THE KECHERY SERVICE CO-OPERATIVE BANK LTD. NO.R286, vs. THE INCOME TAX OFFICER,

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WP(C)/35532/2019HC KeralaKLHC01092239201920 December 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court quashed the conditional order of stay (Ext.P4) passed by the Commissioner of Income Tax (Appeals). The Court directed the 2nd respondent to consider and pass orders on the petitioner's appeal (Ext.P2) within six months from the date of receiving a copy of the judgment, after hearing the petitioner. Recovery steps for the amounts confirmed by the assessment order (Ext.P1) were to be kept in abeyance until the 2nd respondent passed orders on the appeal and communicated them to the petitioner. The Court's reasoning was based on the fact that in similar matters, it had directed appellate authorities to consider appeals and stay recovery pending disposal. The ratio is that in cases concerning Section 80P deductions, where similar High Court orders exist, appellate authorities should proceed with the appeal without insisting on a substantial deposit for stay, and recovery should be stayed pending the appeal's disposal.

What were the facts?

The petitioner, The Kechery Service Co-Operative Bank Ltd., filed an appeal (Ext.P2) along with a stay petition (Ext.P3) against an assessment order (Ext.P1) passed under the Income Tax Act. The 2nd respondent, the Commissioner of Income Tax (Appeals), passed a conditional order of stay (Ext.P4), requiring the petitioner to deposit 20% of the disputed amount for a stay of recovery of the balance pending the appeal. The petitioner contended that the issue in appeal concerns deductions under Section 80P of the Income Tax Act, and in similar cases, the High Court has directed appellate authorities to consider appeals without insisting on such deposits.

What were the issues?

1. Whether the Appellate Authority can impose a condition of depositing 20% of the disputed amount for granting a stay of recovery pending appeal, when the appeal concerns deductions under Section 80P of the Income Tax Act? Assessee's Contention: The petitioner argued that in similar cases involving Section 80P deductions, the High Court has directed appellate authorities to decide appeals without demanding a deposit as a condition for stay. They relied on this precedent to argue against the conditional stay order. Revenue's Contention: The judgment does not record any specific arguments made by the revenue. However, the existence of the conditional stay order implies the revenue's position was to uphold the authority of the Commissioner (Appeals) to impose such conditions.

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 20TH DAY OF DECEMBER 2019 / 29TH AGRAHAYANA, 1941 WP(C).No.35532 OF 2019(N) PETITIONER: THE KECHERY SERVICE CO-OPERATIVE BANK LTD. NO.R286, KECHERY P.O., THRISSUR-680 501, REPRESENTED BY ITS SECRETARY, DAVIS.P.A., AGED 44, S/O.P.D.ANTHONY. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD 1 AND TPS, IIND FLOOR, CITY PLAZA, WEST NADA, GURUVAYUR- 680 101. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR-680 021. BY ADV.SRI.JOSE JOSEPH,SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C).No.35532 of 2019 2

JUDGMENT Against Ext.P1 assessment order under the Income Tax Act, the petitioner has preferred Ext.P2 appeal together with Ext.P3 stay petition before the 2nd respondent. The 2nd respondent by Ext.P4 order passed a conditional order of stay in the stay application directing the petitioner to deposit 20% of the disputed amount as a condition for grant of stay of recovery of the balance amount pending disposal of the appeal. It is submitted by the learned counsel for the petitioner that the issue involved in the appeal is the deduction allowable under Section 80P of the Income Tax Act, and in similar cases, this Court has directed the Appellate Authority to consider and pass orders in the appeal without insisting on the deposit of any disputed amount as a condition for grant of stay of recovery of the assessed amount pending disposal of the appeal.

2.

I have heard the learned counsel appearing for the petitioner and also the learned Standing counsel appearing 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 similar matters, this Court has directed the Appellate Authority to consider and pass orders in the appeal and stayed the recovery of disputed amounts pending disposal of the appeal, this Writ petition is disposed by quashing Ext.P4 conditional order, and directing the 2nd respondent to consider and pass orders on Ext.P2 appeal within an outer time limit of six months from the date of receipt of a copy of this judgment, after hearing the petitioner. It is made clear that recovery steps for recovery of amounts confirmed against the petitioner by Ext.P1 assessment order shall be kept in abeyance till such time as orders are passed by the 2nd respondent as directed above and communicated to the petitioner. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 2nd respondent, for further action. A.K.JAYASANKARAN NAMBIAR

JUDGE mns

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2010-11 DATED 19.11.2018. EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR TYE YEAR 2010-11 DATED 29.12.2018. EXHIBIT P3 COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2010-11 DATED 29.12.2018. EXHIBIT P4 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DATED 09.12.2019 EXHIBIT P5 COPY OF JUDGMENT IN WA NO.1649/2019 OF THIS HON'BLE COURT DATED 19.07.2019. EXHIBIT P6 COPY OF JUDGMENT IN WPC NOS.21015 & 20995/2019 OF THIS HON'BLE COURT DATED 19.08.2019 EXHIBIT P6 A COPY OF JUDGMENT IN WPC NO.22496/2019 OF THIS HON'BLE COURT DATED 19.08.2019. RESPONDENTS EXHIBITS:NIL //TRUE COPY// P.A TO JUDGE

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