THE KERALA STATE CO-OPERATIVE BANK, vs. COMMISSIONER OF INCOME TAX,

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WP(C)/7026/2020HC KeralaKLHC01018636202009 March 2020Author: HONOURABLE MR. JUSTICE AMIT RAWAL3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, without expressing any opinion on the merits of the matter, directed the Commissioner of Income Tax (Appeals-2) to decide the appeal and the stay application in accordance with law. This decision is to be made after affording an opportunity of hearing to the petitioner, within a period of 30 days from the date of receipt of a copy of the order. The Court also ordered that recovery proceedings pursuant to the demand notice shall be kept in abeyance until the disposal of the stay application. It was clarified that this interim stay is only till the disposal of the interim application and not beyond. The core principle established is that the appellate authority must consider the stay application expeditiously and fairly, and recovery can be deferred pending this decision.

What were the facts?

The petitioner, The Kerala State Co-operative Bank (erstwhile Idukki District Co-operative Bank Ltd), filed a writ petition before the High Court of Kerala. The petitioner sought a direction for the Commissioner of Income Tax (Appeals) to dispose of their appeal without insisting on a deposit as a pre-condition for a stay of demand. The demand arose from an assessment order passed by the Assistant Commissioner of Income Tax. The appeal and stay application were pending before the Commissioner of Income Tax (Appeals-2). The assessment year(s) are not specified in the judgment.

What were the issues?

1. Whether the Commissioner of Income Tax (Appeals) can insist on a deposit as a pre-condition for granting a stay of demand under Section 220(6) of the Income Tax Act, 1961, when an appeal is pending before them? Assessee's contention: The petitioner argued that the Commissioner of Income Tax (Appeals) should be directed to dispose of their appeal and stay application without insisting on any deposit as a pre-condition for the stay of demand. They relied on the general principle that appeals should be heard on merits and that coercive recovery should be stayed pending appeal. Revenue's contention: The judgment records that the learned counsel for the parties were heard. No specific contentions for the revenue are detailed in the judgment.

Which sections of the Income-tax Act were involved?

Section 220(6)

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 AMIT RAWAL MONDAY, THE 09TH DAY OF MARCH 2020 / 19TH PHALGUNA, 1941 WP(C).No.7026 OF 2020(C) PETITIONER/S: THE KERALA STATE CO-OPERATIVE BANK, ERSTWHILE IDUKKI DISTRICT CO- OPERATIVE BANK LTD), DISTRICT CO-OPERATIVE BANK BUILDING, COLONY P.O. IDUKKI 685 602, REPRESENTED BY ITS GENERAL MANAGER IN CHARGE SMT. PREETHA K. MENON. BY ADVS. SRI.A.KUMAR SRI.P.J.ANILKUMAR SMTG.MINI(1748) SRI.P.S.SREE PRASAD SHRI.JOB ABRAHAM SRI.AJAY V.ANAND RESPONDENT/S: 1 COMMISSIONER OF INCOME TAX, (APPEALS-2), OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS-2) KOCHI 682 018. 2 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1, KAP COMMERCIAL COMPLEX, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, ALUVA RANGE, R.S. ROAD, ALUVA 683 101, KERALA. OTHER PRESENT: SRI CHRISTOPHER ABRAHAM SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.7026 OF 2020(C) 2

JUDGMENT Petitioner has approached this Court seeking a direction to dispose of Ext.P2 appeal preferred before the first respondent/Commissioner of Income Tax (Appeals) without insisting for any deposit as a pre-condition for stay of demand under Ext.P1 assessment order.

2.

Heard the learned counsel for the parties. Without expressing any opinion on the merits of the matter, I dispose of the writ petition with a direction to the Commissioner of Income Tax (Appeals-2) to take a decision on Ext.P2 appeal and stay application Ext.P3 in accordance with law, after affording an opportunity of hearing to the petitioner, within a period of 30 days from the date of receipt of a copy of the order. Till such time, recovery proceedings pursuant to the demand notice shall be kept in abeyance. It is made clear that the interim stay is till the disposal of the interim application and not beyond. AMIT RAWAL sab JUDGE

WP(C).No.7026 OF 2020(C) 3 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER DATED 31/12/2019. EXHIBIT P2OF THE MEMORANDUM OF APPEAL DATED 27.01.2020. EXHIBIT P3OF STAY APPLICATION DATED 04/03/2020. EXHIBIT P4OF THE DEMAND NOTICE DATED 31/12/2019. EXHIBIT P5OF THE COMMUNICATION DATED 04/03/2020 DIRECTING THE PETITIONER TO PERMIT THE AMOUNTS.

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