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

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WP(C)/35541/2019HC KeralaKLHC01092228201920 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 Appellate Authority passed its order and communicated it to the petitioner. The ratio of the decision is that in cases involving deductions under Section 80P, the Appellate Authority should not insist on a pre-deposit for granting a stay, especially when the High Court has previously set such a precedent. The Court did not decide the merits of the appeal itself, only the conditionality of the stay.

What were the facts?

The petitioner, The Kechery Service Co-Operative Bank Ltd., filed a writ petition before the High Court of Kerala challenging a conditional order of stay (Ext.P4) passed by the Commissioner of Income Tax (Appeals) (2nd respondent). The assessment order (Ext.P1) was passed by the Income Tax Officer (1st respondent). The petitioner had filed an appeal (Ext.P2) and a stay petition (Ext.P3) against the assessment order. The conditional order of stay required the petitioner to deposit 20% of the disputed amount for a stay of recovery of the balance pending appeal. The issue in appeal pertains to the deduction allowable under Section 80P of the Income Tax Act.

What were the issues?

1. Whether the Appellate Authority can insist on a pre-deposit of a portion of the disputed amount as a condition 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, the High Court had directed the Appellate Authority to consider and pass orders on the appeal without insisting on any deposit as a condition for granting a stay of recovery. The petitioner relied on previous High Court judgments in similar matters. Revenue's Contention: The judgment does not record any specific arguments made by the revenue's standing counsel.

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
W.P(C).No.35541 of 2019 1 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.35541 OF 2019(P) PETITIONER: THE KECHERY SERVICE CO-OPERATIVE BANK LTD. NO.R286, KECHERY P O, THRISSUR-680501, 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 PTS, IIND FLOOR, CITY PLAZA, WEST NADA, GURUVAYUR-680101. 2 THE COMMISSIONER OF INCOME TAX(APPEALS) SAKTHAN NAGAR, THRISSUR-680021. 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.35541 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 2016-17 DATED 21.11.2018. EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2016-17 DATED 22.12.2018. EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2016- 17 DATED 22.12.2018. 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 WP(C) NOS 21015 AND 20995/2019 OF THIS HON'BLE COURT DATED 19.08.2019. EXHIBIT P6 A COPY OF JUDGMENT IN WP(C) 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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