M/S. CHAVAKKAD SERVICE CO-OPERATIVE BANK vs. INCOME TAX OFFICER

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WP(C)/25786/2016HC KeralaKLHC01073210201608 August 2016Author: HONOURABLE MR.JUSTICE A.M.SHAFFIQUE4 pages
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What did the High Court hold?

The High Court did not find any error in the ITO's decision to issue the conditional stay orders (Exts. P7 and P8). The Court acknowledged that there were contrary views taken by the Tribunal regarding the very same issue. Therefore, the Court did not intend to interfere with the orders. However, considering the petitioner's request for more time to remit the amount and for an early hearing of their appeals, the writ petition was disposed of with specific directions. The petitioner was directed to remit the amounts specified in Exts. P7 and P8 within three weeks of receiving the judgment. The second respondent (Commissioner of Income Tax (Appeals)) was directed to endeavour to hear and dispose of the appeals (Exts. P3 and P4) as expeditiously as possible. No specific finding was made on the merits of the tax dispute itself.

What were the facts?

The petitioner, M/s. Chavakkad Service Co-operative Bank Ltd., is challenging orders (Exts. P7 and P8) passed by the Income Tax Officer (ITO) granting stay on condition of remitting 15% of the tax dues. These orders were issued while the petitioner had filed appeals (Exts. P3 and P4) against assessment orders (Exts. P1 and P2) for assessment years 2008-09 and 2013-14. The petitioner had also filed stay petitions before the ITO. The petitioner relies on a prior ITAT order (Ext. P9) in ITA No. 525/COCH/2014, which allegedly decided the issue in their favour. The revenue contends that the issue is pending before the High Court in another appeal.

What were the issues?

1. Whether the High Court should interfere with the conditional stay orders (Exts. P7 and P8) granted by the ITO, which require the petitioner to remit 15% of the tax dues, when the petitioner claims a favourable decision from the ITAT in a similar matter (Ext. P9)? (Question of law and fact) Assessee's Contentions: - The entire interest received by the petitioner Society from other sources should be deducted under Section 80P(2)(a)(i) of the Income Tax Act. - The ITAT, Cochin Bench, in ITA No. 525/2014 (Ext. P9), has already decided this issue in favour of the petitioner, thus there is no reason to demand any payment. - Alternatively, the petitioner seeks early disposal of their pending appeals (Exts. P3 and P4). Revenue's Contentions: - The issue is pending consideration before the High Court in an appeal filed by the assessee in ITA No. 66/2016, relating to Poonjar Service Co-operative Bank Ltd. - Different Tribunals have taken different views, and the matter is yet to be definitively decided by the High Court.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i)

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C).No. 25786 of 2016
ITA NO.525/COCH/2014

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 A.M.SHAFFIQUE MONDAY, THE 8TH DAY OF AUGUST 2016/17TH SRAVANA, 1938 WP(C).No. 25786 of 2016 (W) ---------------------------- PETITIONER(S): ------------- M/S. CHAVAKKAD SERVICE CO-OPERATIVE BANK LTD. BEACH ROAD, P.O.CHAVAKKAD, THRISSUR-680 506, REPRESENTED BY SECRETARY. BY ADVS.SRI.ANIL D. NAIR SRI.R.SREEJITH KUM.SOUMYA PRAKASH KUM.MEKHALA M.BENNY RESPONDENT(S): -------------- 1. INCOME TAX OFFICER WARD-1, GURUVAYUR. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) THRISSUR-680 001. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08-08-2016,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: bp WP(C).No. 25786 of 2016 (W) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS ----------------------- EXHIBIT P1: COPY OF THE ASSESSMENT ORDER DATED 22.2.2016 FOR THE YEAR 2008-09 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT. EXHIBIT P2: COPY OF THE ASSESSMENT ORDER DATED 17.3.2016 FOR THE YEAR 2013-14 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT. EXHIBIT P3: COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2008-09. EXHIBIT P4: COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2013-14. EXHIBIT P5: COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE YEAR 2008-09. EXHIBIT P6: COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE YEAR 2013-14. EXHIBIT P7: COPY OF THE ORDER DATED 8.7.2016 FOR THE YEAR 2008-09 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT. EXHIBIT P8: COPY OF THE ORDER DATED 8.7.2016 FOR THE YEAR 2013-14 ISSUED TO THE PETITIONER BY THE FIRST RESPONDENT. EXHIBIT P9: COPY OF THE ORDER DATED 20.7.2016 IN ITA NO.525/COCH/2014 OF THE INCOME TAX APPELLATE TRIBUNAL. RESPONDENT(S)' EXHIBITS : NIL. //TRUE COPY// P.A. TO JUDGE bp A.M. SHAFFIQUE, J. -------------------------------------- W.P.(C)No.25786 of 2016 ------------------------------------------------- Dated this, the 8th day of August, 2016

J U D G M E N T The petitioner challenges Exts.P7 and P8 orders by which stay has been granted on condition of the petitioner remitting 15% of the tax dues. The orders had been passed when the petitioner preferred appeals against Exts.P1 and P2 orders.

2.

The main contention urged by the petitioner is that the legal issue has already been decided in favour of the petitioner as per the order passed by the appellate Tribunal, Cochin Bench in ITA No.525/2014 and therefore, there was no reason why the petitioner should be called upon to remit any amount as the issue has already been decided by the Tribunal. Alternatively, the petitioner also seeks for early disposal of Exts.P3 and P4 appeals.

3.

It is inter alia contended that the entire interest received by the petitioner Society from other sources has to be deducted under Section 80P(2)(a)(i) of the Income Tax Act and it has been held so by the Tribunal in the case of Kizhathadiyoor Service Co-operative Bank Ltd.

4.

On the other hand the learned Standing Counsel appearing for the Revenue would submit that the issue is pending consideration before this Court in an appeal filed by the assessee in ITA No.66/2016, the matter relating to Poonjar Service Co-operative Bank Ltd. It is submitted that different Tribunals had taken different

W.P.(C)No.25786 of 2016 2 views and therefore, the issue is yet to be decided by this Court.

5.

Taking into consideration the fact that there are contrary views taken by the Tribunal with reference to the very same issue, I don't think that the officer committed any error in issuing Exts.P7 and P8 and hence I don't intend to interfere with the same.

6.

Learned counsel for the petitioner however seeks further time to remit the amount as stated in Exts.P7 and P8 and for an early hearing of the appeals.

7.

Taking into consideration the aforesaid request, this writ petition is disposed of as under :

1.

The petitioner shall remit the amounts specified in Exts.P7 and P8 within a period of three weeks from the date of receipt of a copy of this judgment.

2.

The 2nd respondent shall endeavor to hear and dispose of the appeals Exts.P3 and P4 as expeditiously as possible. A.M. SHAFFIQUE, JUDGE AV

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