THE VAMANAPURAM SERVICE CO-OPERATIVE BANK LTD NO. 927 vs. THE INCOME TAX OFFICER

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WP(C)/31625/2019HC KeralaKLHC01082731201922 November 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while not deciding the merits of the appeal concerning the disallowance of deduction under Section 80P, disposed of the writ petition by directing the Income Tax Appellate Tribunal (3rd respondent) to consider and pass orders on the petitioner's appeal (Ext.P4) within an outer time limit of six months. Crucially, the Court ordered that recovery steps for the amounts confirmed against the petitioner shall be kept in abeyance until such time as orders are passed by the Tribunal and communicated to the petitioner. The ratio decidendi is that in cases where an appeal and stay petition are pending before the Tribunal, and recovery is being pursued aggressively, the Tribunal should be directed to expedite the disposal of the appeal and stay the recovery pending its decision. The operative direction is to stay recovery and expedite the appeal process.

What were the facts?

The petitioner, The Vamanapuram Service Co-operative Bank Ltd, has filed a writ petition challenging a rectified order under the Income Tax Act. The petitioner has preferred an appeal (Ext.P4) along with a stay petition (Ext.P5) before the Income Tax Appellate Tribunal (3rd respondent). The petitioner contends that recovery steps are being initiated by the respondents for the amounts confirmed by the rectified order, even before the stay petition is considered. The core issue in the appeal relates to the disallowance of a deduction claimed under Section 80P of the Income Tax Act. The assessment year(s) are not explicitly stated.

What were the issues?

1. Whether the recovery steps for the disputed amounts can be initiated by the respondents prior to the consideration of the stay petition by the Appellate Tribunal, when an appeal against the order is pending? Assessee's Contention: The petitioner argues that recovery steps are being taken prematurely, even before the stay petition is adjudicated by the Tribunal. They rely on the pendency of their appeal and stay petition as grounds to halt recovery proceedings. Revenue's Contention: The judgment does not record any specific contentions made by the revenue regarding the premature recovery steps. The revenue's stance is implicitly represented by their actions of initiating recovery.

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 A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 22ND DAY OF NOVEMBER 2019 / 1ST AGRAHAYANA, 1941 WP(C).No.31625 OF 2019(C) PETITIONER/S: THE VAMANAPURAM SERVICE CO-OPERATIVE BANK LTD NO. 927 REPRESENTED BY ITS SECRETARY, VAMANAPURAM P O, THIRUVANANTHAPURAM DISTRICT-695606. BY ADVS. SRI.ADITHYA RAJEEV SRI.ARJUN RAGHAVAN RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD -2(3), OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, KAWDIAR P O, THIRUVANANTHAPUAM, PIN-695003. 2 THE COMMISSIONER OF INCOME TAX(APPEALS) AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM PIN-695003. 3 THE REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, KENDRIYA BHAVAN, BLOCK NO.C1 AND C2, 1ST FLOOR, KAKKANAD, COCHIN-682030. SRI.CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.31625 OF 2019(C) 2

JUDGMENT Against Ext.P3 rectified order under the Income Tax Act, the petitioner has preferred Ext.P4 appeal together with Ext.P5 stay petition before the 3rd respondent. It is the case of the petitioner that even prior to considering the stay petition, recovery steps are taken by the respondents against the petitioner for recovery of the amounts confirmed by Ext.P3 rectified order. It is stated by the learned counsel for the petitioner that the issue involved in the appeal pertains to dis-allowance of deduction claimed under Section 80P of the Income Tax Act.

2.

I have heard the learned counsel appearing for the petitioner and also the learned Standing Counsel appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar and taking note of the fact that in similar matters, this Court has directed the Appellate Authority to consider and pass orders in the appeal and stayed the recovery of disputed amounts pending disposal of the appeal, this Writ petition is disposed directing the 3rd respondent to consider and pass orders on Ext.P4 appeal within an outer time limit of six months. Recovery steps for recovery of amounts confirmed against the petitioner shall be kept in abeyance till such time as orders are passed by the 3rd respondent as directed above and communicated to the petitioner. The petitioner shall produce a copy of this judgment together with a copy of the writ petition before the 3rd respondent for further action. A.K.JAYASANKARAN NAMBIAR

JUDGE

WP(C).No.31625 OF 2019(C) 3

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2015-2016 DATED 24.11.2017. EXHIBIT P2 A TRUE COPY OF THE ORDER DATED 12.07.2018 IN ITA NO.105/EF/TVM/CIT(A)/TVM/2017-18 OF THE 2ND RESPONDENT. EXHIBIT P3 A TRUE COPY OF THE ORDER DATED 15.01.2019 IN ITA NO.105/EF/TVM.CIT(A)/TVM/2017-18, ISSUED BY THE 2ND RESPONDENT UNDER SECTION 154 OF THE INCOME TAX ACT. EXHIBIT P4 A TRUE COPY OF THE APPEAL MEMORANDUM DATED 11.11.2019 ALONG WITH AFFIDAVIT AND CHELAN. EXHIBIT P5 A TRUE COPY OF THE STAY PETITION FILED ALONG WITH EXTP4 APPEAL DATED 11.11.2019. sd

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