IRINAVE SERVICE CO OPERATIVE BANK LTD.NO.L.L.116, vs. THE CENTRAL BOARD OF DIRECT TAXES,

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WP(C)/9328/2020HC KeralaKLHC01023727202023 March 2020Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN3 pages
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What did the High Court hold?

The High Court held that recovery proceedings should be stayed until the appeals are disposed of by the first appellate authority. The Court acknowledged that the issue regarding the coverage of the petitioner under Section 80P of the Income Tax Act, 1961, needs to be adjudicated based on the Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)]. The Court explicitly stated that the writ petition was disposed of with the direction to stay recovery, without making any observations on the merits of the matter. The operative direction was to grant a stay of recovery pending the disposal of the appeal.

What were the facts?

The petitioner, Irinave Service Co-operative Bank Ltd., filed a writ petition challenging the recovery proceedings initiated by the Income Tax Department. The dispute pertains to the coverage of the petitioner under Section 80P of the Income Tax Act, 1961, for assessment years 2013-14, 2015-16, and 2017-18. Appeals and stay petitions were pending before the first appellate authority. The petitioner sought a stay on recovery until the appeals were disposed of. The respondents are the Central Board of Direct Taxes, the Income Tax Officer, Ward 1 and TPS, Kannur, and the Commissioner of Income Tax (Appeals), Kozhikode.

What were the issues?

1. Whether recovery proceedings can be initiated while appeals are pending before the first appellate authority, particularly concerning the eligibility for deduction under Section 80P of the Income Tax Act, 1961? (Question of law and fact) Assessee's Contention: The assessee argued that recovery should be stayed as appeals and stay petitions were pending before the first appellate authority. The core issue revolves around the applicability of Section 80P, which requires adjudication based on the Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)]. Revenue's Contention: The judgment does not record any specific arguments made by the revenue regarding the stay of recovery or the merits of the Section 80P issue.

Which sections of the Income-tax Act were involved?

Section 80P

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 K.VINOD CHANDRAN MONDAY, THE 23RD DAY OF MARCH 2020 / 3RD CHAITHRA, 1942 WP(C).No.9328 OF 2020 PETITIONER/S: IRINAVE SERVICE CO OPERATIVE BANK LTD.NO.L.L.116, IRINAVE P.O., KANNUR - 670301, REPRESENTED BY ITS SECRETARY IN CHARGE K.RAJEEVAN. BY ADVS. DR.K.P.PRADEEP SMT.T.THASMI RESPONDENT/S: 1 THE CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI - 110 001, REPRESENTED BY ITS CHAIRMAN. 2 INCOME TAX OFFICER, WARD 1 AND TPS, KANNUR, AAYAKAR BHAVAN, OFFICE OF ADDITIONAL/JOINT CIT, KONNOTHUMCHAL, CHOVVA P.O., KANNUR - 670006. 3 COMMISSIONER OF INCOME TAX (APPEALS), KOZHIKODE, AAYAKAR BHAVAN, INCOME TAX OFFICE, MANANCHIRA, KOZHIKODE - 673 001. OTHER PRESENT: R1 TO R3 BY SRI.JOSE JOSEPH, SC, IT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) No.9328 of 2020 - 2 - K. Vinod Chandran, J. --------------------------------- W.P(C) No.9328 of 2020 --------------------------------- Dated this the 23rd day of March, 2020

JUDGMENT The writ petition is against the recovery initiated while appeals are pending. The issue is also with respect to the coverage of the petitioner under Section 80P of the Income Tax Act, 1961, which has to be adjudicated on the basis of the Full Bench decision in Mavilayil Service Co

- operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)].

2.

In the present case, the demand is with respect to assessment years 2013-14, 2015-16 and 2017-18. Exhibit P2 P2(a) and P2(b) appeals and Exhibit P4 stay petition are pending before the first appellate authority. In the circumstance of the case, I am of the opinion that there shall be a stay of recovery till the appeal is disposed of. The writ petition is disposed of with the above direction, without any observation on the merits of the matter. K.VINOD CHANDRAN JUDGE Vku/-

WP(C) No.9328 of 2020 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER NO.AABAT3987B DATED 25/01/2016 ISSUED FOR THE YEAR 2013-14 BY THE 2ND RESPONDENT. EXHIBIT P1(A)OF THE ASSESSMENT ORDER NO.AABAT3987B DATED 19/12/2017 ISSUED FOR THE YEAR 2015-16 BY THE 2ND RESPONDENT. EXHIBIT P1(B)OF THE ASSESSMENT ORDER NO.AABAT3987B DATED 12/12/2019 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT. EXHIBIT P2OF THE APPEAL DATED 03/03/2016 FILED BEFORE THE 3RD RESPONDENT FOR THE ASSESSMENT YEAR 2013-14. EXHIBIT P2(A)OF THE APPEAL DATED 24/01/2018 FILED BEFORE THE 3RD RESPONDENT FOR THE ASSESSMENT YEAR 2015-16. EXHIBIT P2(B)OF THE APPEAL DATED 17/01/2020 FILED BEFORE THE 3RD RESPONDENT FOR THE ASSESSMENT YEAR 2017-18. EXHIBIT P3OF THE DEMAND NOTICE NO.PAN AABAT3987B/2013-14 DATED 25/01/2016 FOR THE YEAR 2013-14 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P3(A)OF THE DEMAND NOTICE NO.PAN AABAT3987B/2015-16 DATED 19/12/2017 FOR THE YEAR 2015-16 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P3(B)OF THE DEMAND NOTICE NO.PAN AABAT3987B/2017-18 DATED 12/12/2019 FOR THE YEAR 2017-18 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P4OF THE STAY APPLICATION FILED ON 14/03/2020 BEFORE THE 3RD RESPONDENT IN EXT.P2 SERIES OF APPEAL. []

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