THE MITHIRMALA SERVICE CO-OPERATIVE BANK LTD.NO.2452 vs. THE INCOME TAX OFFICER, WARD-2 (3)

WP(C)/8686/2020HC KeralaKLHC01022420202024 April 2020Author: HONOURABLE MR.JUSTICE N.NAGARESH4 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court of Kerala held that proceeding with coercive steps pending consideration of a statutory appeal would negate the statutory remedy available to the petitioner and likely cause them difficulties. Consequently, the Court disposed of the writ petition by directing the respondents not to proceed with any coercive steps against the petitioner until the disposal of their appeal (Ext.P3) before the second respondent. The Court further directed the second respondent (CIT(A)) to consider and dispose of the appeal within a period of six months. Importantly, the Court stipulated that the disposal should be without insisting on the payment of 20% of the demanded tax, which is a common pre-condition for stay of demand in appeals.

What were the facts?

The petitioner, The Mithirmala Service Co-operative Bank Ltd., is an income tax assessee for the assessment year 2017-18. The Income Tax Officer (ITO), the first respondent, disallowed the petitioner's claim for deduction under Section 80-P of the Income Tax Act, demanding ₹2,07,33,884/- as tax. The petitioner filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) (CIT(A)), the second respondent, challenging the ITO's reasoning. While the appeal was pending, the ITO initiated coercive proceedings against the petitioner. This writ petition was filed before the High Court of Kerala seeking to prevent these coercive steps.

What were the issues?

1. Whether the initiation of coercive proceedings by the Income Tax Officer pending a statutory appeal before the Commissioner of Income Tax (Appeals) negates the statutory remedy available to the assessee? Assessee's Contention: The petitioner argued that the initiation of coercive steps by the first respondent while their statutory appeal was pending before the second respondent would render the appeal process futile and cause them undue hardship. They relied on the principle that statutory remedies should not be undermined by premature enforcement actions. Revenue's Contention: The revenue, represented by the Standing Counsel, took notice of the writ petition. No specific arguments were recorded in the judgment regarding their stance on the coercive steps or the appeal process.

Which sections of the Income-tax Act were involved?

Section 80-P

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 N.NAGARESH FRIDAY, THE 24TH DAY OF APRIL 2020 / 4TH VAISAKHA, 1942 WP(C) NO. 8686 OF 2020 Petitioner:- The Mithirmala Service Co-operative Bank Ltd. No.2452, Represented by its Secretary, Mithirmala P.O., Thiruvananthapuram District-695 610. By Advs. Sri. T.R.Harikumar Sri. Arjun Raghavan Respondents :- 1. The Income Tax Officer, Ward-2 (3), Office of the Income Tax Officer, Aayakar Bhavan, Kowdiar P.O, Thiruvananthapuram District-695 003. 2. The Commissioner of Income Tax (Appeals) Aayakar Bhavan, Kowdiar, Thiruvananthapuram-695 003. 3. The General Manager, Thiruvananthapuram District Co-operative Bank, Head Office, East Fort, Thiruvananthapuram-Pin-695 001. By Standing Counsel Sri. Christopher Abraham, Income Tax This writ petition having come up for admission on 24.04.2020, the court on the same day passed the following: WPC.8686/2020 : 2 :

JUDGMENT ~ ~ ~ ~ ~ ~ Dated this the 24th day of April, 2020 Standing Counsel for Income Tax takes notice for respondents 1 to 3. 2. Petitioner is an income tax assessee. The assessment year in question is 2017-'

18.

By Ext.P1, the 1st respondent disallowed petitioner's claim for deduction under Section 80-P of the Income Tax Act and demanded ₹2,07,33,884/- as tax. The petitioner filed Ext.P3 appeal contending that reasoning given in Ext.P1 is untenable. Pending the appeal, the 1st respondent initiated coercive proceedings.

Heard learned counsel for the petitioner and learned Standing Counsel for Income Tax.

If the respondents proceed with coercive steps pending consideration of statutory appeal, the statutory : 3 : remedy available to the petitioner will be negated and the petitioner is likely to be put to difficulties. In the circumstances, the writ petition is disposed of directing the respondents not to proceed with coercive steps against the petitioner pending disposal of Ext.P3 appeal. Ext.P3 appeal shall be considered and disposed of by the 2nd respondent within a period of six months, without insisting on payment of 20% of the demanded tax. N. NAGARESH, JUDGE aks/24.04.2020 : 4 :

Appendix — schedule of exhibits

Appendix Petitioner’s Exhibits: Exhibit-P1 A true copy of the assessment order for the year 2017-2018 dated 12-12-2019. Exhibit-P2 A true copy of the notice issued under Section 156 of the Income Tax Act dated 12-12-2019. Exhibit-P3 A true copy of the online appeal dated 10-01-2020, filed against Ext-P1 assessment order, before the 2nd respondent. Exhibit-P4 A true copy of the stay petition filed by the petitioner in Ext-P3 appeal dated 20-01-2020. Exhibit-P5 A true copy of the judgment dated 19-07-2019 in W.A No.1639 of 2019. Exhibit-P6 A true copy of the judgment dated 17-02-2020 in WP(C) No.4433 of 2020.

Recent GST High Court judgments

Search GST case law →