VAIPUR SERVICE O-OPERATIVE BANK LTD.NO.A-203 vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/9293/2020HC KeralaKLHC01023591202023 March 2020Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that a blanket stay of recovery should be granted until the appeal is disposed of. The Court set aside the conditional stay order (Exhibit P5) issued by the first appellate authority, which required payment of 10% of the demand. The reasoning was based on the facts and circumstances of the case, implying that the pending appeal warranted a complete cessation of recovery efforts. The Court explicitly stated that the writ petition was disposed of with this direction, without making any observations on the merits of the matter. The ratio decidendi is that in cases where an appeal is pending and the issue is complex (as indicated by reference to a Full Bench decision), a complete stay of recovery is warranted to prevent prejudice to the assessee.

What were the facts?

The petitioner, Vaipur Service Co-operative Bank Ltd., filed a writ petition challenging recovery proceedings initiated while its appeal was pending before the first appellate authority. The dispute pertains to the assessment year 2017-18 and concerns the coverage of the petitioner under Section 80P of the Income Tax Act, 1961. The first appellate authority had granted a conditional stay, requiring payment of 10% of the demand amount. The petitioner sought a complete stay of recovery until the appeal was disposed of.

What were the issues?

1. Whether the recovery proceedings initiated against the petitioner are valid when an appeal is pending before the first appellate authority, particularly concerning the applicability of Section 80P of the Income Tax Act, 1961? (Question of law and fact) The assessee contended that recovery should be stayed pending the disposal of their appeal. The revenue's contentions are not explicitly recorded in the judgment. The issue hinges on the interpretation and application of Section 80P in light of the Full Bench decision in Mavilayil Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 (FB)].

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.9293 OF 2020 PETITIONER/S: VAIPUR SERVICE CO-OPERATIVE BANK LTD.NO.A-203 VAIPUR, PATHANAMTHITTA-689588, REPRESENTED BY ITS SECRETARY MUHAMMED ISMAIL. 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-110001, REPRESENTED BY ITS CHAIRMAN. 2 INCOME TAX OFFICER, WARD 4, THIRUVALLA, INCOME TAX DEPARTMENT, OFFICE OF ADDITIONAL CIT, THIRUVALLA RANGE, T.K.ROAD, THIRUVALLA-689101. 3 COMMISSIONER OF INCOME TAX (APPEALS), KOTTAYAM, AAYAKAR BHAVAN, PUBLIC LIBRARY BUILDING, LAL BAHADUR SASTRI ROAD, KOTTAYAM-686001. 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).9293 of 2020 - 2 - K. Vinod Chandran, J. ---------------------------- W.P(C) No.9293 of 2020 ---------------------------- Dated this the 23rd day of March, 2020

JUDGMENT The writ petition is against the recovery initiated while appeal is 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 year 2017-18. Exhibit P2 appeal is pending before the first appellate authority. By Exhibit P5, the first appellate authority granted conditional stay, of payment of 10% of the demand amount. Considering the facts and circumstances of the case, I am of the opinion that there shall be a blanket stay of recovery till the appeal is disposed of. Hence, Exhibit P5 is set aside. 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).9293 of 2020 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER NO.ITBA/AST/S/143(3)/2019-20/1022975838(1) DATED 24.12.2019 ISSUED FOR THE YEAR 2017- 18 BY THE 2ND RESPONDENT. EXHIBIT P2OF THE APPEAL AND GROUNDS DATED 27.01.2020 FILED BEFORE THE 3RD RESPONDENT FOR THE ASSESSMENT YEAR 2017-18. EXHIBIT P3OF THE DEMAND NOTICE NO.ITBA/COM/F/17/2019-20/1025134498(1) DATED 13.2.2020 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT. EXHIBIT P4OF THE STAY APPLICATION FILED ON 27.1.2020 BEFORE THE 3RD RESPONDENT IN EXT. P2 APPEAL. EXHIBIT P5OF THE ORDER NO.ITA NO.10491/CIT(A)/KTM/2019-20 DATED 9.3.2020 ISSUED FOR THE YEAR 2017-18 BY THE 3RD RESPONDENT. []

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