CHEKKIAD SERVICE COOPERATIVE BANK LTD. vs. INCOME TAX OFFICER

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WP(C)/31778/2019HC KeralaKLHC01083004201925 November 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in consideration of the facts, circumstances, submissions, and a previous judgment (Ext.P5) in almost identical circumstances, quashed the impugned order (Ext.P4). The Court directed the 3rd respondent (Joint Commissioner of Income Tax (Appeals)) to consider and pass orders on the petitioner's appeal (Ext.P2) expeditiously, after hearing the petitioner, within three months from the date of receipt of a copy of the judgment. Pending disposal of the appeal and communication of the orders, there will be a stay of further recovery proceedings for amounts confirmed against the petitioner by the penalty order (Ext.P1). The petitioner was directed to produce copies of the writ petition and the judgment before the 3rd respondent.

What were the facts?

The petitioner, Chekkiad Service Cooperative Bank Ltd., is challenging a penalty order (Ext.P1) under the Income Tax Act. They filed an appeal (Ext.P2) and a stay petition (Ext.P3) before the Joint Commissioner of Income Tax (Appeals) (3rd respondent). The appellate authority, by Ext.P4, directed the petitioner to pay 20% of the disputed amount as a condition for staying the recovery of the balance pending the appeal. The petitioner argued that in similar cases involving Primary Agricultural Credit Societies, the High Court had quashed such stay orders, directing the appellate authority to pass final orders within three months and staying recovery proceedings in the interim. The petitioner sought a similar order.

What were the issues?

1. question: Whether the condition imposed by the appellate authority for granting a stay of recovery, requiring payment of 20% of the disputed amount, is justified, considering the financial implications for Primary Agricultural Credit Societies? assessee_argument: The assessee argued that in almost identical circumstances, the High Court had quashed similar stay orders, taking note of the huge financial implications for Primary Agricultural Credit Societies. They relied on a previous High Court judgment (Ext.P5) in similar cases. revenue_argument: The judgment records no argument for the revenue.

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 MONDAY, THE 25TH DAY OF NOVEMBER 2019 / 4TH AGRAHAYANA, 1941 WP(C).No.31778 OF 2019(V) PETITIONER: CHEKKIAD SERVICE COOPERATIVE BANK LTD.NO.F 1657 REP. BY ITS SECRETARY, CHEKKIAD P. O., PARAKKADAVU - 673 509. BY ADVS. SRI.M.P.ASHOK KUMAR SHRI.ASIF N RESPONDENTS: 1 INCOME TAX OFFICER AAYAKAR BHAVAN, KOZHIKODE - 673 001. 2 JOINT COMMISSINER OF INCOME TAX OFFICE OF THE INCOME TAX DEPARTMENT, RANGE -2, KOZHIKODE - 673001. 3 COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, KOZHIKODE - 673 001. BY ADV.SRI.CHRISTOPHER ABRAHAM,SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.31778 of 2019 2

JUDGMENT Against Ext.P1 penalty order under the Income Tax Act, the petitioner has preferred Ext.P2 appeal and Ext.P3 stay petition before the 3rd respondent. By Ext.P4 order, the 3rd respondent directed payment of 20% of the disputed amount as a condition for stay of recovery of the balance amount pending disposal of the appeal. The learned counsel for the petitioner points out that in almost identical circumstances, taking note of the huge financial implication for Primary Agricultural Credit Societies like the petitioner, this Court had quashed similar stay orders and directed the appellate authority to pass final orders in the appeal within three months from the date of receipt of a copy of the judgment, and stayed the recovery proceedings for the disputed amount, in the meanwhile. It is prayed that a similar order be passed in the instant case as well.

2.

I have heard the learned counsel appearing for the petitioner as also the learned Standing counsel appearing for the Income Tax Department.

3.

On a consideration of the facts and circumstances of the case as also the submissions made across the bar and taking note of Ext.P5 judgment of this Court passed in almost identical circumstances, I dispose the Writ Petition by quashing Ext.P4 order and directing the 3rd respondent, before whom Ext.P2 appeal has been preferred by the petitioner against orders of penalty passed against it under the Income Tax Act, to consider and pass orders on the same, expeditiously, after hearing the petitioner, within three months from the date of receipt of a copy of this judgment. It is made clear that pending disposal of appeals by the 3rd respondent, and communication of the orders to the petitioner, there will be a stay of further proceedings for recovery of amounts confirmed against the petitioner by Ext.P1 penalty order. The petitioner shall produce a copy of the writ petition along with a copy of this judgment, before the 3rd respondent, for further action. A.K.JAYASANKARAN NAMBIAR

JUDGE mns

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 PHOTOCOPY OF THE ORDER DATED 14.5.2019 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P2 PHOTOCOPY OF THE APPEAL DATED 11.6.2019. EXHIBIT P3 PHOTOCOPY OF THE APPLICATION FOR STAY DATED 18.6.2019. EXHIBIT P4 PHOTOCOPY OF THE ORDER DATED 5.11.2019 PASSED BY THE 3RD RESPONDENT. EXHIBIT P5 PHOTOCOPY OF THE COMMON JUDGMENT IN WPC 6907 OF 2019 DATED 11.10.2019. RESPONDENTS EXHIBITS:NIL //TRUE COPY// P.A TO JUDGE

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