THE KERALA STATE CO-OPERATIVE BANK LTD., vs. THE COMMISSIONER OF INCOME TAX (APPEALS),

WP(C)/7707/2020HC KeralaKLHC01020198202029 July 2020Bench: HONOURABLE MR. JUSTICE SATHISH NINAN4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the order Ext.P8, which granted stay with a rider directing the petitioner to remit 20% of the total demand, was unsustainable. The Court found that there was no discussion or stated reason in the order to justify the imposition of this condition. The Court emphasized that it is proper for a reasoned order to be passed, particularly when the petitioner is seeking an unconditional stay. Consequently, the Court quashed Ext.P8 and directed the Commissioner of Income Tax (Appeals) to pass fresh orders on the stay petition after hearing the petitioner. The fresh order is to be passed expeditiously, within two weeks from the date of the judgment.

What were the facts?

The petitioner, The Kerala State Co-operative Bank Ltd. (formerly The Thrissur District Co-operative Bank Limited), filed an appeal before the Commissioner of Income Tax (Appeals) for the assessment year 2017-2018. The appeal was accompanied by an application for stay of demand. The Commissioner passed an order on the stay petition, Ext.P8, granting stay with a condition that the petitioner remit 20% of the total demand. The petitioner is challenging this conditional stay order through a writ petition. The High Court heard arguments from the petitioner's counsel and the respondents' Standing Counsel.

What were the issues?

1. Whether the order on the stay petition, Ext.P8, passed by the Commissioner of Income Tax (Appeals) is sustainable in law, considering it lacks reasoned analysis for imposing a condition for stay? Assessee's Contention: The petitioner argues that the order Ext.P8 is unsustainable as it does not provide any discussion or reasons for directing the remittance of 20% of the demand. They seek an unconditional stay. Revenue's Contention: The judgment does not record any specific arguments from the revenue regarding the sustainability of the order. However, the revenue is represented by a Standing Counsel, implying their participation in the proceedings.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE SATHISH NINAN WEDNESDAY, THE 29TH DAY OF JULY 2020 / 7TH SRAVANA, 1942 WP(C).No.7707 OF 2020(K) PETITIONER: THE KERALA STATE CO-OPERATIVE BANK LTD., (ERSTWHILE THE THRISSUR DISTRICT CO-OPERATIVE BANK LIMITED), THRISSUR, SAHAKARANA SATABDHI MANDIRAM, KOVILAKATHUMPADAM, THRISSUR - 680 022, REPRESENTED BY ITS DISTRICT MANAGER. BY ADV. SRI.P.C.SASIDHARAN, SC, THRISSUR DISTRICT CO.OPERATIVE BANK LTD. RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), THRISSUR - 680 001. 2 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2 (1), AYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSUR - 680 001. 3 THE STATE BANK OF INDIA, REPRESENTED BY ITS CHIEF MANAGER, MAIN BRANCH, THRISSUR- 680 001. SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29.07.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

2 WP(C).No.7707 OF 2020(K) JUDGMENT Challenging the assessment for the year 2017- 2018, the petitioner has filed an appeal before the 1st respondent. The appeal is accompanied by an application for stay. 2. Pending the appeal, Ext.P8 order was passed on the stay petition, granting stay with a rider directing the petitioner to remit 20% of total demand. The petitioner challenges the said order. 3. Heard Sri.P.C.Sasidharan, the learned counsel for the petitioner and Sri.Jose Joseph, the learned Standing Counsel for the respondents. 4. A perusal of Ext.P8 order shows that there is no discussion or reason stated as to why the petitioner has been directed to remit 20% of the demand. It is only proper that a reasoned order be passed especially since the petitioner seeks for an unconditional stay. Fresh orders needs to be passed on the stay petition. Necesssarily, the petitioner shall also be heard before passing the order.

3 WP(C).No.7707 OF 2020(K) Accordingly, Ext.P8 order is quashed. The 1st respondent is directed to pass fresh orders on the stay petition, after hearing the petitioner, as expeditiously as possible and at any rate, within a period of two weeks from today. Sd/- SATHISH NINAN rsr JUDGE

4 WP(C).No.7707 OF 2020(K) APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 16/12/2019. EXHIBIT P2 TRUE COPY OF THE DEMAND NOTICE. EXHIBIT P3 TRUE COPY OF THE COMPUTATION SHEET. EXHIBIT P4 TRUE COPY OF THE APPEAL DATED 02/01/2020. EXHIBIT P5 TRUE COPY OF THE STAY PETITION. EXHIBIT P6 TRUE COPY OF THE JUDGMENT IN W.P.(C) 9506 0F 2019 DATED 27/03/2019. EXHIBIT P7 TRUE COPY OF THE JUDGMENT DATED 27/1/2020 IN W.P.(C) 2194 OF 2020. EXHIBIT P8 TRUE COPY OF THE ORDER DATED 05/03/2020.

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