THE NAGARIPURAM SERVICE CO-OPERATIVE BANK LTD. vs. THE INCOME TAX OFFICER

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WP(C)/33182/2019HC KeralaKLHC01086646201906 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 2nd respondent. The Court directed the 2nd respondent to consider and pass orders on the appeal (Ext.P2) within six months from the date of receipt of the judgment. Recovery steps for the amounts confirmed by the assessment order (Ext.P1) were ordered to be kept in abeyance until the 2nd respondent passes orders on the appeal and communicates them to the petitioner. The principle applied is that in cases involving Section 80P deductions, the Appellate Authority should be directed to decide the appeal expeditiously without imposing onerous conditions for stay, aligning with previous High Court pronouncements in similar matters.

What were the facts?

The petitioner, The Nagaripuram Service Co-operative Bank Ltd., filed an appeal (Ext.P2) and a stay petition (Ext.P3) against an assessment order (Ext.P1) passed by the Income Tax Officer (1st respondent). The Commissioner of Income Tax (Appeals) (2nd respondent) passed a conditional order (Ext.P4) granting a stay of recovery of the disputed amount, subject to the petitioner depositing 20% of the disputed amount. The petitioner submitted that the appeal concerns the deduction allowable under Section 80P of the Income Tax Act. The petitioner sought a direction from the High Court to consider the appeal without insisting on any deposit for the stay of recovery.

What were the issues?

1. Whether the Appellate Authority (2nd respondent) can impose a condition of depositing 20% of the disputed amount for granting a stay of recovery pending appeal, when the appeal pertains to the deduction allowable under Section 80P of the Income Tax Act? Assessee's contention: The petitioner argued that in similar cases, the High Court has directed the Appellate Authority to consider and pass orders on the appeal without insisting on the deposit of any disputed amount as a condition for granting a stay of recovery pending disposal of the appeal. The issue in the appeal is the deduction allowable under Section 80P. Revenue's contention: The judgment does not record any specific contention from the revenue regarding this issue.

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 06TH DAY OF DECEMBER 2019 / 15TH AGRAHAYANA, 1941 WP(C).No.33182 OF 2019(W) PETITIONER/S: THE NAGARIPURAM SERVICE CO-OPERATIVE BANK LTD. NAGARIPURAM, MANNUR, PALAKKAD-678 642, REPRESENTED BY ITS SECRETARY, GEETHA K. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD 2, AYAKAR BHAVAN, PALAKKAD-678 014. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) SAKTHAN NAGAR, THRISSUR-680 021. SRI. JOSE JOSEPH; SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.33182 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 WP(C).No.33182 OF 2019 3 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 SJ

WP(C).No.33182 OF 2019 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE IST RESPONDENT FOR THE YEAR 2013-14 DATED 21.3.2016. EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2013-14 DATED 11.4.2016. EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2013-14 DATED 11.4.2016. EXHIBIT P4 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DATED 7.11.2019. EXHIBIT P5 COPY OF JUDGMENT IN W.A.NO.1646/2019 OF THIS HON'BLE COURT DATED 19.7.2019. EXHIBIT P6 COPY OF JUDGMENT IN WPC NOS.21015 & 20995/2019 OF THIS HON'BLE COURT DATED 19.8.2019. EXHIBIT P6 A COPY OF JUDGMENT IN WPC NO.22496/2019 OF THIS HON'BLE COURT DATED 19.8.2019.

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