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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF MARCH 2020
BEFORE
THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV
WRIT PETITION No. 6240/2020 (T-IT)
Between:
Universal Credit Souhardha Sahakari Niyamitha Being a registered Co-operative Registered under the Karnataka Souharda Sahakari Act, 1997 Having its registered office at BG-05, Ground Floor, Brigade Majestic, 1st Main, Gandhinagar, Bengaluru 560 009 Rep. by its CEO Raghuveer S. Gowda …Petitioner (By Sri. Malla Reddy, B. V, Advocate)
And:
Government of India Ministry of Finance Department of Revenue, Central Board of Direct Taxes (CBDT) Income Tax Department, Room No.7008, Aayakar Bhavan, Vaishali Ghaziabad, UP.
2 PIN 201 009. Rep. by its Director /Principal Secretary.
The Commissioner of Income Tax (Appeals) – 5 7th Floor, BMTC Building, 6th Block, 80 feet Road, Koramangala, Bengaluru 560 095.
Income Tax Officer (ITO) Ward – 5(2)(4)
BMTC Building, 80 feet Road,
6th Block, Near KHB Games Village,
Koramangala, Bengaluru 560 095. …Respondents
(By Sri. Madanan Pillai R., CGC for R1 Sri. Jeevan J. Neeralgi & Sri. E. I. Sanmathi, Adv. for R2 & R3)
This Writ Petition is filed under Articles 226 & 227 of the Constitution of India, praying to stay the notice of demand dt. 25.12.2019 issued under Section 156 of the Income Tax Act, 1961 (Annexure-F) and also the notice dt. 13.02.2020 (Annexure-J) issued by the respondent No.3 pending disposal of the appeal before the 2nd respondent.
This Writ Petition coming on for preliminary hearing this day, the Court made the following:
ORDER
The petitioner is a credit Co-operative Society registered under the provisions of Karnataka
3 Souharda Sahakari Act, 1997 and is stated to be engaged in the business of extending economic and social benefits through self help and mutual aid in accordance with the co-operative principles.
The petitioner had filed its tax returns for the Assessment Year 2017–2018 on 24.10.2017 declaring total income as nil. The case of the petitioner Society was selected for scrutiny and Assessment Order came to be passed holding that the assessee was liable to pay tax for a sum of Rs.27,02.809/- while disallowing deductions of income as claimed by the petitioner under Section 80P(2) of the Income Tax Act, 1961 (‘I.T. Act’ for brevity).
The petitioner is stated to have preferred an appeal to the Commissioner of Income Tax and has sought for keeping of the demand at Annexure-F in abeyance. The copy of the application seeking stay of
4 demand is filed before the Income Tax Officer enclosed at Annexure-K.
In light of the appeal having been filed, the question of intervening as regards to the assessment order at this stage is not appropriate. However, as regards the contention that the consideration of application for stay and further exercise of power of the PCIT keeping in mind the circular bearing No.1914 as amended on 21.5.2017, 29.2.2016 and 31.7.2017, the request of the petitioner is to be considered in a meaningful manner. In fact, the power of granting stay has been considered by the High Court of Judicature at Madras in the case of M/s. Shriram Finance (supra) wherein, certain guidelines have been referred to in para-5 which may be taken note of. So also the manner of exercise of power of the Principal Commissioner of Income Tax is detailed in Flipkart’s case (supra) at paras–18 and 19, which needs to be kept in mind. This
5 Court refrains from expressing any opinion on the merits of contentions raised.
Petitioner undertakes to file an application for stay before the 2nd respondent within a period of one week from the date of release of this order. The said application if so filed shall be disposed off thereafter within a period of three weeks in light of the observations and directions made above.
Needless to state that till disposal of the application of stay to be presented before the Appellate Authority, no precipitative action for enforcing the demand would be made.
Subject to the above, this petition is disposed off.
Sd/- JUDGE