M/S. KALLETTUMKARA SERVICE CO-OPERATIVE BANK LIMITED vs. THE INCOME TAX OFFICER

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WP(C)/25002/2019HC KeralaKLHC01064711201920 September 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI15 pages
AI SummaryRemanded

What did the High Court hold?

The High Court found that the Commissioner of Income Tax (Appeals), in passing Ext.P4, had not exercised the discretion and power independently available to him under Section 251(1)(c) of the Income Tax Act, 1961. Instead, the Commissioner's action was more in the nature of advice, disposing of the stay applications without proper deliberation. The Court was convinced by the alternative submission of the revenue. Consequently, Ext.P4 was set aside. The matter was remitted back to the second respondent (Commissioner of Income Tax (Appeals)) for consideration and disposal of the stay petitions (Ext.P3) in all the writ petitions. The Court directed that this disposal should preferably be done within two months from the date of receipt of a copy of the judgment. Additionally, a stay of coercive steps against the recovery of amounts impugned in the respective appeals was granted for ten weeks from the date of the judgment. The Court expressly did not decide on the merits of the stay applications themselves, only on the procedural impropriety of the Commissioner's initial disposal.

What were the facts?

The petitioner, M/s. Kallettumkara Service Co-operative Bank Limited, filed multiple writ petitions challenging an order (Ext.P4) passed by the Commissioner of Income Tax (Appeals), the second respondent. The petitioner argued that this order illegally refused to exercise jurisdiction conferred by Section 251(1)(c) of the Income Tax Act, 1961. The impugned order, dated August 29, 2019, disposed of five stay petitions filed by the petitioner. The petitioner contended that the Commissioner should have exercised his appellate powers under Section 251(1)(c) and granted a stay pending appeal, rather than directing the petitioner to file a stay petition before the Assessing Officer under Section 220(6). The assessment years for these appeals were not explicitly stated but were described as separate for each petition.

What were the issues?

1. Whether the Commissioner of Income Tax (Appeals) illegally refused to exercise jurisdiction conferred by Section 251(1)(c) of the Income Tax Act, 1961, by directing the assessee to file a stay petition before the Assessing Officer instead of deciding the stay application pending appeal. Assessee's Contentions: - The remedies under Section 220(6) and Section 251(1)(c) of the Income Tax Act are independent. - Having availed the remedy of appeal under Section 246, the Commissioner ought to have exercised his jurisdiction under Section 251(1)(c) and passed appropriate orders, including granting a stay, considering the grounds raised against the assessment orders. - The Commissioner should not have compelled the petitioner to move an application under Section 220(6). - Relied on the Full Bench judgment of the Kerala High Court in Mavilayi Service Co-operative Bank v. Commissioner of Income Tax [2019 (2) KLT 597 (F.B.)]. Revenue's Contentions: - The impugned order should not be treated as a refusal to grant stay or a direction to deposit amounts contrary to the merits or established principles. - The Commissioner merely pointed out the first available option. - Alternatively, if the petitioner was not convinced, the Revenue had no objection to the Commissioner reconsidering the stay request and passing orders in accordance with law.

Which sections of the Income-tax Act were involved?

Section 251(1)(c),Section 220(6),Section 246

AI-generated summary — verify with the full judgment below

Heard together (5 matters)

WP(C).No.24983 OF 2019
WP(C).24999/2019
WP(C).25002/2019
WP(C).25021/2019
WP(C).25023/2019

Read from the judgment's own cause title. This page is filed under one of them.

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI FRIDAY, THE 20TH DAY OF SEPTEMBER 2019 / 29TH BHADRA, 1941 WP(C).No.24983 OF 2019(W) PETITIONER: M/S. KALLETTUMKARA SERVICE CO-OPERATIVE BANK LIMITED KALLETTUMKARA, THRISSUR-680683 REPRESENTED BY ITS SECRETARY MRS.DAISY.E.P. BY ADVS. SRI.ANIL D. NAIR SRI.R.SREEJITH SMT. ARYA ANIL SHRI.GOKULRAJ L. SMT.SRI HARINI S.P. RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD-2(2),THRISSUR - 680 001 2 THGE COMMISSIONER OF INCOME TAX(APPEALS), 3RD FLOOR,AAYKAR BHAVAN,THRISSUR-680001. BY SRI. NAVNEETH N NATH FOR SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.09.2019, ALONG WITH WP(C).24999/2019(Y), WP(C).25002/2019(A), WP(C).25021/2019(C), WP(C).25023/2019(C), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.24983 OF 2019(W)& connected cases. 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI FRIDAY, THE 20TH DAY OF SEPTEMBER 2019 / 29TH BHADRA, 1941 WP(C).No.24999 OF 2019(Y) PETITIONER: M/S. KALLETTUMKARA SERVICE CO-OPERATIVE BANK LIMITED KALLETTUMKARA, THRISSUR-680683, REPRESENTED BY ITS SECRETARY MRS.DAISY E.P. BY ADVS. SRI.ANIL D. NAIR SRI.SREEJITH R.NAIR SMT. ARYA ANIL SHRI.GOKULRAJ L. SMT.SRI HARINI S.P. RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-2(2), THRISSUR-680001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), 3RD FLOOR, AAYKAR BHAVAN, THRISSUR-680001. BY SRI. NAVNEETH N NATH FOR SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.09.2019, ALONG WITH WP(C).24983/2019(W), WP(C).25002/2019(A), WP(C).25021/2019(C), WP(C).25023/2019(C), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.24983 OF 2019(W)& connected cases. 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI FRIDAY, THE 20TH DAY OF SEPTEMBER 2019 / 29TH BHADRA, 1941 WP(C).No.25002 OF 2019(A) PETITIONER: M/S. KALLETTUMKARA SERVICE CO-OPERATIVE BANK LIMITED KALLETTUMKARA, THRISSUR-680683, REPRESENTED BY ITS SECRETARY MRS.E.P.DAISY. BY ADVS. SRI.ANIL D. NAIR SRI.SREEJITH R.NAIR SMT. ARYA ANIL SHRI.GOKULRAJ L. SMT.SRI HARINI S.P. RESPONDENTS: 1 THE INCOME TAX OFFICER WARD -2(2)., THRISSUR-680001. 2 THE COMMISSIONER OF INCOME TAX(APPEALS), 3RD FLOOR, AAYKAR BHAVAN, THRISSUR-680001. BY SRI. NAVNEETH N NATH FOR SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.09.2019, ALONG WITH WP(C).24983/2019(W), WP(C).24999/2019(Y), WP(C).25021/2019(C), WP(C).25023/2019(C), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.24983 OF 2019(W)& connected cases. 4 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI FRIDAY, THE 20TH DAY OF SEPTEMBER 2019 / 29TH BHADRA, 1941 WP(C).No.25021 OF 2019(C) PETITIONER: M/S. KALLETTUMKARA SERVICE CO-OPERATIVE BANK LIMITED KALLETTUMKARA, THRISSUR-680683, REPRESENTED BY ITS SECRETARY MRS.DAISY E.P. BY ADVS. SRI.ANIL D. NAIR SRI.SREEJITH R.NAIR SMT. ARYA ANIL SHRI.GOKULRAJ L. SMT.SRI HARINI S.P. RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-2 (2), THRISSUR-680 001. 2 THE COMMISSIONER OF INCOME TAX(APPEALS) 3RD FLOOR, AAYKAR BHAVAN, THRISSUR-680 001. BY SRI. NAVNEETH N NATH FOR SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.09.2019, ALONG WITH WP(C).24983/2019(W), WP(C).24999/2019(Y), WP(C).25002/2019(A), WP(C).25023/2019(C), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.24983 OF 2019(W)& connected cases. 5 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI FRIDAY, THE 20TH DAY OF SEPTEMBER 2019 / 29TH BHADRA, 1941 WP(C).No.25023 OF 2019(C) PETITIONERS: M/S. KALLETTUMKARA SERVICE CO-OPERATIVE BANK LIMITED KALLETTUMKARA, THRISSUR-680 683, REPRESENTED BY ITS SECRETARY MRS. DAISY E.P. BY ADVS. SRI.ANIL D. NAIR SMT. ARYA ANIL SHRI.GOKULRAJ L. SMT.SRI HARINI S.P. RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-2 (2), THRISSUR-680 001 2 THE COMMISSIONER OF INCOME TAX (APPEALS) 3RD FLOOR, AAYKAR BHAVAN, THRISSUR-680 001 BY SRI. NAVNEETH N NATH FOR SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.09.2019, ALONG WITH WP(C).24983/2019(W), WP(C).24999/2019(Y), WP(C).25002/2019(A), WP(C).25021/2019(C), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.24983 OF 2019(W)& connected cases. 6

JUDGMENT [ W.P.(C.)24983/2019, W.P.(C.)24999/2019, W.P.(C.)25002/2019, W.P.(C.)25021/2019 & W.P.(C.).25023/2019 ] Heard Sri. Anil D Nair, the learned counsel for the petitioner and Sri. Navaneeth N. Nath holding for Sri. Jose Joseph, the learned Standing Counsel.

2.

The petitioner is same in all these writ petitions. The circumstances and text of the orders impugned in the writ petitions are also same and similar except that the independent orders are passed for separate assessment years.

3.

The petitioner challenges Ext.P4 order of the second respondent as illegal and amounts to refusing to exercise the jurisdiction conferred on the second respondent under Section 251(1)(c) of the Income Tax Act, 1961 (for short 'the I.T. Act'). The operative portion of Ext.P4 common order reads thus:-

WP(C).No.24983 OF 2019(W)& connected cases. 7 "

2.

The authorised representative stated that no stay petitions have been filed before the assessing officer for all these years. In this circumstances, the appellant is directed to file stay petition before Assessing Officer to get suitable remedy.

3.

All the five stay petition of the appellant are disposed of accordingly."

4.

Sri. Anil D. Nair contends that the remedies available to the assessee under Section 220(6) and Section 251(1)(c) of the I. T. Act are independent. The petitioner assessee has the discretion and liberty to avail one of the remedies of appeal. Having already availed the remedy of appeal under Section 246 of the I. T. Act, the second respondent ought to have exercised the jurisdiction and discretion, passed orders as are warranted, keeping in view the grounds raised by the petitioner against the orders of assessment impugned in the appeal. The petitioner draws the attention of the Court to the Full Bench judgment of this Court in the Mavilayi Service Co-operative Bank v. Commissioner of Income Tax [2019 (2) KLT

WP(C).No.24983 OF 2019(W)& connected cases. 8 597 (F.B.)] and prays for granting stay pending appeal to the petitioner. The second respondent ought not to have compelled the petitioner to move an application under Section 220(6) of the I. T. Act.

5.

Adv. Navaneeth N. Nath, submits that Ext.P4 shall not be treated as an order refusing to grant stay or calling upon the petitioner to deposit amount contrary to the merits stated in the memorandum of appeal or the principle laid down by this Court in the Full Bench judgment referred to above. According to him, the second respondent reminds the first option available and issue ought not to be raised by filing the writ petitions. He alternatively contends that, if the petitioner is not convinced with the conclusion in Ext.P4, the second respondent does not have objection to reconsider the request of petitioner for grant of stay made in Ext.P3 and pass orders in accordance with law.

6.

I have taken note of the limited submissions made by learned counsel appearing for the parties and perused the record.

WP(C).No.24983 OF 2019(W)& connected cases. 9

7.

The operative portion of Ext.P4 is already excerpted in the preceding paragraph. Perusal of excerpted portion shows that the second respondent instead of exercising the discretion and power independently available to him under Section 251(1)(c) of the I. T. Act, more in the nature of an advice disposed of the stay applications vide order dated 29.08.2019 in Ext.P4. Without much deliberation, it can be recorded that the said exercise of jurisdiction or discretion by the second respondent is not within the square where discretion and jurisdiction are vested with him.

8.

This Court is convinced by the alternative submission made by the learned counsel appearing for the respondents. Hence, Ext.P4 common order is set aside. The matter is remitted to second respondent for consideration and disposal of Ext. P3 stay petitions in all the writ petitions preferably within two months from the date of receipt of a copy of the judgment. There shall be stay of coercive steps against recovery of WP(C).No.24983 OF 2019(W)& connected cases. 10 amount which is impugned in the respective appeals for ten weeks from today. The writ petitions are disposed of. S.V.BHATTI JUDGE DCS

WP(C).No.24983 OF 2019(W)& connected cases. 11

Appendix — schedule of exhibits
APPENDIX OF WP(C) 24983/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 08.12.2016 FOR A.Y.2009-10 ISSUED TO THE PETITIONER BY THE 1ST RESPONDENT. EXHIBIT P2 TRUE COPY OF THE APPEAL FILED BEFORE THE 2ND RESPONDENT EXHIBIT P3 TRUE COPY OF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 29.08.2019 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT EXHIBIT P5 TRUE COPY OF JUDGMENT IN W.A.2146/18 DATED 2.11.2018 PASSED BY THE HON'BLE HIGH COURT IN PETITIONER'S OWN CASE FOR THE ASSESSMENT YEAR 2008-09. WP(C).No.24983 OF 2019(W)& connected cases. 12 APPENDIX OF WP(C) 24999/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 30.11.2018 FOR THE A.Y. 2011-12 ISSUED TO THE PETITIONER BY THE 1ST RESPONDENT. EXHIBIT P2 TRUE COPY OF THE APPEAL FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 29.08.2019 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT. EXHIBIT P5 TRUE COPY OF THE JUDGMENT DATED 2.11.2018 IN PETITIONER'S OWN CASE FOR THE A.Y. 2008- 09. WP(C).No.24983 OF 2019(W)& connected cases. 13 APPENDIX OF WP(C) 25002/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER FOR THE A.Y.2014-15 DATED 08.12.2016 UNDER SEC.143(3)R.W.S.147 OF THE INCOME TAX ACT EXHIBIT P2 TRUE COPY OF THE APPEAL FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 29.08.2019 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT EXHIBIT P5 TRUE COPY OF THE JUDGMENT DATED 2.11.2018 PASSED BY THE HON'BLE HIGH COURT IN PETITIONER'S OWN CASE FOR THE ASSESSMENT YEAR 2008-09 ALONG WITH COVERING LETTER. WP(C).No.24983 OF 2019(W)& connected cases. 14 APPENDIX OF WP(C) 25021/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF ASSESSMENT ORDER DATED 9.11.2017 FOR THE ASSESSMENT YEAR 2010-11. EXHIBIT P2 TRUE COPY OF THE APPEAL FIELD BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 29.8.2019 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT. EXHIBIT P5 TRUE COPY OF JUDGMENT DATED 2.11.2018 PASSED BY THE HON'BLE HIGH COURT IN PETITIONERS OWN CASE FOR THE ASSESSMENT YEAR 2008-09. WP(C).No.24983 OF 2019(W)& connected cases. 15 APPENDIX OF WP(C) 25023/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 24.11.2018 FOR THE A.Y. 2016-17 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT. EXHIBIT P2 TRUE COPY OF THE APPEAL FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE ORDER DATED 29.08.2019 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 29.08.2019 ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT. EXHIBIT P5 TRUE COPY OF THE JUDGMENT IN WA 2146/18 DATED 2.11.2018 IN PETITIONER'S OWN CASE FOR THE A.Y. 2008-09.

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