CHOMBAL SERVICE CO-OPERATIVE BANK LTD NO. 1478 vs. THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE

WP(C)/3715/2020HC KeralaKLHC01010494202011 February 2020Author: HONOURABLE MR. JUSTICE AMIT RAWAL3 pages

AI SummaryRemanded

What did the High Court hold?

The High Court directed the third respondent, the Commissioner of Income Tax (Appeals), to decide the appeal (Ext.P3) within a period of three months from the date of receipt of a copy of the judgment. This decision is to be made in accordance with the law, after providing the petitioner an opportunity of hearing. Crucially, the Court directed that the disposal should be done without insisting on the payment of 20% of the tax demanded, referencing a circular from 2017. Furthermore, the Court ordered that recovery proceedings pursuant to the assessment order shall be kept in abeyance until a decision is taken on the appeal. The principle established is that appellate authorities should dispose of pending appeals expeditiously, and recovery proceedings can be stayed pending such disposal, especially when a relevant circular permits waiver of pre-deposit conditions.

What were the facts?

The petitioner, Chombal Service Co-operative Bank Ltd, filed a writ petition before the High Court of Kerala seeking a direction for the disposal of its appeal and stay petition. These were filed before the Commissioner of Income Tax (Appeals) against an assessment order. The petitioner sought a direction to dispose of Ext.P3 appeal or Ext.P5 stay petition, which were pending before the third respondent (Commissioner of Income Tax (Appeals)). The assessment order was Ext.P2. The respondents were the Central Board of Direct Taxes, the Income Tax Officer, Ward 2(2), and the Commissioner of Income Tax (Appeals). The writ petition was filed in February 2020.

What were the issues?

1. Whether the High Court should direct the Commissioner of Income Tax (Appeals) to dispose of the pending appeal and stay petition filed by the petitioner? Assessee's Contention: The petitioner sought a direction for the disposal of its appeal (Ext.P3) and stay petition (Ext.P5) before the Commissioner of Income Tax (Appeals) against the assessment order (Ext.P2). The petitioner implicitly sought expeditious disposal and relief from recovery proceedings. Revenue's Contention: The judgment does not record any specific contentions from the revenue. However, the court's direction to dispose of the appeal without insisting on 20% of the tax demanded suggests that the revenue might have been insisting on this condition for granting a stay or proceeding with the appeal.

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 TUESDAY, THE 11TH DAY OF FEBRUARY 2020 / 22ND MAGHA, 1941 WP(C).No.3715 OF 2020(L) PETITIONER/S: CHOMBAL SERVICE CO-OPERATIVE BANK LTD NO. 1478 CHOMBAL POST, VADAKARA, KOZHIKODE-673308, REPRESENTED BY ITS SECRETARY SUNEESH P.V. BY ADV. DR.K.P.PRADEEP 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, KOZHIKODE-673 001. 3 COMMISSIONER OF INCOME TAX (APPEALS), KOZHIKODE , AAYAKAR BHAVAN, INCOME TAX OFFICE, MANANCHIRA, KOZHIKODE-673 001. OTHER PRESENT: SC CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.3715 OF 2020(L) 2

JUDGMENT Petitioner has approached this Court seeking a direction to dispose of Ext.P3 appeal or Ext.P5 stay petition 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. AMIT RAWAL sab JUDGE

WP(C).No.3715 OF 2020(L) 3 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE RETURN OF INCOME DATED 2.11.2017 FOR THE ASSESSMENT YEAR 2017-18 IN PAN AAAAT6777E EXHIBIT P2OF THE ASSESSMENT ORDER NO AAAAT6777E DATED 17.12.2019 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT EXHIBIT P3OF THE APPEAL DATED 7.1.2020 FILED BEFORE THE 3RD RESPONDENT FOR THE YEAR 2017018 EXHIBIT P4OF THE DEMAND NOTICE NO PAN AAAT6777E/2017 18 DATED 17.12.2019 FOR THE YEAR 2017-18 ISSUED BY THE 2ND RESPONDENT EXHIBIT P5OF THE STAY APPLICATION FILED ON 17.1.2020 BEFORE THE 3RD RESPONDENT IN EXT P3 APPEAL

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