THE VENGERI SERVICE CO-OPERATIVE BANK LIMITED,NO.2714 vs. INCOME TAX OFFICER

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WP(C)/34728/2019HC KeralaKLHC01089959201918 December 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, taking a cue from a previous judgment, directed the Joint Commissioner of Income Tax (Appeals) to consider and pass reasoned orders on the petitioner's appeals (Exts.P3 and P4) within six months from the receipt of the judgment. Recovery steps for the amounts confirmed by the penalty orders (Exts.P1 and P2) were ordered to be kept in abeyance until the Appellate Authority passed its order and communicated it to the petitioner. Consequently, the impugned order (Ext.P7) directing the payment of 20% of the disputed amount was set aside. The petitioner was directed to furnish copies of the writ petition and the judgment to the Appellate Authority for further action. The principle established is that recovery can be stayed pending appeal, especially when the appellate authority is directed to expedite the disposal of the appeal.

What were the facts?

The petitioner, The Vengeri Service Co-Operative Bank Limited, filed appeals (Exts.P3 and P4) along with stay petitions (Exts.P5 and P6) before the Joint Commissioner of Income Tax (Appeals) against penalty orders (Exts.P1 and P2) passed under the Income Tax Act. While the stay petitions were pending, the petitioner received an order (Ext.P7) under Section 220(6) of the Income Tax Act, directing them to pay 20% of the disputed amount pending the appeal's disposal. The petitioner sought relief from this order, referencing a previous High Court judgment where similar recovery proceedings were kept in abeyance until the appellate authority decided the appeal.

What were the issues?

1. Whether the recovery of 20% of the disputed amount, as directed by the order under Section 220(6) of the Income Tax Act, is justified pending the disposal of appeals before the Appellate Authority? (Question of law and fact, concerning Section 220(6) of the Income Tax Act). Assessee's Contention: The petitioner argued that recovery proceedings should be kept in abeyance until the appeal is decided, citing a High Court judgment with similar circumstances where such a direction was given. They sought to set aside the impugned order directing payment of 20% of the disputed amount. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the issue of recovery pending appeal.

Which sections of the Income-tax Act were involved?

Section 220(6)

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 WEDNESDAY, THE 18TH DAY OF DECEMBER 2019/27TH AGRAHAYANA, 1941 W.P(C).No.34728 OF 2019(M) PETITIONER: THE VENGERI SERVICE CO-OPERATIVE BANK LIMITED,NO.2714 REP BY ITS SECRETARY, VENGERI P.O, KOZHIKODE 673 010. BY ADVS.SRI.M.P.ASHOK KUMAR SRI.P.C.GOPINATH SMT.BINDU SREEDHAR SHRI.ASIF N RESPONDENTS: 1 INCOME TAX OFFICER AAYAKAR BHAVAN, KOZHIKODE 673 001. 2 JOINT COMMISSIONER OF INCOME TAX, OFFICE OF THE INCOME TAX DEPARTMENT, RANGE-2, KOZHIKODE 673 001. 3 COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, KOZHIKODE 673 001. BY SRI.CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.34728/2019 :: 2 ::

J U D G M E N T Against Exts.P1 and P2 penalty orders under the Income Tax Act, the petitioner has preferred Exts.P3 and P4 appeals together with Exts.P5 and P6 stay petitions before the 3rd respondent. It is stated that while the stay petitions are pending consideration before the 3rd respondent/Appellate Authority, by Ext.P7 order issued under Section 220(6) of the Income Tax Act, the petitioner has been directed to pay 20% of the disputed amount pending disposal of the appeals. The learned counsel for the petitioner refers to Ext.P8 judgment of this Court, where, under similar circumstances, this Court had directed the Appellate Authority to consider and pass orders in the appeal and kept the recovery proceedings in abeyance till such time as the Appellate Authority decided the appeal. Taking cue from the said judgment, I dispose the writ petition by directing the 3rd respondent/Appellate Authority to consider and pass reasoned orders on Exts.P3 and P4 appeals within an outer time limit of six months from the date of W.P.(C).No.34728/2019 receipt of a copy of this judgment, after hearing the petitioner. Recovery steps for recovery of amounts confirmed against the petitioner by Exts.P1 and P2 penalty orders shall be kept in abeyance till such time as orders are passed by the 3rd respondent, as directed, and the order communicated to the petitioner. In the light of the directions above, Ext.P7 order impugned in the writ petition is set aside. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 3rd respondent, for further action. A.K.JAYASANKARAN NAMBIAR JUDGE prp/18/12/19

W.P.(C).No.34728/2019

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 PHOTOCOPY OF PENALTY ORDER DATED 05-08-2019 BY 2ND RESPONDENT US 27ID IT ACT EXHIBIT P2 PHOTOCOPY OF PENALTY ORDER DATED 05-08-2019 BY 2ND RESPONDENT US 271E IT ACT EXHIBIT P3 PHOTOCOPY OF THE APPEAL AGAINST SECTION 27ID PENDING BEFORE THE 3RD RESPONDENT EXHIBIT P4 PHOTOCOPY OF THE APPEAL AGAINST SECTION 27IE PENDING BEFORE THE 3RD RESPONDENT. EXHIBIT P5 PHOTOCOPY OF THE STAY PETITION AGAINST EXT P1 BEFORE 3RD RESPONDENT DATED 22-10-2019. EXHIBIT P6 PHOTOCOPY OF THE STAY PETITION AGAINST EXT P2 BEFORE 3RD RESPONDENT DATED 22-10-2019. EXHIBIT P7 PHOTOCOPY OF THE INTERIM ORDER PASSED IN THE STAY PETITION DATED 13/12/2019. EXHIBIT P8 RESPONDENTS EXHIBITS: PHOTOCOPY OF THE COMMON JUDGMENT IN WPC 6907 OF 2019 AND OTHER CONNECTED MATTERS DATED 11-10-2019 NIL. //TRUE COPY// P.S. TO JUDGE

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