THIROOR MULTI PURPOSE CO-OPERATVE SOCIETY LTD., vs. THE INCOME TAX OFFICER,

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WP(C)/3014/2020HC KeralaKLHC01008675202005 February 2020Author: HONOURABLE MR. JUSTICE ALEXANDER THOMAS4 pages
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What did the High Court hold?

The High Court, following a Division Bench judgment in W.A.No. 1529/2019 and subsequent similar cases, directed that the Commissioner of Income Tax (Appeals) shall ensure the final disposal of the petitioner's appeal (Ext.P2) without much delay and within a reasonable time. Crucially, the Court ordered that all coercive steps for the enforcement of the assessment order impugned in the appeal shall be kept in abeyance until the final orders are passed disposing of the appeal. The Court did not decide on the merits of the assessment itself but provided interim relief by staying recovery actions. The principle cited is that insistence on payment of a portion of the demand as a condition for stay need not be insisted upon in such cases, and the appellate authority should decide the statutory appeal expeditiously.

What were the facts?

The petitioner, Thiroor Multi Purpose Co-operative Society Ltd., filed a writ petition before the High Court of Kerala challenging an assessment order and demand notice for the assessment year 2017-18. The petitioner sought a direction to the Income Tax Officer (1st respondent) to refrain from taking coercive proceedings for recovery of the demand pending the disposal of their appeal and stay petition before the Commissioner of Income Tax (Appeals) (2nd respondent). The petitioner also prayed for a stay on the operation of the assessment order and the consequent demand. The matter was heard by Justice Alexander Thomas.

What were the issues?

1. Whether coercive proceedings for recovery of the demand for assessment year 2017-18 should be stayed pending the disposal of the appeal and stay petition before the Commissioner of Income Tax (Appeals)? (Question of law and fact, concerning the powers of the appellate authority and the court's writ jurisdiction). Assessee's Contention: The petitioner sought a stay on coercive recovery proceedings and the operation of the assessment order until their appeal is decided. Revenue's Contention: The judgment does not record specific arguments from the revenue regarding the stay or coercive proceedings. However, the context implies the revenue would seek to enforce the demand.

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 ALEXANDER THOMAS WEDNESDAY, THE 05TH DAY OF FEBRUARY 2020 / 16TH MAGHA, 1941 WP(C).No.3014 OF 2020(B) PETITIONER/S: THIROOR MULTI PURPOSE CO-OPERATVE SOCIETY LTD., THIROOR, M.G.KAVU, THRISSUR - 680 001, REPRESENTED BY SECRETARY SMT.RAGI C.RANGANATH. BY ADVS. SRI.T.M.SREEDHARAN (SR.) SMT.NISHA JOHN SRI.V.P.NARAYANAN SMT.DIVYA RAVINDRAN SRI.R.BHASKARA KRISHNAN RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD-2(5), THRISSUR - 680 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAWAN, SAKTHAN THAMPURAN NAGAR, THRISSUR - 680 001. OTHER PRESENT: SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.3014 OF 2020(B) 2 ALEXANDER THOMAS, J. ----------------------------------------- W.P.(C.) No. 3014 of 2020 ----------------------------------------- Dated this the 5th day of February, 2020

JUDGMENT The prayers in the above Writ Petition (Civil) are as follows: (i) To issue of a writ of mandamus or any other appropriate writ, order or direction, directing the 1st respondent to refrain from taking coercive proceedings for recovery of the demand pursuant to Exhibits P1 assessment order and demand notice for the assessment order and demand notice for the assessment year 2017- 18, pending disposal of the appeal/stay petition before the 2nd respondent. (ii) To stay the operation of Ext.P1 assessment order for the assessment year 2017-18 and the demand pursuant thereto, pending disposal of W.P.(C.) (iii) to grant such other or further reliefs, as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, including the cost of these proceedings.”

2.

Heard Smt.Nisha John, learned counsel appearing for the petitioner and Sri. Jose Joseph, learned Standing Counsel for the Income Tax Department appearing for the respondents.

3.

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.3014 OF 2020(B) 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 2nd respondent appellate authority shall ensure final disposal of Ext.P2 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.P2 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.3014 OF 2020(B) 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 31/12/2019 PASSED BY THE 1ST RESPONDENT FOR AY-2017-18 ALONG WITH DEMAND NOTICE & COMPUTATION OF INCOME. EXHIBIT P2 TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 23/01/2020 FOR AY-2017-18 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P2(A) TRUE COPY OF THE STAY PETITION DATED 23/01/2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR AY-2017-18. EXHIBIT P3 TRUE COPY OF THE APPLICATION DATED 23/01/2020 SUBMITTED BY THE PETITIONER U/S 220(6) BEFORE HE 1ST RESPONDENT FOR AY- 2017-18.

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