THE AKATHETHARA SERVICE CO-OPERATIVE BANK LIMITED, vs. THE INCOME TAX OFFICER,

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WP(C)/32533/2019HC KeralaKLHC01084922201902 December 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court quashed the conditional stay order (Ext.P4) passed by the 2nd respondent. The Court directed the 2nd respondent 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, after hearing the petitioner. Recovery steps for the amounts confirmed against the petitioner by the assessment order were to be kept in abeyance until the 2nd respondent passed orders on the appeal and communicated them to the petitioner. The reasoning was based on the Division Bench judgment cited by the petitioner, which advocated for considering appeals without insisting on pre-deposit in similar Section 80P deduction cases. The principle is that appellate authorities should not impose onerous conditions for stay when there is a strong prima facie case or precedent suggesting otherwise.

What were the facts?

The petitioner, The Akathethara Service Co-operative Bank Limited, filed a writ petition challenging a conditional stay order (Ext.P4) issued by the Commissioner of Income Tax (Appeals) (2nd respondent). The petitioner had appealed an assessment order (Ext.P1) passed by the Income Tax Officer (1st respondent) under the Income Tax Act. The conditional stay order was in relation to the appeal filed against the assessment order. The petitioner contended that in similar cases concerning deductions under Section 80P of the Income Tax Act, a Division Bench of the High Court had directed the appellate authority to decide appeals without insisting on pre-deposit for stay of recovery.

What were the issues?

1. Whether the 2nd respondent (Commissioner of Income Tax (Appeals)) erred in imposing a condition for stay of recovery of amounts confirmed against the petitioner, when the appeal pertains to deductions under Section 80P of the Income Tax Act? Assessee's Contention: The petitioner argued that in identical cases involving Section 80P deductions, the High Court had directed the appellate authority to consider appeals without demanding pre-deposit for stay. They relied on a Division Bench judgment dated 19.07.2019 in W.A.No.1649 of 2019 and connected cases (Ext.P5). Revenue's Contention: The judgment records no specific arguments made by the revenue.

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 02ND DAY OF DECEMBER 2019 / 11TH AGRAHAYANA, 1941 WP(C).No.32533 OF 2019(N) PETITIONER: THE AKATHETHARA SERVICE CO-OPERATIVE BANK LIMITED, NO.F-1514, AKATHETHARA P.O., PALAKKAD - 678 008, REPRESENTED BY ITS SECRETARY, SUBHA VARMA P., AGED 52, S/O.V.K.PRABHAKARA VARMA. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SMT.K.KRISHNA RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD I AND TPS, AYAKAR BHAVAN, PALAKKAD - 678 014. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR - 680 021. BY ADV. SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.12.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.32533 OF 2019(N) 2

JUDGMENT Against Ext.P1 assessment order under the Income Tax Act, the petitioner has preferred Ext.P2 appeal before the 2nd respondent. Along with the appeal the petitioner had also preferred stay petition, which came to be disposed by Ext.P4 conditional stay order passed by the 2nd respondent. It is the case of the petitioner that in identical cases involving the deduction under Section 80P of the Income Tax Act a Division Bench of this Court has in the judgment dated 19.07.2019 in W.A.No.1649 of 2019 and connected cases (Ext.P5) directed the 1st appellate authority to consider and pass orders in the appeal without insisting on any pre-deposit as a condition for stay of recovery of the balance amounts confirmed against the assessee.

2.

I have heard the learned counsel appearing for the petitioner as also the learned Standing counsel appearing for the Income Tax Department.

3.

On a consideration of the facts and circumstances of the case as also the submissions made across the bar and taking note of the Division Bench judgment referred above, I dispose the Writ Petition by WP(C).No.32533 OF 2019(N) 3 quashing Ext.P4 conditional stay order and directing the 2nd 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, after hearing the petitioner. Recovery steps for recovery of amounts confirmed against the petitioner by the assessment order shall be kept in abeyance till such time as orders are passed by the 2nd respondent as directed and communicated to the petitioner. A.K.JAYASANKARAN NAMBIAR

JUDGE mns

WP(C).No.32533 OF 2019(N) 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2016-17 DATED 26.12.2018. EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2016-17 DATED 16.01.2019. EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2016- 17 DATED 15.01.2019. EXHIBIT P4 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DATED 07.11.2019. EXHIBIT P5 COPY OF JUDGMENT IN W.A.NO.1649/2019 OF THIS HON'BLE COURT DATED 19.07.2019. EXHIBIT P6 COPY OF JUDGMENT IN W.P.(C) NOS.21015 & 20995/2019 OF THIS HON'BLE COURT DATED 19.08.2019. EXHIBIT P6 A COPY OF JUDGMENT IN W.P.(C) NO.22496/2019 OF THIS HON'BLE COURT DATED 19.08.2019. RESPONDENTS EXHIBITS:NIL //TRUE COPY// P.A TO JUDGE

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