KUTTIPURAM SERVICE CO-OPERATIVE BANK LIMITED vs. THE INCOME TAX OFFICER

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WP(C)/15585/2014HC KeralaKLHC01061207201409 July 2014Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the procedure adopted, where the Appellate Authority directed the petitioner to approach the Assessing Officer under Section 220(6) in relation to a stay application, was palpably wrong. Following a previous decision by the same court in W.P.(C).16670/2014, the Court set aside Exhibits P3, P5, and P7. The Appellate Authority was directed to consider the stay application within two months from the date of the order, after providing the petitioner with an opportunity of hearing. Recovery proceedings were ordered to be kept in abeyance until the Appellate Authority passed its orders on the stay application, and recovery would then be governed by those subsequent orders. The issue of the assessment for the year 2010-11 itself was not decided on merits.

What were the facts?

The petitioner, Kuttipuram Service Co-operative Bank Limited, is aggrieved by an order passed under Section 220(6) of the Income Tax Act, 1961 (Exhibit P5). The petitioner contended that this order was passed without providing a hearing. Consequently, they filed an application for re-hearing, which was dismissed (Exhibit P7). The order at Exhibit P5 was issued pursuant to a direction from the 1st Appellate Authority (Exhibit P3) in a stay application related to an appeal for the assessment year 2010-11. The Appellate Authority had directed the petitioner to approach the Assessing Officer under Section 220(6). The petitioner argues this procedure is incorrect.

What were the issues?

1. Whether the order passed under Section 220(6) of the Income Tax Act, 1961 (Exhibit P5) is liable to be set aside for being passed without affording an opportunity of hearing to the petitioner? (Question of law and fact, concerning Section 220(6) of the Income Tax Act, 1961). 2. Whether the direction by the Appellate Authority to approach the Assessing Officer under Section 220(6) is a correct procedure in the context of a stay application? (Question of law and fact, concerning procedural correctness under the Income Tax Act, 1961). Assessee's Contentions: The petitioner argued that Exhibit P5 was passed without a hearing. They relied on the principle that an order affecting a party cannot be passed without affording them an opportunity to be heard. They also contended that the procedure adopted, directing them to approach the Assessing Officer under Section 220(6) for a stay application, was incorrect. Revenue's Contentions: No specific contentions for the revenue are recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 220(6)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN WEDNESDAY, THE 9TH DAY OF JULY 2014/18TH ASHADHA, 1936 WP(C).No. 15585 of 2014 (W) ---------------------------- PETITIONER(S): -------------------------- KUTTIPURAM SERVICE CO-OPERATIVE BANK LIMITED KUTTIPURAM P.O., MALAPPURAM DISTRICT REPRESENTED BY ITS SECRETARY. BY ADV. SRI.O.D.SIVADAS RESPONDENT(S): ---------------------------- 1. THE INCOME TAX OFFICER WARD NO.1, TIRUR, MALAPPURAM DISTRICT - 676 101. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) MANANCHIRA, KOZHIKODE - 673 001. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09-07- 2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No. 15585 of 2014 (W) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXHIBIT-P1-TRUE COPY OF THE ASSESSMENT ORD3ER ISSUED BY THE IST RESPONDENT DATED 27/03/2013. EXHIBIT-P2-TRUE COPY OF THE APPEAL PREFERRED BY THE PETITIONER. EXHIBIT-P3-TRUE COPY OF THE ORDER DATED 29/04/2014 OF THE 2ND RESPONDENT. EXHIBIT-P4-TRUE COPY OF THE PETITION DATED 14/05/2014 SUBMITTED BY THE PETITIONER. EXHIBIT-P5-TRUE COPY OF THE ORDER DATED 20/05/2014 ISSUED BY THE IST RESPONDENT. EXHIBIT-P6-TRUE COPY OF THE APPLICATION DATED 28/05/2014 SUBMITTED BY THE PETITIONER. EXHIBIT-P7-TRUE COPY OF THE ORDER DATED 02/06/2014 OF THE IST RESPONDENT. //True Copy// P.A. To Judge

K.VINOD CHANDRAN, J - - - - - - - - - - - - - - - - - - - - W.P.(C).No. 15585 of 2014 - - - - - - - - - - - - - - - - Dated 9th July, 2014 - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT The petitioner is aggrieved with the order passed under Section 220(6) of the Income Tax Act, 1961, produced herein as Ext.P5. In fact, petitioner had a contention that Ext.P5 was passed without hearing the petitioner and hence, he filed an application for re-hearing which was dismissed by Ext.P7. Ext.P5 itself was passed on the direction of the 1st Appellate Authority, in Ext.P3, in a stay application filed in an appeal filed by the petitioner for the assessment year 2010-11. The Appellate Authority directed the petitioner to approach the Assessing Officer under Section 220(6). The said procedure has been found to be palpably wrong by this Court in W.P.(C).16670/2014. Following the said decision, Exts.P3, P5 and P7 are set aside. The Appellate Authority shall consider the stay

WP(C).15585/14 2 application within a period of two months from today, after affording an opportunity of hearing to the petitioner. Recovery proceedings shall be kept in abeyance till such orders are passed and later, the recovery shall be governed by the orders so passed. Writ petition disposed of. Sd/- K.VINOD CHANDRAN, Judge Mrcs //True Copy//

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