THE PERINGOTTUKURUSSI SERVICE CO-OPERATIVE BANK LTD. NO.P 519, vs. THE INCOME TAX OFFICER,

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WP(C)/3329/2020HC KeralaKLHC01009315202006 February 2020Author: HONOURABLE MR. JUSTICE ALEXANDER THOMAS5 pages
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What did the High Court hold?

The High Court, following the precedent set by a Division Bench in W.A.No. 1529/2019 and a Full Bench in Mavilayi Service Co-operative Service Bank Ltd., v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287], ordered that the appellate authority shall ensure the final disposal of the petitioner's appeal (Ext.P3) without undue delay and within a reasonable time frame. Crucially, the Court directed that until final orders are passed disposing of the appeal, all coercive steps for the enforcement of the assessment order impugned in the appeal shall be kept in abeyance. The Court noted that in similar circumstances, insistence on payment of a portion of the demanded amount as a condition for stay need not be insisted upon. The writ petition was disposed of with these observations and directions.

What were the facts?

The petitioner, Peringottukrussi Service Co-operative Bank Ltd., filed a writ petition before the High Court of Kerala seeking to stay the operation of an assessment order for AY 2017-18 and to restrain coercive recovery proceedings until the disposal of its appeal (Ext.P3) before the Commissioner of Income Tax (Appeals). The petitioner also sought quashing of the demands (Ext.P5 and P2) pending the appeal. The petitioner was represented by its Secretary, and the respondents were the Income Tax Officer and the Commissioner of Income Tax (Appeals). The case was heard on February 6, 2020.

What were the issues?

1. Whether the operation of the assessment order for AY 2017-18 and further recovery should be stayed until the final disposal of the appeal before the appellate authority? (Question of law and fact, concerning the powers of the High Court under Article 226 of the Constitution and the Income Tax Act). 2. Whether coercive proceedings should be restrained until the final orders are passed in the pending appeals? (Question of law and fact, concerning the powers of the High Court and the Income Tax Act). Assessee's Contentions: The petitioner argued for a stay of recovery and coercive proceedings, citing previous judgments of the High Court. They relied on the Division Bench judgment in W.A.No. 1529/2019 and a Full Bench decision in Mavilayi Service Co-operative Service Bank Ltd., v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287]. Revenue's Contentions: The judgment records that Sri. Jose Joseph, learned Standing Counsel for the Income Tax Department, appeared for the respondents, but it does not detail any specific arguments made by 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 ALEXANDER THOMAS THURSDAY, THE 06TH DAY OF FEBRUARY 2020 / 17TH MAGHA, 1947 WP(C).No.3329 OF 2020(M) PETITIONER/S: THE PERINGOTTUKURUSSI SERVICE CO-OPERATIVE BANK LTD. NO.P 519, PARUTHIPULLY P.O., PALAKKAD DISTRICT, PIN- 678573, REPRESENTED BY ITS SECRETARY. BY ADVS. SRI.C.A.JOJO SRI.JACOB CHACKO SRI.MATHEWS JOSEPH SMT.SWATHY S. RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD 5, AYAKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD- 678014. 2 THE COMMISSIONER OF INCOAM TAX (APPEALS), AYAKAR BHAVAN, NEAR SAKTHAN STAND, THRISSUR-680001. OTHER PRESENT: SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C)No.3329/2020 2 ALEXANDER THOMAS, J. ------------------------------------------- W.P.(C)No. 3329 of 2020 ---------------------------------------------- Dated this the 6th day of February, 2020

JUDGMENT The prayers in the above Writ Petition (Civil) are as follows: “i) to stay the operation of exhibit P5 order for AY 2017-18 and further recovery till the final disposal of the Ext.P3 appeal before the 2nd respondent within a time limit. ii) to issue a writ of mandamus directing to consider the Ext.P3 appeal on merit and also restrain the respondents from initiating coercive proceedings against the petitioner society till the final orders are passed in the pending appeals. iii) to issue a writ of certiorari quashing Ext.P5 and P2 demands till the final orders are passed in Appeals. iv) to stay all coercive proceedings of recovery till the appeals are disposed of in a time frame.”

2.

Heard Sri. C.A. Jojo, learned counsel appearing for the petitioner and Sri. Jose Joseph, learned Standing Counsel for the Income Tax Department appearing for the respondents.

3.

In similar circumstances, a Division Bench of this Court in the judgment dated 1.7.2019 in W.A.No. 1529/2019 has taken the view that the insistence for payment of a portion of the amount demanded, as a condition for grant of stay, need not be insisted in cases as in the instant one and that the Division Bench, for reasons stated therein, has ordered that it is for the appellate authority to take a decision on the statutory appeal at the earliest and that until the final decision is rendered by the appellate authority in the statutory appeal, coercive steps for recovery and collection of the impugned tax shall be kept in abeyance in the light of the dictum laid down by the Full Bench of this Court in Mavilayi Service Co-operative Service Bank Ltd., v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287]. The Division Bench in the abovesaid judgment dated 1.7.2019 in W.A.No. 1529/2019 has also dealt with the reasons for taking such a view for making such an interim arrangement pending disposal of the main appeal by the statutory appellate authority concerned. The said decision of the Division Bench of this Court in W.A.No. 1529/2019 has been followed by this Court in a series of other cases as in the judgment dated 10.1.2020 in W.P.(C).No.523/2020. Accordingly, following the line of directions and orders already passed by the Division Bench of this Court in the judgment dated 1.7.2019 in W.A.No. 1529/2019 as well as various other judgments rendered by this Court, following the said directions and orders of the Division Bench in the matter of the interim arrangement till the disposal of the main statutory appeal, etc., following orders and directions are issued: It is ordered that the 1st appellate authority shall ensure final disposal of Ext.P-3 appeal after affording reasonable opportunity of being heard to the petitioner without much delay and within a reasonable time limit that may be fixed appropriately by the said appellate authority. However, in the interest of justice it is ordered that until final orders are passed disposing of Ext.P-3 appeal, all coercive steps for the enforcement of the assessment order impugned in the abovesaid appeal shall be kept in abeyance. With these observations and directions, the Writ Petition (Civil) stands finally disposed of. ALEXANDER THOMAS, JUDGE acd

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE ASSESSMENT ORDER AY 2017-18 DATED 17/12/2019 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P2 A TRUE COPY OF THE DEMAND NOTICE 2017-18 DATED 17/12/2019 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P3 A TRUE COPY OF THE APPEAL FOR AY 2017-18 DATED 15/01/2020 FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4 A TRUE COPY OF THE STATUTORY STAY PETITION DATED 17/01/2020 FILED BEFORE THE 1ST RESPONDENT. EXHIBIT P5 A TRUE COPY OF THE ORDER U/S. 220(6) DISPOSING THE STAY PETITION DATED 31/01/2020 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P6 A TRUE COPY OF THE JUDGMENT IN WA NO.1536/2019 DATED 01/07/2019.

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