THE KIDANGOOR SERVICE CO-OPERATIVE BANK LTD., vs. THE COMMISSIONER OF INCOME TAX(APPEALS)
What did the High Court hold?
The High Court, following its own Division Bench judgment in W.A.No. 1529/2019 and other subsequent cases, directed the 1st respondent appellate authority to ensure the final disposal of Ext.P-2 appeal after affording the petitioner a reasonable opportunity of being heard, within a time frame to be fixed by the appellate authority. Crucially, the Court ordered that until final orders are passed disposing of Ext.P-2 appeal, all coercive steps for the enforcement of the assessment order impugned in the appeal shall be kept in abeyance. The Court did not decide the merits of the appeal itself but provided interim relief and directed expeditious disposal. No issue was expressly left undecided.
What were the facts?
The petitioner, The Kidangoor Service Co-operative Bank Ltd., represented by its Secretary, filed a Writ Petition (Civil) before the High Court of Kerala. The petition sought a writ of mandamus directing the 1st respondent, the Commissioner of Income Tax (Appeals), to consider the petitioner's appeal (Ext.P2) on its merits. Additionally, the petitioner sought to restrain the respondents from initiating coercive proceedings against them until an order was passed on the appeal. The petition was filed on February 5, 2020. The respondents are the Commissioner of Income Tax (Appeals) and the Income Tax Officer, Ward No. 5, Kottayam.
What were the issues?
1. Whether the 1st respondent should be directed to consider the petitioner's appeal (Ext.P2) on its merits? (Question of procedure/mandamus) 2. Whether coercive proceedings for recovery of impugned tax should be restrained until the disposal of the appeal? (Question of interim relief/procedure) Assessee's Contentions: The petitioner sought a direction for the appellate authority to consider their appeal on merits and to stay coercive recovery proceedings pending the appeal's disposal. They relied on a Division Bench judgment of the High Court in W.A.No. 1529/2019 and a Full Bench decision in Mavilayi Service Co-operative Service Bank Ltd., v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287]. Revenue's Contentions: The judgment records no specific contentions from the revenue. However, the Standing Counsel for the Income Tax Department appeared before the court.
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Cause title — parties, addresses and appearances
JUDGMENT The prayers in the above Writ Petition (Civil) are as follows: (1) “Issue a writ of mandamus or other appropriate writ, order or direction to the 1st respondent to consider Ext.P2 appeal on merit and also restraining the respondent to consider Ext.P2 appeal on merit and also restraining the respondents from initiating coercive proceedings against the petitioner society till orders are passed in Ext.P2 appeal on merit. (2) Grant such other reliefs which this Honourable court just and proper in the circumstance of the case.”
Heard Sri. O.D.Sivadas, learned counsel appearing for the petitioner and Sri. Jose Joseph, learned Standing Counsel for the Income Tax Department appearing for the respondents.
In similar circumstances, a Division Bench of this Court in the judgment dated 1.7.2019 in W.A.No. 1529/2019 has taken the view that the insistence for payment of a portion of the amount demanded, as a condition for grant of stay, need not be insisted in cases as in the instant one and that the Division Bench, for reasons stated therein, has ordered that it is for the appellate authority to take a decision on the statutory appeal at the earliest and that until the final decision is rendered by the appellate authority in the statutory appeal, coercive steps for recovery and collection of the impugned tax shall be kept in abeyance in the light of the dictum laid down by the Full Bench of this Court in Mavilayi Service Co-operative Service Bank Ltd., v. Commissioner of Income
WP(C).No.3185 OF 2020(W) 3 Tax, Calicut [2019 (2) KHC 287]. The Division Bench in the abovesaid judgment dated 1.7.2019 in W.A.No. 1529/2019 has also dealt with the reasons for taking such a view for making such an interim arrangement pending disposal of the main appeal by the statutory appellate authority concerned. The said decision of the Division Bench of this Court in W.A.No. 1529/2019 has been followed by this Court in a series of other cases as in the judgment dated 10.1.2020 in W.P.(C).No.523/2020. Accordingly, following the line of directions and orders already passed by the Division Bench of this Court in the judgment dated 1.7.2019 in W.A.No. 1529/2019 as well as various other judgments rendered by this Court, following the said directions and orders of the Division Bench in the matter of the interim arrangement till the disposal of the main statutory appeal, etc., following orders and directions are issued: It is ordered that the 1st respondent appellate authority shall ensure final disposal of Ext.P-2 appeal after affording reasonable opportunity of being heard to the petitioner without much delay and within a reasonable time limit that may be fixed appropriately by the said appellate authority. However, in the interest of justice it is ordered that until final orders are passed disposing of Ext.P-2 appeal, all coercive steps for the enforcement of the assessment order impugned in the abovesaid appeal shall be kept in abeyance. With these observations and directions, the Writ Petition (Civil) stands finally disposed of.
ALEXANDER THOMAS, JUDGE SKS
WP(C).No.3185 OF 2020(W) 4
Appendix — schedule of exhibits
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