THE VALAPAD SERVICE CO-OPERATIVE BANK vs. THE COMMISSIONER OF INCOME TAX(APPEALS)

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WP(C)/9085/2020HC KeralaKLHC01022822202023 March 2020Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala held that recovery proceedings should be stayed until the appeals are disposed of by the first appellate authority. The court reasoned that the appeals and stay petitions were pending before the Commissioner of Income Tax (Appeals). The court explicitly stated that the writ petition was disposed of with this direction, without making any observations on the merits of the matter. Therefore, the operative direction was a stay of recovery pending appeal disposal.

What were the facts?

The petitioner, The Valapad Service Co-operative Bank Ltd., filed a writ petition before the High Court of Kerala challenging the recovery proceedings initiated by the Income Tax Department. The recovery was in relation to assessment years 2014-2015, 2016-2017, and 2017-2018. Appeals and stay petitions were pending before the Commissioner of Income Tax (Appeals), the first appellate authority. The core of the dispute revolved around the petitioner's eligibility for deduction under Section 80P of the Income Tax Act, 1961, a matter to be decided in light of a Full Bench decision.

What were the issues?

1. Whether the recovery proceedings initiated by the revenue should be stayed pending the disposal of appeals before the first appellate authority, considering the pendency of stay petitions. This is a question of mixed law and fact, concerning the procedural fairness and the impact of pending appeals on recovery actions. Assessee's Contention: The assessee argued implicitly by filing the writ petition that recovery should be stayed as appeals and stay petitions were pending before the CIT(A). Revenue's Contention: The judgment records no specific contention from the revenue regarding the stay of recovery.

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 K.VINOD CHANDRAN MONDAY, THE 23RD DAY OF MARCH 2020 / 3RD CHAITHRA, 1942 WP(C).No.9085 OF 2020 PETITIONER/S: THE VALAPAD SERVICE CO-OPERATIVE BANK LTD, NO.F.207, VALAPAD, THRISSUR - 680567, REPRESENTED BY ITS SECRETARY BY ADV. SRI.P.C.SASIDHARAN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX(APPEALS) AAYAKAR BHAVAN, S.T. NAGAR, THRISSUR-680001. 2 THE INCOME TAX OFFICER, WARD 2(5), THRISSUR, OFFICE OF THE INCOME TAX OFFICER, SHAKTHANTHAMPURAN NAGAR, THRISSUR-680001. OTHER PRESENT: SRI.JOSE JOSEPH, SC, IT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.9085 of 2020 2

JUDGMENT The writ petition is against the recovery initiated while appeals are pending. The issue is also with respect to the coverage of the petitioner under Section 80P of the Income Tax Act, 1961, which has to be adjudicated on the basis of the Full Bench decision in Mavilayil Service Co - operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)].

2.

In the present case, the demand is with respect to assessment years 2014-2015, 2016-2017 and 2017-2018. Exhibits P3, P8 and P13 appeals and Exhibits P5, P10 and P15 stay petitions are pending before the first appellate authority. In the circumstance of the case, I am of the opinion that there shall be a stay of recovery till the appeals are disposed of. The writ petition is disposed of with the above direction, without any observation on the merits of the matter. K.VINOD CHANDRAN JUDGE

W.P.(C) No.9085 of 2020 3 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER DATED 20.12.2016 ALONG WITH THE COMPUTATION SHEET. EXHIBIT P2OF THE DEMAND NOTICE DATED 20.12.2016. EXHIBIT P3OF THE APPEAL DATED 27.1.2017. EXHIBIT P4OF THE ORDER DATED 30.03.2017. EXHIBIT P5OF THE STAY PETITION DATED 4.7.2017. EXHIBIT P6OF THE ASSESSMENT ORDER DATED 14.12.2018 ALONG WITH COMPUTATION SHEET. EXHIBIT P7OF THE DEMAND NOTICE DATED 14.12.2018. EXHIBIT P8OF THE APPEAL DATED 18.01.2019. EXHIBIT P9OF THE ORDER DATED 11.2.2019. EXHIBIT P10OF THE STAY PETITION DATED 19.2.2019. EXHIBIT P11OF THE ASSESSMENT ORDER DATED 13.11.2019 ALONG WITH COMPUTATION SHEET. EXHIBIT P12OF THE DEMAND NOTICE DATED 13.11.2019. EXHIBIT P13OF THE APPEAL DATED 28.11.2019. EXHIBIT P14OF THE ORDER DATED 17.1.2020 EXHIBIT P15OF THE STAY PETITION DATED 24.1.2020. EXHIBIT P16OF THE JUDGMENT DATED 1.7.2019 IN WA NO.1536 OF 2019.

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