THE AMBALLUR SERVICE CO-OPERATIVE BANK LTD.NO.503 vs. THE COMMISSIONER OF INCOME TAX (APPEALS),

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WP(C)/7600/2020HC KeralaKLHC01019966202012 March 2020Author: HONOURABLE MR.JUSTICE V.G.ARUN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, considering the nature of the contentions raised and the fact that a Division Bench had previously held the condition of payment of 20% of the tax assessed to be bad in law for similarly situated societies, disposed of the writ petition. The Court directed the Commissioner of Income Tax (Appeals) to consider the petitioner's appeals (Exts.P4 and P9) on their merits without insisting on the remittance of 20% of the demand as stipulated in Ext.P5. The recovery proceedings based on the assessment orders (Exts.P2 and P7) were ordered to be kept in abeyance until the appeals are decided. The Court also directed the Commissioner to endeavor to dispose of the appeals expeditiously. The issue of whether the 20% payment condition is legally sustainable under Section 220(6) was implicitly answered in favor of the assessee by following the Division Bench precedent.

What were the facts?

The petitioner, The Ambullur Service Co-operative Bank Ltd., an assessee, is challenging a condition imposed by the Income Tax Officer (ITO) for granting a stay on demands arising from assessment orders. The condition requires payment of 20% of the disputed demand pending the disposal of appeals filed before the Commissioner of Income Tax (Appeals). The petitioner has filed appeals against assessment orders dated 28.02.2019 and 18.09.2019, which are pending consideration. The petitioner argues that this condition is arbitrary and unsustainable, citing a Division Bench judgment in a similar case.

What were the issues?

1. Whether the condition of payment of 20% of the disputed demand for granting a stay pending appeal is legally sustainable, considering the provisions of Section 220(6) of the Income Tax Act, 1961 and the principles of natural justice? Assessee's Contentions: The petitioner argues that the condition of paying 20% of the demand for stay is arbitrary and unsustainable. They rely on a Division Bench judgment of the Kerala High Court in W.A.No.1529 of 2019, which held a similar condition imposed on similarly situated societies to be bad in law. They contend that the Commissioner of Income Tax (Appeals) should consider their appeals on merits without insisting on this payment. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 220(6)

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C).No.7600 OF 2020
W.A.No.1529 of 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.7600 OF 2020(Y) PETITIONER/S: THE AMBALLUR SERVICE CO-OPERATIVE BANK LTD.NO.503 NO.503, MANNAMPETTA, P.O.VARAKKARA, ALAGAPPANAGAR, THRISSUR-680 302, REPRESENTED BY ITS SECRETARY BY ADV. SRI.P.C.SASIDHARAN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, S.T.NAGAR, THRISSUR-680 001 2 THE INCOME TAX OFFICER, WARD 2 (1), THRISSUR, OFFICE OF THE INCOME TAX OFFICER, THRISSUR-680 001 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.7600 OF 2020 2 JUDGMENT Dated this the 12th day of March 2020 The petitioner, a primary agricultural credit society and an assesse on the files of the 2nd respondent, is aggrieved by the condition of payment of 20% of the demands for grant of stay, pending consideration of Exts.P4 and P9 appeals filed against Exts.P2 and P7 assessment orders. 2. Considering the nature of the contentions raised, and the fact of the condition of payment of 20% of the tax assessed imposed on similarly situated societies being held to be bad by a Division Bench in its judgment in W.A.No.1529 of 2019, this writ petition is disposed of directing consideration of Exts.P4 and P9 appeals on merit, without insisting for remittance of 20% as demanded under Ext.P5. The recovery proceedings based on Exts.P2 and P7 assessment orders shall be kept in abeyance WP(C).No.7600 OF 2020 3 till the appeals are decided. The 1st respondent shall endevour to dispose of the appeals as expeditiously as possible. The writ petition is disposed of accordingly. Sd/- V.G.ARUN JUDGE uu 12.03.2020 WP(C).No.7600 OF 2020 4 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE CERTIFICATE OF REGITRATION ISSUED BY THE JOINT REGISTRAR (GENERAL) THRISSUR DATED 28.5.14 EXHIBIT P2

DATED 5.12.2019 EXHIBIT P3OF THE COMPUTATION SHEET EXHIBIT P4OF THE APPEAL DATED 21.1.2020 EXHIBIT P5OF THE ORDER DATED 4.2.2020 EXHIBIT P6OF THE STAY PETITION DATED 12/2/2020 EXHIBIT P7OF THE ASSESSMENT ORDER DATED 23.12.2019 EXHIBIT P8OF THE COMPUTATION SHEET EXHIBIT P9OF THE APPEAL DATED 21.1.2020 EXHIBIT P10OF THE ORDER DATED 4.2.2020 EXHIBIT P11OF THE STAY PETITION DATED 12.2.2020 EXHIBIT P12OF THE NOTICE DATED 6.3.2020 EXHIBIT P13OF THE JUDGMENT DATED 1.7.2019

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