THAIKKAD SERVICE CO-OPERATIVE BANK LTD vs. INCOME TAX OFFICER

WP(C)/16747/2017HC KeralaKLHC01064694201723 May 2017Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR5 pages

AI SummaryRemanded

What did the High Court hold?

The High Court quashed the impugned order (Ext.P4) passed by the Income Tax Officer. The Court directed the Commissioner of Income Tax (Appeals) to dispose of the appeal (Ext.P2) after hearing the petitioner. Crucially, the Court ordered that recovery steps for the amounts confirmed by the assessment order (Ext.P1) would be kept in abeyance until the Commissioner of Income Tax (Appeals) passed orders on the appeal and communicated them to the petitioner. The reasoning was based on the fact that the petitioner had filed an appeal and sought a stay, and the court was providing interim relief pending the appellate decision. The pendency of an SLP before the Supreme Court did not, in this instance, lead to the dismissal of the writ petition or the upholding of the stay condition. The operative direction was to quash the stay order and direct the appellate authority to decide the appeal expeditiously, keeping recovery in abeyance.

What were the facts?

The petitioner, Thaikkad Service Co-operative Bank Ltd., filed a writ petition challenging an order (Ext.P4) passed by the respondent Income Tax Officer. This order directed the petitioner to pay 15% of the amounts confirmed in the assessment order (Ext.P1) for Assessment Year 2008-09 as a condition for a stay of recovery of the balance amounts pending appeal. The petitioner had filed an appeal (Ext.P2) before the Commissioner of Income Tax (Appeals) against the assessment order and also sought a stay of recovery from the Income Tax Officer. The petitioner's challenge to Ext.P4 was based on the ground that the issue in appeal was covered in their favour by a Division Bench judgment of the Kerala High Court. The Revenue, represented by the Standing Counsel, submitted that an SLP was pending before the Supreme Court against the said Division Bench judgment.

What were the issues?

1. Whether the Income Tax Officer was justified in demanding 15% of the confirmed demand as a condition for stay of recovery, when the issue in appeal was allegedly covered by a High Court judgment in favour of the assessee? The assessee contended that the issue involved in their appeal before the Commissioner of Income Tax (Appeals) was covered in their favour by a Division Bench judgment of the Kerala High Court. Therefore, the condition imposed for stay of recovery was unwarranted. The revenue, through its Standing Counsel, submitted that against the favourable Division Bench judgment relied upon by the assessee, the Department had filed a Special Leave Petition (SLP) before the Supreme Court, and the SLP was pending. No other specific arguments were recorded for the revenue regarding the merits of the stay order.

Which sections of the Income-tax Act were involved?

None explicitly mentioned in the judgment text provided.

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP(C).No. 16747 of 2017

W.P.(C) NO.14545 OF 2017

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

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR TUESDAY, THE 23RD DAY OF MAY 2017/2ND JYAISHTA, 1939 WP(C).No. 16747 of 2017 (P) ---------------------------- PETITIONER: ---------- THAIKKAD SERVICE CO-OPERATIVE BANK LTD, NO.8/33, BRAHMAKULAM P.O., THAIKKAD, THRISSUR-680104 REPRESENTED BY ITS BRANCH MANAGER, MR.C.K.SADANANDAN

BY ADVS.SRI.ANIL D. NAIR SRI.R.SREEJITH SRI.P.JINISH PAUL KUM.MEKHALA M.BENNY SRI.JOSEPH GOPURAN RESPONDENT: ----------- INCOME TAX OFFICER, WARD-2, GURUVAYOOR, THRISSUR-680101

BY ADV. SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23-05-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.V.

WP(C).No. 16747 of 2017 (P) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS ----------------------- EXHIBIT P1 TRUE COPY OF ASSESSMENT ORDER DATED 19.12.2016 FOR THE ASSESSMENT YEAR 2008-09

EXHIBIT P2 TRUE COPY OF THE APPEAL MEMORANDUM FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2008-09

EXHIBIT P3 TRUE COPY OF THE STAY PETITION FILED BEFORE THE RESPONDENT FOR THE ASSESSMENT YEAR 2008-09

EXHIBIT P4 TRUE COPY OF THE ORDER NO.AABAT7278H/ITO/WARD- 2/GVR/16-17 DATED 30.03.2017

EXHIBIT P5 TRUE COPY OF OFFICE MEMORANDUM (F.NO.404/72/93-ITCC) DATED 29.2.2016

EXHIBIT P6 TRUE COPY OF THE JUDGMENT DATED 25.4.2017 IN W.P.(C) NO.14545 OF 2017 (P) RESPONDENT(S)' EXHIBITS NIL ----------------------- /TRUE COPY/ P.A.TO JUDGE K.V.

A.K.JAYASANKARAN NAMBIAR, J. ............................................................. ............................................................. Dated this the 23nd day of May, 2017 J U D G M E N T

Against Ext.P1 order of assessment under the Income Tax Act, the petitioner has preferred Ext.P2 appeal before the Commissioner of Income Tax (Appeals). During the pendency of the said appeal, the petitioner also moved the respondent Income Tax Officer for a stay of recovery of the amounts confirmed against him by Ext.P1 assessment order. By Ext.P4 order, the respondent directed the petitioner to pay 15% of the amounts confirmed against him, by Ext.P1 assessment order, as a condition for the stay of recovery of the balance amounts during the pendency of the appeal. In the writ petition, the petitioner impugns Ext.P4 order, on the ground that, the issue involved in the appeal stands covered in favour of the petitioner by a Division Bench judgment of this Court. 2. I have heard the learned counsel for the petitioner and

also the learned Standing counsel for the Income Tax Authority. The learned Standing counsel would submit on instructions that against the Division Bench judgment of this Court, the Department has taken up the matter in appeal before the Supreme Court and the SLP is pending. Taking note of the said submission, I dispose the writ petition with the following directions: i. Ext.P4 order is quashed. The Commissioner of Income Tax (Appeals) shall dispose Ext. P2 appeal after hearing the petitioner. ii. I make it clear that till such time as orders are passed by the Commissioner of Income Tax (Appeals) on Ext.P2 appeal and the orders so passed communicated to the petitioner, recovery steps for recovery of amounts confirmed against the petitioner by Ext.P1 assessment order shall be kept in abeyance. The petitioner shall produce a copy of the writ petition along with a copy of the judgment before the respondent and the Commissioner of Income Tax (Appeals) for further action.

Sd/- A.K.JAYASANKARAN NAMBIAR

JUDGE mns/23.05.17

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