THE KUNDARA PANCHAYATH SERVICE CO-OPERATIVE BANK LTD.NO.401 vs. THE INCOME TAX OFFICER

WP(C)/27514/2019HC KeralaKLHC01071419201916 October 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court, while not deciding the merits of the appeal or the stay petition, directed the Income Tax Appellate Tribunal (3rd respondent) to consider and pass reasoned orders on the petitioner's stay petition (Ext.P6) within one month of receiving a copy of the judgment, after hearing the petitioner. Crucially, the Court ordered that recovery steps pursuant to the demand notice (Ext.P7) for the amounts confirmed by the assessment order (Ext.P1) shall be kept in abeyance until such time as the ITAT passes its orders on the stay petition and communicates them to the petitioner. The petitioner was directed to furnish copies of the writ petition and the judgment to the ITAT.

What were the facts?

The petitioner, The Kundara Panchayath Service Co-operative Bank Ltd. No. 401, is challenging an assessment order for the assessment year 2016-2017. The petitioner filed an appeal before the First Appellate Authority, which was dismissed. Subsequently, the petitioner filed a further appeal and a stay petition before the Income Tax Appellate Tribunal (ITAT), Cochin Bench. A demand notice was also issued. The petitioner contends that recovery steps are being taken by the respondents even before the stay petition is considered by the ITAT.

What were the issues?

1. Whether the recovery steps initiated by the respondents are premature, given that a stay petition is pending before the ITAT? (Question of mixed law and fact, concerning the procedural fairness and the Income Tax Act). Assessee's Contention: The petitioner argues that recovery steps are being taken prematurely, prior to the ITAT considering and deciding their stay petition. They rely on the principle that recovery should be deferred until the appeal and stay are adjudicated. Revenue's Contention: The judgment does not record any specific arguments made by the revenue regarding the premature recovery steps. The revenue's counsel appeared, but their contentions on this specific issue are not detailed.

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 WEDNESDAY, THE 16TH DAY OF OCTOBER 2019 / 24TH ASWINA, 1941 WP(C).No.27514 OF 2019(L) PETITIONER: THE KUNDARA PANCHAYATH SERVICE CO-OPERATIVE BANK LTD.NO.401 REPRESENTED BY ITS SECRETARY, KUNDARA P.O. KOLLAM DISTRICT 691 501. BY ADVS. SRI.T.R.HARIKUMAR SRI.ARJUN RAGHAVAN RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-4, OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOLLAM RANGE, AAYAKAR BHAVAN, KARBALA JUNCTION, KOLLAM 691 001. 2 THE COMMIIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM 695 003. 3 THE REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, KENDRIYA BHAVAN, BLOCK NO. C1 AND C2 I ST FLOOR, KAKKANAD, COCHIN 682 030. OTHER PRESENT: GP-SMT. THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16.10.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C) No.27514/19 2

JUDGMENT Against Ext.P1 assessment order for the assessment year 2016-2017 under the Income Tax Act, the petitioner has preferred Ext.P2 appeal before the First Appellate Authority. The said appeal was, however, dismissed by Ext.P4 order. Aggrieved by the same, the petitioner preferred Ext.P5 appeal and Ext.P6 stay petition before the 3rd respondent. Ext.P7 is the demand notice. 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.P1 assessment order.

I have heard Sri.T.R.Harikumar, the learned counsel appearing for the petitioner and Sri.Christopher Abraham, the learned Standing Counsel for the respondents.

On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I dispose the writ petition with the following directions:

The 3rd respondent shall consider and pass reasoned orders on Ext.P6 stay petition within a period of one month from the date of receipt of a copy of this judgment, after hearing the petitioner.

Recovery steps pursuant to Ext.P7 Demand notice for recovery of amounts confirmed against the petitioner by Ext.P1 assessment order 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 the writ petition together with a copy of this judgment, before the 3rd respondent, for further action. A.K.JAYASANKARAN NAMBIAR

JUDGE

okb //// P.S. to Judge

Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE RELEVANT PAGES OF THE ASSESSMENT ORDER FOR THE YEAR 2016-2017 DATED 28.12.2018. EXHIBIT P2 A TRUE COPY OF THE ONLINE APPEAL FILED BEFORE THE 2ND RESPONDENT ON 25.1.2019, AGAINST EXT. P1 ASSESSMENT. ORDER. EXHIBIT P3 A TRUE COPY OF THE JUDGMENT DATED 21.2.2019 IN WPC NO. 5070 OF 2019. EXHIBIT P4 A TRUE COPY OF THE RELEVANT PAGES OF THE ORDER DATED 3.9.2019 IN ITA NO. 495/KLM/CIT (A) /TVM/2018-19 OF THE 2ND RESPONDENT. EXHIBIT P5 A TRUE COPY OF THE APPEAL MEMORANDUM FIELD BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH ALONG WITH AFFIDAVIT AND CHELAN DATED 5.10.2019. EXHIBIT P6 A TRUE COPY OF THE STAY PETITION FILED ALONG WITH EXT. P5 APPEAL. EXHIBIT P7 A TRUE COPY OF THE NOTICE NO. W- 4/KLM/ARREAR DEMAND DATED 1/10/2019 ISSUED BY THE 1ST RESPONDENT.

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