M/S.EZHUMATTOOR SERVICE CO-OPERATIVE BANK LIMITED NO.1546 vs. CENTRAL BOARD OF DIRECT TAXES(CBDT)

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WP(C)/4144/2019HC KeralaKLHC01011002201912 February 2019Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that procedural fairness demands that tax authorities should wait before taking further coercive steps until the appellate authority decides on the stay petition. The Court acknowledged that the petitioner had filed its appeal and stay petition on time. Therefore, the Court directed the respondent authorities to defer coercive steps until the third respondent (Commissioner of Income Tax (Appeals)) considers the stay petition. The Court also expressed hope that the third respondent would dispose of the stay petition expeditiously. The principle established is that authorities should not resort to coercive measures when a stay petition is pending before the appellate authority, ensuring due process.

What were the facts?

The petitioner, M/s. Ezhumattoor Service Co-operative Bank Limited, filed an appeal against an assessment order under the Income Tax Act before the Commissioner of Income Tax (Appeals), the third respondent. Along with the appeal, the petitioner also filed a stay petition. The petitioner approached the High Court through a writ petition, alleging that tax authorities were initiating coercive steps before the appellate authority could decide on the stay petition. The petitioner contended that it had exercised its statutory remedy of appeal in a timely manner and had also filed a stay petition.

What were the issues?

1. Whether the tax authorities should defer coercive steps until the appellate authority decides on the stay petition filed by the assessee? (Question of law and fact, concerning procedural fairness and the Income Tax Act). Assessee's Contention: The petitioner argued that coercive steps were being taken prematurely, before the appellate authority had an opportunity to consider its stay petition, thereby violating procedural fairness. The petitioner relied on the principle that statutory remedies should be allowed to be pursued without undue prejudice. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding this issue.

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 DAMA SESHADRI NAIDU TUESDAY ,THE 12TH DAY OF FEBRUARY 2019 / 23RD MAGHA, 1940 WP(C).No. 4144 of 2019 PETITIONER/S: M/S.EZHUMATTOOR SERVICE CO-OPERATIVE BANK LIMITED NO.1546 EZHUMATTOOR P.O, PATHANAMTHITTA-689586, REPRESENTED BY ITS SECRETARY, LALITHAMMA M.K. BY ADVS. DR.K.P.PRADEEP SMT.ANJANA KANNATH SMT.NEENA ARIMBOOR SMT.T.THASMI SRI.SANAND RAMAKRISHNAN SRI.T.T.BIJU RESPONDENT/S: 1 CENTRAL BOARD OF DIRECT TAXES(CBDT) DEPARTMENT OF REVENUE MINISTRY OF FINANCE, GOVERNMENT OF INDIA, SOUTH BLOCK, NEW DELHI-110001. REPRESENTED BY THE SECRETARY. 2 THE INCOME TAX OFFICER, INCOME TAX OFFICER, WARD-4, OFFICE OF THE ADDITIONAL COMMISSIONER OF INCME TAX, THIRUALLA RANGE, T.K. ROAD, THIRUVALLA, PATHANAMTHITTA-689101. 3 THE COMMISSIONER OF INCOME TAX(APPEALS) AAYAKAR BHAVAN, KOTTAYAM, PUBLIC LIBRARY BUILDINGS, SASTHRI ROAD, KOTTAYAM-686001. OTHER PRESENT: SRI JOSE JOSEPH, SC W.P.(C) No.4144/2019 -2- THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

J U D G M E N T The petitioner, a Co-operative Bank, questioned the Ext.P1 assessment order under the Income Tax Act, before the third respondent. The petitioner, in the appeal, filed a stay petition, too. Ventilating its grievance that the authorities are taking coercive steps before the appellate authority could consider the stay petition in the appeal, the petitioner has filed this writ petition.

2.

Heard the learned counsel for the petitioner and the learned Standing Counsel.

3.

I reckon the petitioner has exercised on time its statutory remedy of filing an appeal. It appears that it has also filed a stay petition. Procedural fairness demands that the authorities may wait, before taking further steps, until the appellate authority decides on the stay petition.

W.P.(C) No.4144/2019 -3- Therefore, I dispose of the writ petition directing the respondent authority to defer coercive steps until the third respondent considers the stay petition. I also hope that the third respondent will dispose of the stay petition expeditiously. DAMA SESHADRI NAIDU JUDGE jjj

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER NO.AAFAT6575K / 2016-17 DATED 07-12-2018, PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, BY THE INCOME TAX OFFICER, WARD-4, THIRUVALLA. EXHIBIT P2 TRUE COPY OF THE INCOME TAX APPEAL FOR THE YEAR 2016-17 DATED 10.01.2019 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. EXHIBIT P3 TRUE COPY OF THE NOTICE NO AAFAT6575K/W4/TLA/2018-19 DATED 14-01-2019 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE STAY APPLICATION DATED 7.2.2019, FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT PRAYING STAY OF RECOVERY OF THE AMOUNTS AS PER EXT-P1 ORDER.

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