VELLOOR SERVICE CO-OPERATIVE BANK LIMITED vs. THE COMMISSIONER OF INCOME TAX (APPEALS)
What did the High Court hold?
The High Court of Kerala held that if the Income Tax Officer proceeds with coercive steps while a statutory appeal is pending, the statutory remedy available to the assessee would be negated, and the assessee would likely be put to difficulties. Therefore, the Court disposed of the writ petition by directing the respondents not to proceed with coercive steps against the petitioner pending the disposal of the appeal filed before the Commissioner of Income Tax (Appeals). The Court further directed the Commissioner of Income Tax (Appeals) to consider and dispose of the appeal within a period of six months. The specific disallowance under Section 80-P and the quantum of tax demand were not decided on merits by the High Court.
What were the facts?
The petitioner, Velloor Service Co-operative Bank Limited, is an income tax assessee. For the assessment year 2017-18, the Income Tax Officer (ITO), Ward 5, Kottayam, disallowed the bank's claim for deduction under Section 80-P of the Income Tax Act, demanding ₹30,53,573/- as tax. The petitioner filed an appeal against this order before the Commissioner of Income Tax (Appeals). While the appeal was pending, the ITO initiated coercive proceedings against the petitioner. The petitioner 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 can initiate coercive proceedings against an assessee while a statutory appeal against the assessment order is pending before the Commissioner of Income Tax (Appeals)? (Question of law and procedure) Assessee's Contention: The petitioner argued that initiating coercive steps pending a statutory appeal would negate the available remedy and cause significant difficulties. The petitioner relied on the principle that statutory remedies should not be rendered nugatory. Revenue's Contention: The revenue did not record any specific arguments against the petitioner's plea regarding coercive steps pending appeal. The Standing Counsel for Income Tax appeared and took notice for the respondents.
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
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 2017-'
By Ext.P1, the 2nd respondent disallowed petitioner's claim for deduction under Section 80-P of the Income Tax Act and demanded ₹30,53,573/- 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
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