THE PUNNAYURKULAM SERVICE CO-OPERATIVE BANK LTD.NO.P.417 vs. THE COMMISSIONER OF INCOME TAX(APPEALS)

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WP(C)/9024/2020HC KeralaKLHC01022827202023 March 2020Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN4 pages
AI SummaryRemanded

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 acknowledged that the issue of coverage under Section 80P of the Income Tax Act, 1961, needs to be adjudicated, referencing the Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)]. The Court's reasoning 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. The Court explicitly stated that the writ petition was disposed of without any observation on the merits of the matter.

What were the facts?

The petitioner, The Punnayurkulam Service Co-operative Bank Ltd., filed a writ petition challenging recovery proceedings initiated by the Income Tax Department. The recovery was in relation to assessment years 2012-2013, 2014-2015, 2016-2017, and 2017-2018. Appeals and stay petitions concerning these assessment years were pending before the Commissioner of Income Tax (Appeals), the first appellate authority. The core of the dispute involves the petitioner's eligibility for deductions under Section 80P of the Income Tax Act, 1961. The High Court was seized of the matter on March 23, 2020.

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? (Mixed question of law and fact, concerning Section 80P of the Income Tax Act, 1961 and principles of recovery during pendency of appeals). Assessee's contention: The assessee argued that recovery should be stayed as appeals and stay petitions are pending before the Commissioner of Income Tax (Appeals). The issue of coverage under Section 80P is to be adjudicated based on the Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)]. Revenue's contention: The judgment does not record any specific contention from the revenue regarding the stay of recovery or the merits of the Section 80P issue.

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.9024 OF 2020 PETITIONER: THE PUNNAYURKULAM SERVICE CO-OPERATIVE BANK LTD.NO.P.417 PUNNIYUKULAM P.O., THRISSUR DISTRICT-679561, REPRESENTED BY ITS SECRETARY. BY ADVS. SRI.P.C.SASIDHARAN SRI.K.S.ANIL RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX(APPEALS) AAYAKAR BHAVAN, S.T.NAGAR, THRISSUR-680001. 2 THE INCOME TAX OFFICER, WARD-2, GURUVAYUR, OFFICE OF THE INCOME TAX OFFICER, 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.9024 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 2012-2013, 2014-2015, 2016-2017 and 2017-2018. Exhibits P8, P13, P3 and P18 appeals and Exhibits P10, P15, P5 and P20 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.9024 of 2020 3 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER DATED 13.12.2018 ALONG WITH COMPUTATION SHEET. EXHIBIT P2OF THE DEMAND NOTICE DATED 13.12.2018. EXHIBIT P3OF THE APPEAL DATED 16.01.2019. EXHIBIT P4OF THE ORDER DATED 11.02.2019. EXHIBIT P5OF THE STAY PETITION DATED 20.02.2019. EXHIBIT P6OF THE ASSESSMENT ORDER DATED 11.11.2019 ALONG WITH COMPUTATION SHEET. EXHIBIT P7OF THE DEMAND NOTICE DATED 11.11.2019. EXHIBIT P8OF THE APPEAL DATED 18.12.2019. EXHIBIT P9OF THE ORDER DATED 20.01.2020. EXHIBIT P10OF THE STAY PETITION DATED 24.01.2020. EXHIBIT P11OF THE ASSESSMENT ORDER DATED 11.11.2019 ALONG WITH COMPUTATION SHEET. EXHIBIT P12OF THE DEMAND NOTICE DATED 11.11.2019. EXHIBIT P13OF THE APPEAL DATED 19.12.2019. EXHIBIT P14OF THE ORDER DATED 31.01.2020. EXHIBIT P15OF THE STAY PETITION DATED 06.02.2020. EXHIBIT P16OF THE ASSESSMENT ORDER DATED

W.P.(C) No.9024 of 2020 4 15.11.2019 ALONG WITH COMPUTATION SHEET. EXHIBIT P17OF THE DEMAND NOTICE DATED 15.11.2019. EXHIBIT P18OF THE APPEAL DATED 12.12.2019. EXHIBIT P19OF THE ORDER DATED 17.01.2020. EXHIBIT P20OF THE STAY PETITION DATED 24.01.2020. EXHIBIT P21OF THE JUDGMENT DATED 01.07.2019 IN W.A.NO.1536 OF 2019.

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