KAYAMKULAM CO-OPERATIVE BANK LTD.NO.A 421 vs. INCOME TAX OFFICER

WP(C)/7690/2020HC KeralaKLHC01020230202012 March 2020Author: HONOURABLE MR.JUSTICE V.G.ARUN4 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court disposed of the writ petition by directing the 2nd respondent, the Commissioner of Income Tax (Appeals), to consider and decide the appeal (Exhibit P3) within a period of three months from the date of receipt of a copy of the judgment. The Court further directed that all recovery proceedings pursuant to the letter of demand (Exhibit P4) and the garnishee notice (Exhibit P5) shall be kept in abeyance until the appeal is finally disposed of. Consequently, the Court ordered the first respondent, the Income Tax Officer, to de-freeze the petitioner's bank account and permit banking operations until the appeal is finally decided. The principle established is that in circumstances similar to the cited Division Bench judgment, appeals should be disposed of expeditiously, and recovery proceedings should be stayed pending such disposal, with bank accounts being unfrozen to allow normal operations.

What were the facts?

The petitioner, Kayamkulam Co-operative Bank Ltd., filed a writ petition seeking expeditious disposal of its appeal (Exhibit P3) before the Commissioner of Income Tax (Appeals) and a stay on recovery proceedings initiated via a garnishee notice (Exhibit P5). The petitioner's bank account had been frozen due to these proceedings. The petitioner relied on a Division Bench judgment of the Kerala High Court in W.A.No.1536/2019 and connected cases, which directed disposal of appeals filed by Primary Agricultural Credit Societies without insisting on the payment of 20% of the assessed tax. The respondents are the Income Tax Officer and the Commissioner of Income Tax (Appeals). The assessment years are not specified.

What were the issues?

1. Whether the petitioner is entitled to an expeditious disposal of its appeal filed before the Commissioner of Income Tax (Appeals)? (Question of law and fact, concerning procedural fairness and timely adjudication). 2. Whether recovery proceedings initiated by the revenue should be kept in abeyance pending the disposal of the petitioner's appeal? Assessee's Contentions: The petitioner argued for expeditious disposal of its appeal, citing the Division Bench judgment in W.A.No.1536/2019 and connected cases. This judgment directed the disposal of appeals by Primary Agricultural Credit Societies without insisting on the payment of 20% of the assessed tax. The petitioner also sought to keep recovery proceedings in abeyance until the appeal was heard and decided. Revenue's Contentions: The judgment records no specific contentions from the revenue regarding the issues raised by the petitioner.

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Heard together (2 matters)

WP(C).No.7690 OF 2020

W.A.No.1536/2019

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN THURSDAY, THE 12TH DAY OF MARCH 2020 / 22ND PHALGUNA, 1941 WP(C).No.7690 OF 2020(I) PETITIONER: KAYAMKULAM CO-OPERATIVE BANK LTD.NO.A 421, KRISHNAPURAM P.O, KAYAMKULAM, PIN 690 533, REPRESENTED BY ITS SECRETARY. BY ADVS. SRI.C.A.JOJO SHRI.ARUN B. RESPONDENTS: 1 INCOME TAX OFFICER, WARD-5, ALAPPUZHA, A N PURAM P.O, ALAPPUZHA 688 011. 2 COMMISSIONER OF INCOME TAX (APPEALS), OFFICE OF THE COMMISSIOENR OF INCOME TAX, PUBLIC LIBRARY BUILDING, KOTTAYAM TOWN P.O 686 002. 3 THE BRANCH MANAGER, ALAPPUZHA DISTRICT CENTRAL CO-OPERATIVE BANK, KAYAMKULAM MAIN BRANCH, KAYAMKULAM P.O, PIN-690 106. R1-2 BY SC JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.7690 OF 2020 2 JUDGMENT Dated this the 12th day of March 2020 The prayer in the writ petition is for an expeditious disposal of Exhibit P3-appeal and to keep the recovery proceedings which has been initiated through Exhibit P5-garnishee notice in abeyance, till the appeal is finally heard and disposed of. 2. The petitioner refers to a judgment of the Division Bench of this Court in W.A.No.1536/2019 and connected cases, wherein the Division Bench had directed disposal of the appeals filed by the Primary Agricultural Credit Societies without insisting for payment of 20% of the tax assessed. 3. Following the Division Bench judgment, I am inclined to dispose of this writ petition directing the 2nd respondent to consider and decide on Exhibit P3-appeal within a period of three months from the date of receipt of a copy WP(C).No.7690 OF 2020 3

of this judgment.

In the meanwhile, further proceedings pursuant to Exhibit P4-letter of demand and Exhibit P5-garnishee notice shall be kept in abeyance.

The learned counsel for the petitioner submits that pursuant to Exhibit P5, the account of the petitioner has already been frozen by the department.

In the nature of the directions issued above, the first respondent is directed to de-freeze the account of the petitioner and to permit banking operations till the appeal is finally disposed. The writ petition is disposed as above. V.G.ARUN JUDGE SSK/13/3

WP(C).No.7690 OF 2020 4 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 AOF THE ASSESSMENT ORDER FOR AY 2017-18 DATED 23-12-2019 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P2 AOF THE DEMAND NOTICE U/S 156 DATED 23-12-2019 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P3 AOF THE APPEAL FOR AY 2017-18 BEFORE THE 2ND RESPONDENT DATED 30-12-2019. EXHIBIT P4 AOF THE LETTER OF DEMAND FOR 20% OF TAX DATED 03-02-2020 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P5 AOF THE NOTICE U/S. 226(3) OF THE INCOME TAX ACT FOR ATTACHMENT OF BANK ACCOUNT

DATED

06-03-2020

FOR RS. 1,42,30,987/- ISSUED BY THE FIRST RESPONDENT. RESPONDENT'S EXHIBITS:NIL SSK //// PA TO JUDGE

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