THE VARAVOOR SERVICE CO-OPERATIVE BANK LTD NO.R. 299 vs. THE COMMISSIONER OF INCOME TAX(APPEALS)

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WP(C)/8882/2020HC KeralaKLHC01022833202023 March 2020Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN3 pages
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What did the High Court hold?

The High Court held that recovery proceedings should be stayed until the appeals are disposed of by the first appellate authority. The Court did not make any observations on the merits of the case, including the petitioner's eligibility for deduction under Section 80P of the Income Tax Act, 1961. The decision to stay recovery was based on the pendency of appeals and stay petitions before the Commissioner of Income Tax (Appeals). The operative direction was to stay the recovery until the appeals are decided. No issue was left undecided; the court specifically refrained from deciding the merits.

What were the facts?

The petitioner, The Varavoor Service Co-operative Bank Ltd, filed a writ petition challenging recovery proceedings initiated by the respondents, the Commissioner of Income Tax (Appeals) and the Income Tax Officer. The dispute pertains to assessment years 2012-2013 and 2017-2018. Appeals and stay petitions are pending before the first appellate authority. The core issue revolves 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 recovery proceedings can be initiated while appeals and stay petitions are pending before the first appellate authority, particularly concerning the coverage of the petitioner under Section 80P of the Income Tax Act, 1961? Assessee's Contention: The assessee, The Varavoor Service Co-operative Bank Ltd, implicitly argues that recovery should be stayed pending the disposal of their appeals and stay petitions before the Commissioner of Income Tax (Appeals). They rely on the principle that recovery should not be pursued while the tax liability is under dispute and subject to appellate review. Revenue's Contention: The judgment does not record any specific contentions made by the revenue regarding the stay of recovery or the merits of the Section 80P issue. The revenue's role is represented by the respondents against whom the writ petition was filed.

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.8882 OF 2020 PETITIONER: THE VARAVOOR SERVICE CO-OPERATIVE BANK LTD NO.R. 299 VARAVOOR, THRISSUR-680585, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.P.C.SASIDHARAN RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX(APPEALS) AAYAKAR BHAVAN, S.T. NAGAR, THRISSUR-680001. 2 THE INCOME TAX OFFICER, WARD 2, GURUVAYOOR, OFFICE OF THE INCOME TAX OFFICER, CITY PLAZA, WEST NADA, GURUVAYOOR-680101. 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.8882 of 2020 2

J U D G M E N T 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 2012-2013 and 2017-2018. Exhibits P8 and P3 appeals and Exhibits P5 and P10 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. pkk K.VINOD CHANDRAN, JUDGE

W.P.(C) No.8882 of 2020 3 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER DATED 13.11.2019. EXHIBIT P2OF THE DEMAND NOTICE DATED 13.11.2019. EXHIBIT P3OF THE APPEAL DATED 13.12.2019. EXHIBIT P4OF THE ORDER DATED 17.1.2020. EXHIBIT P5OF THE STAY PETITION DATED 24.1.2020. EXHIBIT P6OF THE ASSESSMENT ORDER DATED 19.11.2019.` EXHIBIT P7OF THE DEMAND NOTICE DATED 19.11.2019. EXHIBIT P8OF THE APPEAL DATED 28.12.2019. EXHIBIT P9OF THE ORDER DATED 17.01.2020. EXHIBIT P10OF THE STAY PETITION DATED 24.01.2020. EXHIBIT P11OF THE JUDGMENT DATED 1.7.2019 IN WA NO.1536 OF 2019.

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