KANNUR BUILDING MATERIALS MARKETING CO-OPERATIVE SOCIETY LTD. NO C-1741, vs. THE INCOME TAX OFFICER,

WP(C)/7648/2020HC KeralaKLHC01019927202012 March 2020Author: HONOURABLE MR.JUSTICE V.G.ARUN4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, considering a Division Bench's decision in W.A No.1536 of 2019, held that the insistence on the payment of 20% of the tax assessed against co-operative societies as a condition for the consideration of appeals is unsustainable. The Court noted that the correctness of this insistence had been previously examined and found to be bad. Therefore, in light of the limited relief sought by the petitioner, the writ petition was disposed of. The Court directed the second respondent (Commissioner of Income Tax (Appeals)) to decide the appeals (Exts.P3, P6, and P9) in accordance with law within three months of receiving a copy of the judgment, after providing the petitioner an opportunity of hearing. Crucially, recovery proceedings pursuant to the assessment orders (Exts.P1, P4, and P7) were ordered to be kept in abeyance until a decision on the appeals is taken.

What were the facts?

The petitioner, Kannur Building Materials Marketing Co-operative Society Ltd., filed a writ petition before the High Court of Kerala. The petitioner is aggrieved by the demand for payment of 20% of the assessed tax as a condition for the consideration of their appeals filed against assessment orders (Exts.P1, P4, and P7). These appeals (Exts.P3, P6, and P9) were preferred before the Commissioner of Income Tax (Appeals), the second respondent. The petitioner's grievance is that the recovery officer is insisting on this pre-deposit before the appeals are heard and decided. The writ petition seeks a direction to the appellate authority to consider the appeals without such a pre-condition.

What were the issues?

1. Whether the insistence of payment of 20% of the tax assessed against co-operative societies, pending consideration of appeals against assessment orders, is legally sustainable? Assessee's Contention: The petitioner, a co-operative society, argues that the demand for a 20% pre-deposit of the assessed tax as a condition for appeal consideration is improper and seeks to have their appeals heard on merits. The petitioner relies on the principle that appeals should be considered without such stringent pre-conditions, especially when the merits are yet to be decided. Revenue's Contention: The revenue, represented by the Income Tax Department, through its standing counsel, was heard. The judgment does not explicitly detail the revenue's specific arguments but acknowledges their presence and participation in the proceedings. However, the court's decision indicates that the revenue's insistence on the pre-deposit was challenged.

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C).No.7648 OF 2020

W.A No.1536 of 2019

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN THURSDAY, THE 12TH DAY OF MARCH 2020 / 22ND PHALGUNA, 1941 WP(C).No.7648 OF 2020(E) PETITIONER/S: KANNUR BUILDING MATERIALS MARKETING CO-OPERATIVE SOCIETY LTD. NO C-1741, REPRESENTED BY ITS SECRETARY, PAPPINISSERY P.O., KANNUR DISTRICT - 670 561. BY ADVS. SRI.C.A.JOJO SRI.MATHEWS JOSEPH RESPONDENT/S: 1 THE INCOME TAX OFFICER, CIRCLE-1, KANNUR RANGE, AAYAKAAR BHAVAN, KANNOTHUMCHAL, CHOVA P.O., PIN - 670 006. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS), MANANCHIRA P.O., KOZHIKODE, PIN - 673 001. BY SC CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.7648 OF 2020 2 JUDGMENT Dated this the 12th day of March 2020 As against Exts.P1, P4 and P7 assessment orders, the petitioner, a co-operative society, has preferred Exts.P3, P6 and P9 appeals before the 2nd respondent. The grievance of the petitioner is that the recovery officer is demanding payment of 20% of the tax assessed as a condition for consideration of the appeal. 2. I have heard learned standing counsel for the Income Tax department also. 3. The correctness of the insistance of payment of 20% of the tax assessed against co-operative societies, pending consideration of appeals against the assessment orders was considered by a Division Bench in W.A No.1536 of 2019, and the insistance was held to be bad. Therefore, considering the limited nature of the relief sought, the writ petition is disposed of directing the 2nd WP(C).No.7648 OF 2020 3 respondent to take a decision on Exts.P3, P6 and P9 appeals in accordance with law, after affording an opportunity of hearing to the petitioner within a period of three months from the date of receipt of a copy of this judgment. Till a decision is taken on the appeals, recovery proceedings pursuant to Exts.P1, P4 and P7 assessment orders shall be kept in abeyance. The writ petition is disposed of accordingly. Sd/- V.G.ARUN JUDGE uu 13.03.2020 WP(C).No.7648 OF 2020 4 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1

AOF THE ASSESSMENT ORDER 2015-16 DATED 21/12/2017 WITH DEMAND NOTICE ISSUED BY THE FIRST RESPONDENT. EXHIBIT P2 AOF THE DEMAND NOTICE ISSUED BY THE FIRST RESPONDENT 21/12/2017. EXHIBIT P3 AOF THE APPEAL BEFORE THE 2ND RESPONDENT FOR DATED 21/01/2018. EXHIBIT P4 AOF THE ASSESSMENT ORDER DATED 27/12/2018 FOR AY 2016-17 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P5 AOF THE DEMAND NOTICE ISSUED BY THE FIRST RESPONDENT 27/12/2018. EXHIBIT P6 AOF THE APPEAL BEFORE THE 2ND RESPONDENT FOR AY 2016-17 DATED 26/01/2019. EXHIBIT P7 AOF THE ASSESSMENT ORDER DATED 25/11/2019 FOR AY 2017-18 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P8 AOF THE DEMAND NOTICE ISSUED BY THE FIRST RESPONDENT 25/11/2019. EXHIBIT P9 AOF THE APPEAL BEFORE THE 2ND RESPONDENT FOR AY 2017-18 DATED 30/12/2019. EXHIBIT P10 AOF THE ORDER DATED 25/02/2020 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P11 AOF THE NOTICE OF DEMAND FOR 20% DATED 03/03/2020 ISSUED BY THE FIRST RESPONDENT.

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