POLPPULLY SERVICE CO-OPERATIVE BANK LIMITED vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/35465/2019HC KeralaKLHC01091766201920 December 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala disposed of the writ petition by directing the Commissioner of Income Tax (Appeals) to consider and pass orders on the petitioner's appeal (Ext.P2) within six months from the date of receiving a copy of the judgment. Recovery steps for the amounts confirmed by the assessment order (Ext.P1) were ordered to be kept in abeyance until the Commissioner passed and communicated the orders on the appeal. Consequently, the order Ext.P3, which directed the petitioner to remit 20% of the confirmed amounts, was quashed. The Court's reasoning was based on the fact that in similar matters, it had directed the Appellate Authority to consider appeals and stayed recovery pending disposal. The principle is that appellate remedies should be preserved, and recovery should not prejudice the assessee while the appeal is pending.

What were the facts?

The petitioner, Polpully Service Co-operative Bank Limited, filed a writ petition before the High Court of Kerala challenging an assessment order (Ext.P1) passed under the Income Tax Act. The petitioner had preferred an appeal (Ext.P2) against this order before the Commissioner of Income Tax (Appeals), the first respondent. Simultaneously, the petitioner sought a stay on recovery of disputed amounts pending the appeal's disposal under Section 220(6) of the Income Tax Act. The application for stay was disposed of by Ext.P3, directing the petitioner to remit 20% of the confirmed amounts. The issue in the appeal concerned the disallowance of deduction claimed under Section 80P of the Income Tax Act.

What were the issues?

1. Whether the recovery of amounts confirmed by the assessment order should be stayed pending the disposal of the appeal before the Commissioner of Income Tax (Appeals)? Assessee's Contention: The petitioner argued that recovery should be stayed pending the disposal of their appeal, as is the practice in similar matters. They relied on the general principle that recovery should be deferred until the appellate authority decides the appeal. Revenue's Contention: The judgment does not record any specific arguments made by the revenue regarding the stay of recovery. However, the revenue's position is implicitly represented by the impugned order Ext.P3, which directed a partial payment of 20% of the confirmed amounts.

Which sections of the Income-tax Act were involved?

Section 80P,Section 220(6)

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 FRIDAY, THE 20TH DAY OF DECEMBER 2019/29TH AGRAHAYANA, 1941 W.P(C).No.35465 OF 2019 PETITIONER: POLPPULLY SERVICE CO-OPERATIVE BANK LIMITED NO.F 1198, KALLUKUTTIYAL, POLPPULLI, PALAKKAD, PIN – 678 552, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.O.D.SIVADAS RESPONDENTS: 1.THE COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, SHAKTAN NAGAR, THRISSUR, PIN 680 001. 2.THE INCOME TAX OFFICER WARD 2, AAYKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD, PIN 678 014. BY SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.35465/2019 :: 2 ::

J U D G M E N T Against Ext.P1 assessment order under the Income Tax Act, the petitioner has preferred Ext.P2 appeal before the 1st respondent. In the meanwhile, the petitioner also sought for an order under Section 220(6) of the Income Tax Act for staying the recovery pending disposal of the appeals. The said application was disposed by Ext.P3 order that directed the petitioner to remit 20% of the amounts confirmed against him pending disposal of the appeal. 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 W.P.(C).No.35465/2019 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 by directing the 1st respondent to consider and pass orders on Ext.P2 appeal within an outer time limit of six months from the date of receipt of a copy of this judgment. Recovery steps for recovery of amounts confirmed against the petitioner by Ext.P1 assessment order shall be kept in abeyance till such time as orders are passed by the 1st respondent as directed above and communicated to the petitioner. In view of the directions issued above, Ext.P3 order stands quashed. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 1st respondent, for further action. A.K.JAYASANKARAN NAMBIAR JUDGE prp/20/12/19

W.P.(C).No.35465/2019

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE ASSESSMENT ORDER DATED 26.12.2018 ISSUED BY THE 2ND RESPONDENT FOR THE PERIOD 2016-17. EXT.P2: COPY OF THE APPEAL DATED 23.01.2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE PERIOD 2016-17. EXT.P3: COPY OF THE ORDER PROCEEDING DATED 09.12.2019 ISSUED BY THE 2ND RESPONDENT. RESPONDENTS EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE

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