KOTTAPPALLY SERVICE CO-OPERATIVE BANK LTD.NO.D-2723, vs. THE CENTRAL BOARD OF DIRECT TAXES

WP(C)/4440/2020HC KeralaKLHC01012190202017 February 2020Author: HONOURABLE MR. JUSTICE AMIT RAWAL3 pages

AI SummaryRemanded

What did the High Court hold?

The High Court directed the Commissioner of Income Tax (Appeals) (third respondent) to decide the appeal (Ext.P3) in accordance with the law. This decision is to be made after providing the petitioner an opportunity of hearing. The court specified a timeframe of three months from the date of receipt of a copy of the judgment for the disposal. Crucially, the court directed that the Commissioner should not insist on the payment of 20% of the tax demanded, referencing a circular from 2017. Furthermore, recovery proceedings pursuant to the assessment order were ordered to be kept in abeyance until a decision is taken on the appeal. The principle established is that appellate authorities should dispose of pending appeals within a reasonable time, and recovery proceedings can be stayed pending such disposal, especially when a specific circular addresses pre-deposit conditions.

What were the facts?

The petitioner, Kottappally Service Co-operative Bank Ltd., filed a writ petition before the High Court of Kerala seeking a direction to dispose of its appeal (Ext.P3) pending before the Commissioner of Income Tax (Appeals) (third respondent). The appeal was filed against an assessment order (Ext.P2). The petitioner sought a directive for the Commissioner to decide the appeal expeditiously. The respondents included the Central Board of Direct Taxes, the Income Tax Officer, and the Commissioner of Income Tax (Appeals). The assessment year(s) and the specific amount in dispute are not recorded in the judgment.

What were the issues?

1. Whether the High Court should direct the Commissioner of Income Tax (Appeals) to dispose of the pending appeal filed by the petitioner. Assessee's Contention: The petitioner sought a direction for the expeditious disposal of its appeal pending before the third respondent. The petitioner relied on a circular of 2017, implying it should not be insisted upon to pay 20% of the tax demanded for the appeal to be heard. Revenue's Contention: The judgment records that the learned counsel for both sides were heard, but it does not explicitly detail the revenue's specific arguments against the direction sought by the petitioner. However, the court's order suggests that the revenue did not oppose the direction for disposal of the appeal, subject to certain conditions.

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 AMIT RAWAL MONDAY, THE 17TH DAY OF FEBRUARY 2020 / 28TH MAGHA, 1941 WP(C).No.4440 OF 2020(D) PETITIONER/S: KOTTAPPALLY SERVICE CO-OPERATIVE BANK LTD.NO.D-2723, KOTTAPPALLY VIA, VILLYAPPALLY, KOZHIKODE-673542, REPRESENTED BY ITS SECRETARY V.ABDULLA. BY ADVS. DR.K.P.PRADEEP SMT.T.THASMI RESPONDENT/S: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110001, REPRESENTED BY ITS CHAIRMAN. 2 INCOME TAX OFFICER, WARD 2(2), AAYAKKAR BHAVAN, INCOME TAX OFFICE, MANANCHIRA, KOHIZKODE-673001. 3 COMMISSIONER OF INCOME TAX (APPEALS), KOZHIKODE, AAYAKAR BHAVAN, INCOME TAX OFFICE, MANANCHIRA, KOZHIKODE-673001. OTHER PRESENT: SRI CHRISTOPHER ABRAHAM SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.4440 OF 2020(D) 2 JUDGMENT Dated this the 17th day of February 2020 Petitioner has approached this Court seeking a direction to dispose of Ext.P3 appeal preferred before the third respondent/Commissioner of Income Tax (Appeals) against the assessment order Ext.P2. 2. Having heard the learned counsel on both sides, the writ petition is disposed of with a direction to the third respondent to take a decision on Ext.P3 appeal in accordance with law, after affording an opportunity of hearing to the petitioner, within a period of three months from the date of receipt of a copy of this judgment without insisting on payment of 20% of the tax demanded, as per circular of 2017. Till such time a decision is taken on the appeal, recovery proceedings pursuant to the assessment order shall be kept in abeyance. Sd/- AMIT RAWAL sab JUDGE WP(C).No.4440 OF 2020(D) 3 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE RETURN OF INCOME DATED 05.02.2018 FOR THE ASSESSMENT YEAR 2017- 18 IN PAN AABAK6909Q. EXHIBIT P2

OF THE ASSESSMENT ORDER NO.AABAK6909Q DATED 17.12.2019 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT. EXHIBIT P3OF THE APPEAL DATED 06.01.2020 FILED BEFORE THE 3RD RESPONDENT FOR THE YEAR 2017-18. EXHIBIT P4OF THE DEMAND NOTICE NO.PAN AABAK6909Q/2017-18 DATED 17.12.2019 FOR THE YEAR 2017-18 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P5OF THE STAY APPLICATION FILED ON 07.02.2020 BEFORE THE 3RD RESPONDENT IN EXT.P3 APPEAL.

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