THE ASTHMICHIRA SERVICE CO-OPERATIVE BANK LIMITED NO.325 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

WP(C)/8791/2020HC KeralaKLHC01022662202021 April 2020Author: HONOURABLE MR.JUSTICE N.NAGARESH4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala held that if the Income Tax Officer proceeds with coercive steps pending consideration of a statutory appeal, the statutory remedy available to the assessee will be negated, and the assessee is likely to be put to difficulties. Therefore, the Court disposed of the writ petition by directing the respondents (the Income Tax Officer and the Commissioner of Income Tax (Appeals)) not to proceed with coercive steps against the petitioner pending the disposal of the appeal filed by the petitioner. The Court further directed the Commissioner of Income Tax (Appeals) to consider and dispose of the appeal within a period of six months. The substantive issue of the deduction under Section 80-P was not decided on merits.

What were the facts?

The petitioner, Asthmichira Service Co-operative Bank Limited, is an income tax assessee. For the assessment year 2013-14, the Income Tax Officer (ITO), Ward 2(1), Thrissur, disallowed the bank's claim for deduction under Section 80-P of the Income Tax Act, demanding ₹36,59,360/- in tax. The petitioner filed an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)), challenging the ITO's reasoning. While the appeal was pending, the ITO initiated coercive proceedings against the petitioner. The petitioner then filed a writ petition before the High Court of Kerala seeking to prevent these coercive steps.

What were the issues?

1. Whether the Income Tax Officer was justified in initiating coercive proceedings against the assessee pending disposal of its statutory appeal before the Commissioner of Income Tax (Appeals)? (Question of law and fact, concerning the procedural fairness and the efficacy of statutory remedies). Assessee's Contention: The petitioner argued that initiating coercive proceedings while a statutory appeal is pending would negate the statutory remedy available to them and cause them significant difficulties. They sought to prevent such actions. Revenue's Contention: The revenue, represented by the Standing Counsel, took notice of the writ petition but no specific arguments were recorded in the judgment regarding the initiation of coercive steps pending appeal.

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 TUESDAY, THE 21ST DAY OF APRIL 2020 / 1ST VAISAKHA, 1942 WP(C) NO. 8791 OF 2020 Petitioner :- The Asthmichira Service Co-operative Bank Limited No. 325, Asthamichira P.O., Astamichira, Thrissur District, Represented by its Secretary. By Adv. Sri. O.D. Sivadas Respondents:- 1. The Commissioner of Income Tax (Appeals), Ayakar Bhavan, Shaktan Nagar, Thrissur Pin 680 001. 2. The Income Tax Officer, Ward 2 (1), Shaktan Nagar, Thrissur Pin 680 001. By Standing Counsel Sri. Christopher Abraham, Income Tax This writ petition having come up for admission on 21.04.2020, the court on the same day delivered the following. WPC.8791/2020 : 2 :

J U D G M E N T ~ ~ ~ ~ ~ ~ ~ ~ ~ Dated this the 21st day of April, 2020 Standing Counsel for Income Tax takes notice for respondents 1 and 2. 2. Petitioner is an income tax assessee. The assessment year in question is 2013-'

14.

By Ext.P1, the 2nd respondent disallowed petitioner's claim for deduction under Section 80-P of the Income Tax Act and demanded ₹36,59,360/- as tax. The petitioner filed Ext.P2 appeal contending that reasoning given in Ext.P1 is untenable. Pending the appeal, the 2nd respondent initiated coercive proceedings.

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

If the 2nd respondent proceeds with coercive steps pending consideration of statutory appeal, the : 3 : statutory 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.P2 appeal. Ext.P2 appeal shall be considered and disposed of by the 1st respondent within a period of six months. N. NAGARESH, JUDGE aks/21.04.2020 : 4 :

Appendix — schedule of exhibits

Appendix Exhibit P1 Copy of the assessment order dated 29.12.2016 issued by the 2nd respondent for the period 2013-14 Exhibit P2 Copy of the appeal filed by the petitioner before the 1st respondent for the period 2013-14.

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