THE MANNARKKAD TALUK AIDED SCHOOL vs. THE INCOME TAX OFFICER,
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 Commissioner of Income Tax (Appeals) 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 were to be kept in abeyance until the Appellate Authority passed its orders and communicated them to the petitioner. The principle derived is that in cases involving substantial issues like deductions under Section 80P, and where High Court precedents exist, the Appellate Authority should be directed to decide the appeal expeditiously without unduly burdening the assessee with pre-deposit requirements, especially when the appeal is pending. No issue was expressly left undecided.
What were the facts?
The petitioner, Mannarkkad Taluk Aided School Employees Co-operative Credit Society Ltd, filed an appeal (Ext.P2) and a stay petition (Ext.P3) against an assessment order (Ext.P1) passed by the Income Tax Officer. The Commissioner of Income Tax (Appeals), the second 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 contended that the issue in appeal pertains to the deduction allowable under Section 80P of the Income Tax Act. The petitioner further submitted that in similar cases, the High Court had directed the Appellate Authority to consider appeals without insisting on such deposits for granting a stay of recovery pending appeal disposal.
What were the issues?
1. Whether the Appellate Authority can impose a condition of depositing a portion of the disputed tax as a prerequisite 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 the issue in appeal is the deduction allowable under Section 80P of the Income Tax Act. They relied on High Court precedents where, in similar cases, the Appellate Authority was directed to consider appeals and grant stay of recovery without insisting on the deposit of any disputed amount. Revenue's Contention: The judgment does not record any specific contentions made by the revenue regarding the condition imposed for the stay. The revenue was represented by the Standing Counsel.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
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.
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
WP(C).No.32422 OF 2019(C) 3 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 RKM
WP(C).No.32422 OF 2019(C) 4
Appendix — schedule of exhibits
More judgments on Section 80P
- Shree Bandharda Seva Sahkari Mandli Ltd… vs Income Tax Officer Ward -4, JunagadhITA 881/RJT/2025[2019-20]Status: Disposed19 Oct 2026AY 2019-20
- Duddukuru Primary Agricultural Cooperative… vs ITO, Ward - 1, TadepalligudemITA 258/VIZ/2026[2015-16]Status: Disposed16 Oct 2026AY 2015-16
- Parthasaradhi Mutually Aided Co-Operative… vs Income-Tax Officer, Ward-17(1), HyderabadITA 2322/HYD/2026[AY 2016-17]Status: Disposed16 Oct 2026
- Jijamata Mahila Gramin Bigar Sheti Sahakari… vs ITO Ward -1, BhandraITA 102/NAG/2026[2020-21]Status: Disposed12 Oct 2026AY 2020-21
- Shri Na vs Ari Khedut Sahkari Society Ltd…ITA 362/SRT/2025[2016-17]Status: Disposed9 Oct 2026AY 2016-17
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