THE MUNDUR SERVICE CO-OPERATIVE BANK LTD. NO.R.189, vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/9159/2020HC KeralaKLHC01023409202023 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 appeal is disposed of by the first appellate authority. The Court acknowledged that the issue of coverage under Section 80P of the Income Tax Act, 1961, needed adjudication based on the Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)]. The Court directed a stay of recovery until the disposal of the pending appeals. The Court explicitly stated that the disposal was made without any observation on the merits of the matter. The operative direction was to stay recovery pending appeal.

What were the facts?

The petitioner, The Mundur Service Co-operative Bank Ltd., filed a writ petition challenging recovery proceedings initiated by the Income Tax Officer (respondent 2) while appeals and stay petitions were pending before the Commissioner of Income Tax (Appeals) (respondent 1). The dispute pertains to assessment years 2015-16 and 2016-17. The core issue revolves around the petitioner's eligibility for deduction under Section 80P of the Income Tax Act, 1961. The petitioner sought a stay on recovery until the appellate authority disposed of their appeals. The High Court considered the pendency of appeals and stay petitions before the first appellate authority.

What were the issues?

1. Whether recovery proceedings can be initiated while an appeal and stay petition are pending before the first appellate authority, particularly concerning the eligibility for deduction under Section 80P of the Income Tax Act, 1961? Assessee's Contention: The assessee argued that recovery should be stayed as appeals and stay petitions were pending before the Commissioner of Income Tax (Appeals). The assessee relied on the Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)] concerning the applicability of Section 80P. 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.

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.9159 OF 2020 PETITIONER/S: THE MUNDUR SERVICE CO-OPERATIVE BANK LTD. NO.R.189, P.O.ANJUR, MUNDUR, THRISSUR-680541, 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(3), THRISSUR, OFFICE OF THE INCOME TAX OFFICER, SAKTHANTHAMPURAM NAGAR, THRISSUR-680001. 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) No.9159 of 2020 - 2 - K. Vinod Chandran, J. --------------------------------- W.P(C) No.9159 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 2015-16 and 2016-17. Exhibit P3 and P7 appeals and Exhibits P4 and P8 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 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) No.9159 of 2020 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER DATED 29.11.2017 ALONG WITH THE COMPUTATION SHEET. EXHIBIT P2OF THE DEMAND NOTICE DATED 29.11.2017. EXHIBIT P3OF THE APPEAL DATED 22.1.2018. EXHIBIT P4OF THE STAY PETITION DATED 31.5.2018. EXHIBIT P5OF THE ASSESSMENT ORDER DATED 27.12.2018 ALONG WITH THE COMPUTATION SHEET. EXHIBIT P6OF THE DEMAND NOTICE DATED 27.12.2018. EXHIBIT P7OF THE APPEAL DATED 24.01.2019. EXHIBIT P8OF THE STAY PETITION DATED 18.6.2019. EXHIBIT P9OF THE JUDGMENT DATED 1.7.2019 IN W.A.NO.1536 OF 2019. []

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