EDARIKODE SERVICE CO OPERATIVE BANK LIMITED vs. THE INCOME TAX OFFICER
What did the High Court hold?
The High Court of Kerala disposed of the writ petition without expressing any opinion on the merits of the case. The Court directed the Commissioner of Income Tax (Appeals) to decide the rectification petitions (Exts.P9 and P10) for assessment years 2008-09 and 2013-14 expeditiously, within a period of two months from the date of receipt of a certified copy of the judgment. Until such time, the demand raised by Exts.P11 and P12 was ordered to be stayed, subject to the petitioner furnishing a bank guarantee for the entire amount reflected in the impugned notices. The Court's reasoning was based on ensuring procedural fairness and preventing potential prejudice to the assessee while their rectification petitions were being considered.
What were the facts?
The petitioner, Edarikode Service Co-operative Bank Limited, filed a writ petition before the High Court of Kerala challenging demand notices issued by the Income Tax Officer. The petitioner had appealed an assessment order dated February 22, 2016, for assessment year 2013-2014, which resulted in a demand of Rs. 1,25,86,090/-. The appeals were decided on December 12, 2019. Subsequently, on February 8, 2020, the petitioner filed rectification petitions. However, on February 7, 2020, they received demand notices for the aforementioned assessment years, upholding the order of the first appellate authority. The petitioner sought a stay on these demands during the pendency of their rectification petitions.
What were the issues?
1. Whether the demand notices issued for the assessment years 2008-09 and 2013-14 should be stayed pending the decision on rectification petitions filed by the assessee? (Question of mixed law and fact, concerning the procedural fairness and potential prejudice to the assessee). Assessee's Contention: The petitioner argued that while they had no objection to arguing the pending appeal as early as possible, the demand raised during the interregnum period should be stayed. They had filed rectification petitions citing an apparent error on record. Revenue's Contention: The learned counsel for the Income Tax Department submitted that the rectification petitions were filed after the receipt of the demand notice, and therefore, no interference by the Court was warranted.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT The petitioner has approached this Court, seeking ventilation of the grievance on the premise that against the assessment order dated 22.02.2016 for the assessment year 2013-2014 had preferred two appeals Exts.P5 and P6. Prior to the preference of the appeal, demand notice of Rs.1,25,86,090/- dated 22.02.2016 was issued by the 1st respondent. The appeals have been decided on 12.12.2019 order thereof received on 03.02.2020. Since there was an error apparent on record the petitioner have preferred two rectification petitions Exts.P9 and P10 on 08.02.2020. However, on 07.02.2020 received two notices Exts.P11 and P12 for aforementioned assessment years demanding tax as per the order of the first Appellate Court, which upheld the order of the Assessing Officer. Learned counsel submitted that there will not be any aversion in arguing pending appeal as early as possible, but the demand during interregnum raised should be stayed. The learned counsel for the Income Tax Department submits that the rectification have been filed after receipt of demand notice and therefore no such interference is warranted.
WP(C).No.4106 OF 2020(K) 3 Having heard learned counsel for the parties, I am of the view that the writ petition can be disposed of without expressing any opinion on the merits by issuing directions to the 2nd respondent to decide the rectification petitions Exts.P9 and P10 for the assessment year 2008-09 and 2013-14 as expeditiously as possible within a period of two months from the date of receipt of a certified copy of this judgment. Till such time the demand raised by Exts.P11 and P12 are ordered to be stayed subject to furnishing the bank guarantee of entire amount reflected in impugned notices Exts.P11 and P12. AMIT RAWAL nak JUDGE
WP(C).No.4106 OF 2020(K) 4
Appendix — schedule of exhibits
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