EDAPATTA SERVICE CO-OPERATIVE BANK LTD. vs. INCOME TAX OFFICER

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WP(C)/34221/2015HC KeralaKLHC01080057201513 November 2015Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
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What did the High Court hold?

The High Court modified the conditional stay order (Ext.P4) passed by the Commissioner of Income Tax (Appeals). The Court noted that the petitioner had already paid the first installment as directed. Therefore, the petitioner would not be required to make any further payments pending the disposal of their appeal by the 2nd respondent. The Court further directed the 2nd respondent to consider and pass orders on the petitioner's appeals within three months from the date of receipt of a copy of the judgment, after hearing the petitioner. Recovery steps for the amounts confirmed against the petitioner were to be kept in abeyance until the 2nd respondent passed orders and communicated them to the petitioner. The ratio is that in cases where similar matters are pending before the High Court and stays have been granted, and the assessee has complied with initial conditional stay requirements, further payments can be stayed pending appeal disposal by the appellate authority, with a direction for expeditious disposal.

What were the facts?

The petitioner, Edaptta Service Co-operative Bank Ltd., is challenging an order (Ext.P4) passed by the Commissioner of Income Tax (Appeals) [2nd respondent]. This order was a conditional stay granted in appeals filed against assessment orders under the Income Tax Act. The assessment orders confirmed demands against the petitioner by disallowing deductions under Section 80P of the Income Tax Act. The 2nd respondent's stay order required the petitioner to make payments as a condition for staying the recovery of the balance amounts. The petitioner had already paid the first installment as directed in Ext.P4. The petitioner seeks a stay of further installment payments, citing pending appeals before the High Court in similar cases where stays have been granted.

What were the issues?

1. Whether the conditional stay order (Ext.P4) passed by the Commissioner of Income Tax (Appeals), requiring the petitioner to pay installments as a condition for stay of recovery, is sustainable, particularly in light of similar matters pending before the High Court where stays have been granted? Assessee's Contention: The petitioner argues that in identical matters where income tax appeals against orders confirming demands similar to theirs are pending before the High Court, this Court has granted a stay of recovery pending disposal of those appeals. Therefore, they seek a stay of the direction to remit the balance amount in installments. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

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 13TH DAY OF NOVEMBER 2015/22ND KARTHIKA, 1937 WP(C).No. 34221 of 2015 (C) ---------------------------- PETITIONER(S): -------------------------- EDAPATTA SERVICE CO-OPERATIVE BANK LTD., EDAPATTA, PERINTHALMANNA, MALAPPURAM DISTRICT-679 326, REPRESENTED BY ITS SECRETARY BY SRI.K.ANAND, SENIOR ADVOCATE. ADVS. SMT.LATHA ANAND, SRI.JOSEPH SEBASTIAN (PARACKAL). RESPONDENT(S): ---------------------------- 1. INCOME TAX OFFICER, WARD 4, OFFICE OF THE INCOME TAX OFFICER, TARIFF BAZAR, TOWN HALL ROAD, TIRUR -676 101. 2. THE COMMISSIONER OF INCOME TAX (APPEAL), AAYAKARA BHAVAN, MANANCHIRA, KOZHIKODE- 673 001. BY ADV. SRI.K.M.V.PANDALAI, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13-11-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. WP(C).No. 34221 of 2015 (C) APPENDIX PETITIONER'S EXHIBITS:- EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 02-03-2015. EXHIBIT P2 TRUE COPY OF THE APPEAL MEMORANDUM. EXHIBIT P3 TRUE COPY OF APPLICATION FOR STAY. EXHIBIT P4 TRUE COPY OF ORDER DATED 22-09-2015 PASSED BY 2ND RESPONDENT. EXHIBIT P5 TRUE COPY OF THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN DATED 14-05-2015. RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.S. TO JUDGE rs. A.K.JAYASANKARAN NAMBIAR, J. - - - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.34221 of 2015 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 13th day of November 2015

JUDGMENT The challenge in the writ petition is against Ext.P4 order passed by the 2nd respondent, in stay applications preferred by the petitioner along with appeals filed against assessment orders under the Income Tax Act, where amounts were confirmed against the petitioner by disallowing deductions under Section 80 P of the Income Tax Act. In Ext.P4 stay order, the 2nd respondent has passed a conditional order of stay requiring the petitioner to effect payments as a condition for grant of stay of recovery of the balance amounts confirmed against him. The learned counsel for the petitioner would submit that pursuant to Ext.P4 stay order, he has also paid the first instalment, directed therein. The prayer in the writ petition is essentially for a stay of the direction to remit the balance amount in instalments in view of the fact that the income tax appeals preferred by other assessees against orders of the appellate Tribunal confirming demands similar to what was confirmed against the petitioner, are pending consideration before this Court and in those appeals, this Court has granted a stay of recovery of amounts pending disposal of the appeals.

W.P.(c).No.34221 of 2015 : 2 :

2.

I have heard the learned counsel for the petitioner and also 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 and taking note of the fact that in identical matters this Court has granted a stay pending disposal of the income tax appeals, I modify the directions in Ext.P4 conditional order of stay granted by the 2nd respondent by making it clear that, insofar as the petitioner had already paid the 1st instalment mentioned in Ext.P4 order, the petitioner will not be required to make any further payment in the matter pending disposal of the appeal by the 2nd respondent. There will be a further direction to the 2nd respondent to consider and pass orders in the appeals within a period of three months from the date of receipt of a copy of this judgment, after hearing the petitioner. The recovery steps for recovery of amounts from the petitioner pursuant to the assessment orders shall be kept in abeyance till such time as orders are passed by the 2nd respondent as directed and communicated to the petitioner. The petitioner shall produce a copy of this judgment along with a copy of this writ petition before the 2nd respondent for further action. A.K.JAYASANKARAN NAMBIAR

JUDGE sm/

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