THE PERUVEMBA CO-OPERATIVE URBAN CREDIT SOCIETY LTD.NO.P.1243, vs. THE COMMISSIONER OF INCOME TAX(APPEALS),

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WP(C)/9129/2020HC KeralaKLHC01023304202023 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 filed by the petitioner Society before the first appellate authority are disposed of. The Court based this decision on the pendency of the appeals and the need for adjudication of the issue concerning the coverage of the petitioner under Section 80P of the Income Tax Act, 1961. The Court explicitly stated that the writ petition was disposed of with this direction, without making any observations on the merits of the matter. The operative direction is a stay of recovery pending appeal disposal. No issue was left undecided; the court granted the requested relief of a stay.

What were the facts?

The petitioner, The Peruvemba Co-operative Urban Credit Society Ltd. (Society), filed a writ petition challenging recovery proceedings initiated by the Income Tax Officer (ITO), Ward 2, Palakkad, while appeals were pending before the Commissioner of Income Tax (Appeals) (CIT(A)), Thrissur. The appeals concern assessment years 2016-17 and 2017-18. The core dispute revolves around the Society's eligibility for deduction under Section 80P of the Income Tax Act, 1961. The judgment notes that the issue is to be adjudicated based on a Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut.

What were the issues?

1. Whether recovery proceedings can be initiated while an appeal against the assessment order is pending before the first appellate authority, and if so, under what circumstances? 2. Whether the petitioner Society is eligible for deduction under Section 80P of the Income Tax Act, 1961, for the assessment years 2016-17 and 2017-18? Assessee's Contention: The petitioner Society argued that recovery proceedings should be stayed as appeals are pending before the CIT(A). While not explicitly stated, the context implies the Society is seeking relief from immediate recovery to pursue its appeal on the merits of the Section 80P deduction. Revenue's Contention: The judgment does not record any specific contentions made by the Revenue (Commissioner of Income Tax (Appeals) and Income Tax Officer) regarding the stay of recovery or the merits of the Section 80P deduction. The Revenue was represented by its Standing Counsel.

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.9129 OF 2020 PETITIONER/S: THE PERUVEMBA CO-OPERATIVE URBAN CREDIT SOCIETY LTD.NO.P.1243, THE PERUVEMBA SAHAKARANA URBAN CREDIT SOCIETY, PERUVEMBA, PERUVEMBA POST, PALAKKAD DISTRICT - 678 531. REP. BY THE SECRETARY. BY ADVS. SRI.SAJAN VARGHEESE K. SRI.LIJU. M.P RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX(APPEALS), CIT (A), THRISSUR - 01. 2 THE INCOME TAX OFFICER, WARD 2, AAYAKAR BHAVAN, INCOME TAX OFFICE, ENGLISH CHURCH ROAD, PALAKKAD - 678 014. OTHER PRESENT: R1 & R2 BY 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: WP(C).9129 of 2020 - 2 - K. Vinod Chandran, J. --------------------------------- W.P(C) No.9129 of 2020-M --------------------------------- Dated this the 23rd day of March, 2020

JUDGMENT The writ petition is against the recovery initiated while an appeal is 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 2016-17 and 2017-18. Exhibit P3 and Exhibit P7 are the appeals 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 appeal is 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 Vku/-

WP(C).9129 of 2020 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER DATED 26/12/2018 PASSED BY THE 2ND RESPONDENT. EXHIBIT P2OF THE DEMAND NOTICE ISSUED ON 26/12/2018. EXHIBIT P3OF THE MEMORANDUM OF APPEAL DATED 28/01/2019 SUBMITTED BEFORE THE FIRST RESONDENT. EXHIBIT P4OF THE TAX PAYER COUNTERFOIL DATED 28/01/2019. EXHIBIT P5OF THE ASSESSMENT ORDER DATED 26/12/2019 PASSED BY THE 2ND RESPONDENT. EXHIBIT P6OF THE DEMAND NOTICE ISSUED ON 26/12/2019. EXHIBIT P7OF THE MEMORANDUM OF APPEAL DATED 28/01/2020 SUBMITTED BEFORE THE FIRST RESPONDENT. EXHIBIT P8OF THE TAX PAYER COUNTERFOIL DATED 28/01/2020. EXHIBIT P9OF THE COMMUNICATION DATED 06/02/2020 REGARDING REALISATION OF TAX. EXHIBIT P10OF THE JUDGMENT DATE 01/07/2019 PASSED IN WA NO.1536/2019 ON THE FILE OF THIS HONOURABLE COURT. EXHIBIT P11OF THE JUDGMENT DATED 02/03/2020 PASSED IN WP(C) NO.6147 OF 2020 ON THE FILE OF THIS HON'BLE COURT. []

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