but notice was taken for respondents 1 to 3.

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. 8946 OF 2020 Petitioner:- Pathanamthitta Service Co-operative Bank Ltd. No.Q 363, Represented by its Secretary, Pathanamthitta P.O, Pathanamthitta District-Pin-689 645. By Advs. Sri. T.R.Harikumar Sri. Arjun Raghavan Respondents :- 1. The Income Tax Officer, Ward-3, Office of the Income Tax Officer, Thiruvalla, Pathanamthitta District-Pin-689 645. 2. The Commissioner of Income Tax (Appeals), Office of the Pr. Commissioner of Income Tax, 1st Floor, Public Library Building, Shastri Road, Kottayam-Pin-686 001. 3. The Kerala State Co-operative Bank, District Office, Pathanamthitta, Represented by its General Manager, Pathanamthitta District-Pin-689 645. 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.8946/2020 : 2 :

JUDGMENT ~ ~ ~ ~ ~ ~ Dated this the 24th day of April, 2020 Standing Counsel for Income Tax takes notice for respondents 1 to 3. 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 ₹76,50,374/- 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. The 1st respondent issued Ext.P5 demanding 20% of the disputed tax as a condition to stay further proceedings.

3.

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

: 3 :

4.

If the respondents proceed with coercive steps pending consideration of statutory appeal, the statutory 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 10-12-2019. Exhibit-P2 A true copy of the notice issued under Section 156 of the Income Tax Act dated 10-12-2019. Exhibit-P3 A true copy of the online appeal dated 08-02-2020 filed by the petitioner before the 2nd respondent, against Ext-P1 assessment order. Exhibit-P4 A true copy of the stay petition filed by the petitioner in Ext-P3 appeal dated 08-02-2020. Exhibit-P5 A true copy of the order in F.No.Pr.CIT/Kottayam/ Tech/Stay(1)2019-20 dated 09-03-2020, passed by the 2nd respondent in Ext-P4 stay petition. Exhibit-P6 A true copy of the judgment dated 19-07-2019 in W.A No.1639 of 2019. Exhibit-P7 A true copy of the judgment dated 17-02-2020 in WP(C) No.4433 of 2020.

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