THE ARUVIKKARA FARMERS SERVICE CO-OPERATIVE BANK LTD. NO. 603 vs. THE INCOME TAX OFFICER

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WP(C)/31787/2019HC KeralaKLHC01083170201925 November 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the second respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the petitioner's appeal (Ext.P3) within an outer time limit of six months. Crucially, the Court ordered that recovery steps for the amounts confirmed by the revised assessment order (Ext.P2), including further steps pursuant to Ext.P7, shall be kept in abeyance until orders are passed by the second respondent and communicated to the petitioner. The Court also permitted the petitioner to operate the bank account mentioned in Ext.P7 during the period the stay granted by the Court is in operation. The primary principle applied is the need to preserve the status quo and allow the appellate process to conclude before coercive recovery measures are enforced, especially when a stay petition is pending.

What were the facts?

The petitioner, Aruvikkara Farmers Service Co-operative Bank Ltd., filed a writ petition before the High Court of Kerala challenging a revised assessment order (Ext.P2) issued under the Income Tax Act. The petitioner had preferred an appeal (Ext.P3) along with stay petitions (Exts.P4 and P9) before the Commissioner of Income Tax (Appeals), the second respondent. The petitioner contended that despite the pending appeal and stay petitions, recovery steps were being initiated by the respondents. The core issue in the appeal concerned the disallowance of a deduction claimed under Section 80P of the Income Tax Act. The petitioner sought intervention from the High Court to prevent recovery actions while the appeal was pending.

What were the issues?

1. Whether the petitioner is entitled to a stay of recovery proceedings pending the disposal of their appeal before the Commissioner of Income Tax (Appeals)? (Question of mixed law and fact, concerning the powers of the appellate authority and the Income Tax Act). Assessee's Contention: The petitioner argued that recovery steps were being taken prematurely, even before the stay petition was considered by the appellate authority. They relied on the pendency of their appeal and stay petitions as grounds for halting recovery. Revenue's Contention: The judgment does not record specific arguments made by the revenue. However, the context implies the revenue was pursuing recovery of the amounts confirmed by the revised assessment order.

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 MONDAY, THE 25TH DAY OF NOVEMBER 2019 / 4TH AGRAHAYANA, 1941 WP(C).No.31787 OF 2019(W) PETITIONER: THE ARUVIKKARA FARMERS SERVICE CO-OPERATIVE BANK LTD. NO. 603 REPRESENTED BY ITS MANAGING DIRECTOR, ARUVIKKARA P.O.THIRUVANANTHAPURAM DISTRICT-695 564. BY ADVS. SRI.T.R.HARIKUMAR SRI.ARJUN RAGHAVAN RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-2(3), OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX, RANGE-2, AAYAKAR BHAVAN, KOWDIAR P.O.THIRUVANANTHAPURAM DISTRICT-695 003. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM DISTRICT- 695 003. 3 THE THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK LTD, REPRESENTED BY ITS GENERAL MANAGER, HEAD OFFICE, EAST FORT, THIRUVANANTHAPURAM-695 023. OTHER PRESENT: SC CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.31787 OF 2019 2

JUDGMENT Against Ext.P2 revised assessment order under the Income Tax Act, the petitioner has preferred Ext.P3 appeal together with Exts.P4 and P9 stay petitions before the 2nd respondent. It is the case of the petitioner that even prior to considering the stay petition, recovery steps are taken by the respondents against the petitioner for recovery of the amounts confirmed by Ext.P2 revised assessment order. It is stated by the learned counsel for the petitioner that the issue involved in the appeal pertains to dis-allowance of deduction claimed under Section 80P of the Income Tax Act.

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 directing the 2nd respondent to consider and pass orders on Ext.P3 appeal within an outer time limit of six months. Recovery steps for recovery of amounts confirmed against the petitioner by Ext.P2 revised assessment order including further steps pursuant to Ext.P7 shall be kept in abeyance till such time as orders are passed by the 2nd respondent as directed above and communicated to the petitioner. It is made that during the time when the WP(C).No.31787 OF 2019 3 stay granted by this Court is in operation, the petitioner will be free to operate the bank account mentioned in Ext.P7. A.K.JAYASANKARAN NAMBIAR JUDGE SJ

WP(C).No.31787 OF 2019 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE JUDGMENT DATED 2.8.2018 IN WA NO 1437 OF 2018 EXHIBIT P2 A TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2013-2014 DATED 9.3.2019, ISSUED UNDER SECTION 154 OF THE INCOME TAX ACT EXHIBIT P3 A TRUE COPY OF THE ONLINE APPEAL DATED 19.3.2019 FILED BEFORE THE 2ND RESPONDENT EXHIBIT P4 A TRUE COPY OF THE STAY PETITION DATED 1.5.2019 FILED IN EXT P3 APPEAL EXHIBIT P5 A TRUE COPY OF THE COMMUNICATION DATED 8.11.2019 ISSUED BY THE 2ND RESPONDENT EXHIBIT P6 A TRUE COPY OF THE COMMUNICATION DATED 13.11.2019 ISSUED BY THE 2ND RESPONDENT EXHIBIT P7 A TRUE COPY OF THE COMMUNICATION ISSUED BY THE 1ST RESPONDENT DATED 15.11.2019 EXHIBIT P8 A TRUE COPY OF THE APPEAL ALONG WITH GROUNDS OF APPEAL FILED BEFORE THE 2ND RESPONDENT DATED 21.11.2019 WITH ACKNOWLEDGMENT EXHIBIT P9 A TRUE COPY OF THE STAY PETITION FILED IN EXT-P8 APPEAL DATED 21.11.2019

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