VAIPUR SERVICE CO-OPERATIVE BANK LIMITED A-203 III/395, vs. CENTRAL BOARD OF DIRECT TAXES(CBDT),

WP(C)/4140/2019HC KeralaKLHC01010885201912 February 2019Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU3 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the petitioner had exercised its statutory remedy by filing an appeal and a stay petition in a timely manner. The Court recognized that procedural fairness requires tax authorities to wait before taking further coercive steps until the appellate authority has had the chance to decide on the stay petition. Consequently, the writ petition was disposed of with a direction to the respondent authority to defer coercive steps until the third respondent (Commissioner of Income Tax (Appeals)) considers the stay petition. The Court also expressed hope that the stay petition would be disposed of expeditiously.

What were the facts?

The petitioner, Vaipur Service Co-operative Bank Limited, filed an appeal against an assessment order under the Income Tax Act before the third respondent, the Commissioner of Income Tax (Appeals). Along with the appeal, the petitioner also filed a stay petition. The petitioner approached the High Court of Kerala through a writ petition, alleging that tax authorities were initiating coercive steps before the appellate authority could decide on the stay petition filed in the appeal. The petitioner sought intervention to prevent such actions.

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 procedure and fairness) The petitioner argued that it had exercised its statutory remedy by filing an appeal and a stay petition on time. It contended that procedural fairness dictates that coercive steps should not be taken before the appellate authority has had an opportunity to rule on the stay application. The petitioner sought the court's intervention to ensure that its appeal and stay petition are considered before any enforcement action is initiated. The revenue's contentions are not recorded in the judgment.

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. 4140 of 2019 PETITIONER/S: VAIPUR SERVICE CO-OPERATIVE BANK LIMITED A-203 III/395, VAIPUR, PATHANAMTHITTA-689 588, REPRESENTED BY ITS SECRETARY, MUHAMMED ISMAIL. 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-110 001, REPRESENTED BY THE SECRETARY. 2 THE INCOME TAX OFFICER, INCOME TAX OFFICER, WARD -4 , OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, THIRUVALLA RANGE, T.K. ROAD, THIRUVALLA, PATHANAMTHITTA-689 101. 3 THE COMMISSIONER OF INCOME TAX (APPEALS), AAYAKAR BHAVAN, KOTTAYAM PUBLIC LIBRARY BUILDINGS, SASTHRI ROAD, KOTTAYAM -686 001. OTHER PRESENT: SRI JOSE JOSEPH, SC W.P.(C) No.4140/2019 -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.

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

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.4140/2019 -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. AAAAT6880E/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 AAAAT6880E/W- 4/TLA/2018-19 DATED 15.01.2019 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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