KERALA STATE CO-OPERATIVE BANK LTD vs. UNION OF INDIA

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WP(C)/34123/2022HC KeralaKLHC01072835202205 April 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
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What did the High Court hold?

The High Court directed that if the petitioner files a stay petition before the Income Tax Appellate Tribunal within ten days from April 5, 2024, the ITAT shall expeditiously take up and dispose of the stay petition within three months. For a period of three months from the date of the order, the impugned demand notices shall not be given effect to, provided the petitioner remits an additional 30% of the total assessed tax within ten days from April 5, 2024. If the petitioner fails to file the stay petition or does not remit the additional 30% of the tax, the revenue authorities are free to enforce the recovery notices. The writ petition was disposed of with these directions.

What were the facts?

The petitioner, Kerala State Co-operative Bank Ltd., filed a writ petition challenging demand notices (Exts.P16 and P18) issued pursuant to an assessment order (Ext.P17) dated September 26, 2022, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, for assessment year 2020-21. The total tax assessed was Rs. 7,01,36,76,298/-. An appeal before the Commissioner of Income Tax (Appeals) was dismissed. The petitioner had deposited 20% of the assessed tax during the pendency of that appeal. A second appeal was filed before the Income Tax Appellate Tribunal (ITAT), but no stay petition was filed. The petitioner stated they would file a stay petition before the ITAT within ten days.

What were the issues?

1. Whether the demand notices issued in pursuance to the assessment order are to be given effect to, pending the disposal of the second appeal before the Income Tax Appellate Tribunal. The petitioner contended that they would file a stay petition before the ITAT within ten days. The revenue's contentions are not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 5TH DAY OF APRIL 2024 / 16TH CHAITHRA, 1946 WP(C) NO. 34123 OF 2022 PETITIONER: KERALA STATE CO-OPERATIVE BANK LTD REPRESENTED BY ITS MANAGING DIRECTOR, COBANK TOWERS, PALAYAM, THIRUVANANTHAPURAM, PIN – 695003. BY ADVS. B.G.HARINDRANATH AMITH KRISHNAN H. M.GOPIKRISHNAN SARAYOO S. RESPONDENTS: 1 UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE, NORTH BLOCK, RAISANA HILL, NEW DELHI-110001. 2 THE COMMISSIONER OF INCOME TAX (TDS), AYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM- 695003, PIN – 695003. BY ADVS. K.SUDHINKUMAR SRI. P.R. AJITH KUMAR, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.04.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 34123 OF 2022 2 JUDGMENT The petitioner has filed this writ petition impugning Exts.P16 and P18 demand notices issued in pursuance to Ext.P17 assessment order passed on 26.9.2022 under Section 143(3) r/w Section 144 B of the Income Tax Act, 1961 in respect of the assessment year 2020-21. The total tax assessed and payable is Rs.7,01,36,76,298/-. Challenge to the Assessment Order before the Commissioner of Income Tax (Appeals) has been unsuccessful. The petitioner had deposited 20% of the assessed tax during the pendency of the appeal before the Commissioner of Income Tax (Appeals). However, once the appeal was dismissed by the Commissioner of Income Tax (Appeals), the petitioner has filed second appeal before the Income Tax Appellate Tribunal. However, no stay petition has been filed. 2. The learned counsel for the petitioner submits that the petitioner will file a stay petition before the Income Tax Appellate Tribunal within ten days from today. 3. If the stay petition is filed within ten days from today, the Income Tax Appellate Tribunal will take up the stay petition having its disposal expeditiously within a period of three months. For a period of three months, the impugned Exts.P16 and P18

WP(C) NO. 34123 OF 2022 3 notices shall not be given effect subject to the petitioner remitting 30% more of the total tax assessed within a period of ten days from today. If the petitioner fails to file the stay petition or does not remit 30% of the tax assessed, the authority is free to enforce the recovery notices namely Exts.P16 and P18. With the above directions, the present writ petition stands finally disposed of. Sd/- DINESH KUMAR SINGH JUDGE Sru

WP(C) NO. 34123 OF 2022 4 APPENDIX OF WP(C) 34123/2022 PETITIONER’S EXHIBITS Exhibit1 TRUE COPY OF THE ITR FILED BY THE KASARGOD DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 14-01-2021. Exhibit-P2 TRUE COPY OF THE ITR FILED BY THE KANNUR DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 14-02-2021. Exhibit-P3 TRUE COPY OF THE ITR FILED BY THE WAYANAD DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 17-12-2020. Exhibit-P4 TRUE COPY OF THE ITR FILED BY THE KOZHIKODE DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 29-03-2022. Exhibit-P5 TRUE COPY OF THE ITR FILED BY THE PALAKKAD DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 14-01-2021. Exhibit-P6 TRUE COPY OF THE ITR FILED BY THE THRISSUR DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 15-02-2021. Exhibit-P7 TRUE COPY OF THE ITR FILED BY THE ERNAKULAM DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 08-02-2021. Exhibit-P8 TRUE COPY OF THE ITR FILED BY THE KOTTAYAM DISTRICT CO-OPERATIVE BANK FOR AY 2010-2021 DATED 19-01-2021. Exhibit-P9 TRUE COPY OF THE ITR FILED BY THE ALAPPUZHA DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 21-01-2021. Exhibit-P10 TRUE COPY OF THE ITR FILED BY THE IDUKKI DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 22-12-2020. Exhibit-P11 TRUE COPY OF THE ITR FILED BY THE PATHANAMTHITTA DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 28-12-2020.

WP(C) NO. 34123 OF 2022 5 Exhibit-P12 TRUE COPY OF THE ITR FILED BY THE KOLLAM DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 31-03-2021. Exhibit-P13 TRUE COPY OF THE ITR FILED BY THE THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK FOR AY 2020-2021 DATED 13-02-2021. Exhibit-P14 PROVISIONS DISALLOWED FOR COMPUTATION OF BUSINESS INCOME ON THE MERGER DATE, NAMELY 29-11-2019. Exhibit-P15 BUSINESS INCOME COMPUTATION FOR ALL 13 DCBS FOR PERIOD ENDING 29-11-2019 FOR AY 2020-21. Exhibit-P16 TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE 2ND RESPONDENT DATED 26-09-2022. Exhibit-P17 ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT DATED 26-09-2022. Exhibit P17 ASSESSMENT ORDER DATED 26-09-2022. Exhibit P18 A TRUE COPY OF THE DEMAND NOTICE DATED 21.03.2024. Exhibit P19 A TRUE COPY OF THE APPEAL MEMORANDUM DATED 30.01.2024. Exhibit P20 A TRUE COPY OF THE RECTIFICATION PETITION.

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