THE PULLUR SERVICE CO-OPERATIVE BANK NO. F. 550 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/7922/2020HC KeralaKLHC01020715202013 March 2020Author: HONOURABLE MR.JUSTICE V.G.ARUN5 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the demand for remittance of 20% of the assessed tax pending consideration of the appeals cannot be sustained, in light of the Division Bench judgment in W.A. No. 1529 of 2019 and connected cases, which considered the peculiar aspects and the Full Bench decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut. The Court quashed Ext.P5, the demand for 20% payment. The writ petition was disposed of with a direction to the first respondent (Commissioner of Income Tax (Appeals)) to consider the petitioner's appeal expeditiously. Until the appeal is decided on merits, further recovery proceedings pursuant to the assessment order were to be kept in abeyance. No issue was expressly left undecided.

What were the facts?

The petitioner, The Pullur Service Co-operative Bank, is aggrieved by an assessment order for the assessment year 2017-18. They filed an appeal and a stay petition. Subsequently, a demand was issued for the remittance of 20% of the tax due, which is disputed in the appeal. The petitioner sought an expeditious consideration of their appeal or stay petition and a stay on recovery proceedings, including the demand for 20% of the tax.

What were the issues?

1. Whether the insistence on remittance of 20% of the tax demanded as a condition for granting a stay pending appeal is legally sustainable? Assessee's Contention: The petitioner argued that the demand for 20% of the tax due, as a condition for stay, should be quashed and that recovery proceedings should be stayed until the appeal is decided. They relied on the Division Bench judgment in W.A. No. 1529 of 2019 and connected cases, and the Full Bench decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287]. Revenue's Contention: The learned Standing Counsel for the Income Tax Department was heard.

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 V.G.ARUN FRIDAY, THE 13TH DAY OF MARCH 2020 / 23RD PHALGUNA, 1941 WP(C).No.7922 OF 2020(M) PETITIONER/S: THE PULLUR SERVICE CO-OPERATIVE BANK NO. F. 550 ULLUR, THRISSUR 680 683, 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 680 001 2 THE INCOME TAX OFFICER, WARD 2(4), THRISSUR, OFFICE OF THE INCOME TAX OFFICER, SAKTHANTHAMPOURAN NAGAR, THRISSUR 680 001 OTHER PRESENT: SC JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.7922 of 2020 2 Dated this the 13th day of March, 2020

JUDGMENT The petitioner, a Primary Agricultural Credit Society, is aggrieved by Ext.P1 assessment order for the years 2017-18. The petitioner preferred Ext.P4 appeal along with Ext.P6 stay petition. In the meanwhile Ext.P5 was issued demanding remittance of 20% of the tax due, which is disputed in the appeal. The prayer in the writ petition is for expeditious consideration of either the appeal or the stay petition and to stay the recovery proceedings including the insistence to pay 20% of the amount as demanded under Ext.P5. 2. The issue regarding imposition of the condition of remittance of 20% of the tax demanded was considered and decided by the Division Bench of this Court as per the judgment in W.A.No. 1529 of 2019 and connected cases. After taking note of the peculiar aspects involved and the decision of the Full Bench in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287], the Division Bench held the insistence for payment of proportion of the demand as a condition for grant of stay to be bad.

3.

Heard the learned Standing Counsel for the Income Tax Department also.

4.

In the light of the Division Bench judgment, the demand for remittance of 20% of the tax assessed pending consideration of the appeals, cannot be sustained. Therefore, Ext.P5 is quashed. The writ petition is disposed of, directing the first respondent to consider Ext.P4 appeal filed by the petitioner, as expeditiously as possible. Till the appeal is decided on merits, further proceedings for recovery pursuant to Ext.P1 to be kept in abeyance. V.G.ARUN JUDGE Scl/13.03.2020

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 11/12/2019 EXHIBIT P2 TRUE COPY OF THE COMPUTATION STATEMENT EXHIBIT P3 TRUE COPY OF DEMAND NOTICE DATED 11/12/2019 EXHIBIT P4 TRUE COPY OF THE APPEAL DATED 06/01/2020 EXHIBIT P5 TRUE COPY OF THE ORDER DATED 21/01/2020 EXHIBIT P6 TRUE COPY OF THE STAY PETITION DATED 27/1/2020 EXHIBIT P7 TRUE COPY OF THE JUDGMENT DATED 1/7/2019 IN W.A 1536 OF 2019 W.P.(C) No.7922 of 2020 5

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