THIRUVANANTHAPURAM DISTRICT COOPERATIVE BANK LTD. vs. COMMISSIONER OF INCOME TAX

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WP(C)/34191/2018HC KeralaKLHC01078292201829 October 2018Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the demand of Rs. 3,67,05,090/- as a pre-condition for hearing the appeal could not be sustained. The Court noted that the petitioner had already deposited over 33% of the demand, which is in excess of the 20% required as a pre-condition according to the Ext.P9 departmental instructions. Therefore, the Ext.P10 order demanding the higher pre-deposit was set aside. The appellate authority was directed to decide the petitioner's appeal on merits expeditiously. The principle established is that if an assessee has complied with the pre-deposit requirement as per departmental instructions, a higher pre-deposit should not be demanded as a condition for hearing the appeal.

What were the facts?

The petitioner, Thiruvananthapuram District Co-operative Bank Ltd., is challenging an Income Tax assessment order for the assessment year 2009-2010. After filing an appeal and a stay petition against the assessment order, the petitioner had remitted 33.8% of the total demand. However, the appellate authority issued an order demanding a pre-condition deposit of Rs. 3,67,05,090/- out of a total demand of Rs. 5,54,65,330/-. This demand was assailed by the petitioner in the present writ petition.

What were the issues?

1. Whether the demand of Rs. 3,67,05,090/- as a pre-condition for hearing the appeal is sustainable, given the departmental instructions and the amount already paid by the assessee? (Question of law and fact, concerning the interpretation and application of departmental instructions and the principles of pre-deposit for appeals). Assessee's Contention: The petitioner argued that they had already paid over 33% of the total demand, which exceeds the 20% stipulated in the Ext.P9 Office Memorandum as a sufficient pre-deposit for an appeal. Revenue's Contention: The learned Standing Counsel for the revenue agreed that the petitioner had deposited over 33% of the demand.

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 MONDAY ,THE 29TH DAY OF OCTOBER 2018 / 7TH KARTHIKA, 1940 WP(C).No. 34191 of 2018 PETITIONER/S: THIRUVANANTHAPURAM DISTRICT COOPERATIVE BANK LTD. REPRESENTED BY ITS GENERAL MANAGER, S.KUMAR, S/O SREEDHARAN NAIR, SANKAR, SWATHI NAGAR, PEROORKADA PO, THIRUVANANTHAPURAM 695005 BY ADV. MARY BENJAMIN RESPONDENT/S: 1 COMMISSIONER OF INCOME TAX (APPEALS-1), DEPARTMENT OF INCOME TAX, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM 695003 2 DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1) TRIVANDRUM OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE2(1) RANGE-2, TRIVANDRUM, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM-695003. BY ADVS. SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.10.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.34191/2018 -2-

J U D G M E N T The petitioner is a Co-operative Bank, and the dispute concerns the Income Tax assessment for the year 2009-2010. Against the Ext.P5 assessment order, the petitioner filed the Ext.P7 appeal and the Ext.P8 stay petition. By then the petitioner remitted 33.8% of the total demand. Nevertheless the appellate authority issued the Ext.P10, demanding the petitioner to deposit, as a pre- condition, Rs.3,67,05,090/-, out of Rs.5,54,65,330/-. Assailing the Ext.P10, the petitioner has filed this writ petition.

2.

The petitioner's counsel has contended that the petitioner has already paid over 33%, whereas the Ext.P9 Office Memorandum mandates that it will suffice if the assessee in appeal pays 20%.

3.

The learned Standing Counsel also agrees that the petitioner did deposit over 33%. In the light of the Ext.P9 departmental instructions requiring the appellant to pay 20% of the W.P.(C) No.34191/2018 -3- demand as precondition, I reckon the Ext.P10 cannot be sustained. Accordingly, I set it aside. The appellate authority will decide the petitioner's appeal on merits, expeditiously. Thus I dispose of the writ petition. DAMA SESHADRI NAIDU JUDGE jjj

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 27/12/2011 ISSUED TO THE PETITIONER. EXHIBIT P2 TRUE COPY OF SUBMISSION DATED 19/12/2013 SUBMITTED BEFORE THE 1ST RESPONDENT BY THE PETITIONER. EXHIBIT P3 TRUE COPY OF THE ORDER DATED 03/01/2014, PASSED BY THE 1ST RESPONDENT. EXHIBIT P4 TRUE COPY OF THE ASSESSMENT ORDER DATED 28/03/2015. EXHIBIT P5 TRUE COPY OF THE ORDER DATED 05/05/2017. W.P.(C) No.34191/2018 -4- EXHIBIT P6 TRUE COPY OF THE DEMAND NOTICE DATED 05/05/2017. EXHIBIT P7 TRUE COPY OF THE APPEAL DATED 12/06/2017. EXHIBIT P8 TRUE COPY OF THE STAY PETITION DATED 27/09/2018. EXHIBIT P9 TRUE COPY OF THE CIRCULAR DATED 31/07/2017. EXHIBIT P10 TRUE COPY OF THE PROCEEDINGS DATED 13/09/2018 OF THE 2ND RESPONDENT. EXHIBIT P11 TRUE COPY OF THE REPRESENTATION SUBMITTED BEFORE ETHE 2ND RESPONDENT BY THE PETITIONER.

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