THE BHARAT CO OPERATIVE vs. THE COMMISSIONER OF INCOME TAX

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WP/3040/2015HC KarnatakaKAHC01014674201506 February 2015Bench: B.S PATIL4 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court directed the petitioner to move the Appellate Authority for consideration of their stay application. Pending this, the impugned recovery notice and demand notices were stayed, and the Appellate Authority was directed to dispose of the appeals within two months.

What were the facts?

The petitioner bank received assessment orders under Section 201(1) and 201(A) of the Income Tax Act. While statutory appeals were pending before the CIT(Appeals), the revenue initiated recovery proceedings by issuing a notice under Section 226(3) to the Reserve Bank of India.

What were the issues?

The primary issue was the initiation of recovery proceedings while appeals and stay applications were pending before the appellate authorities. The court sought to balance the interests of the petitioner and the revenue.

Which sections of the Income-tax Act were involved?

Section 201(1),Section 201(A),Section 226(3)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF FEBRUARY, 2015 BEFORE

THE HON’BLE MR.JUSTICE B.S.PATIL W.P.Nos. 3040-42/2015 (T-IT) BETWEEN

THE BHARAT CO-OPERATIVE BANK (MUBAI) LTD., K.H. ROAD BRANCH, REP. BY ITS DY.GENERAL MANAGER SRI. KISHORE D. KOTIAN, AGED ABOUT 56 YEARS MONEY TERRACE, K H ROAD, (DOUBLE ROAD) BENGALURU-560 027.

... PETITIONER (By Sri SHANKAR A, ADV.)

AND

1.

THE COMMISSIONER OF INCOME TAX (TDS), OFFICE OF THE COMMISSIONER OF INCOME-TAX (TDS), 4TH FLOOR, HMT BHAVAN, NO.59, BELLARY ROAD, BANGALORE-560 032. 2. THE INCOME-TAX OFFICER (TDS) WARD-2(2), 4TH FLOOR, HMT BHAVAN, 59, BELLARY ROAD, BANGALORE-560 032. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-13, 4TH FLOOR, HMT BHAVAN, 59, BELLARY ROAD, BANGALORE-560 032.

... RESPONDENTS

(By Sri. JEEVAN J.NEERALGI, ADV. )

THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DECLARE THE NOTICE UNDER SEC.226(3) OF THE ACT DT.22.1.2015 ISSUED BY THE R-2 TO THE MANAGER, RESERVE BANK OF INDIA, NRUPATHUNGA ROAD, BENGALURU REFERRED IN ANNX-A AS NOT IN ACCORDANCE WITH LAW & QUASH THE SAME.

THESE PETITIONS COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

1.

Petitioner has suffered assessment orders dated 29.03.2014 which are passed under Section 201(1) and 201(A) of the Income Tax Act, 1961 (for short ‘the Act’). These orders are produced at Annexures – B1, B2 and B3. Aggrieved by these orders, petitioner has filed statutory appeals before the Commissioner of Income Tax (Appeals), Bangalore. The said appeals are pending consideration.

2.

Petitioner has filed application seeking interim prayer of the demand notice issued. The said application is still pending. No orders are passed by the Appellate Authority. During the meantime, the Authorities have initiated steps for recovery of tax. Notice under Section 226(3) of the Act has been issued by the jurisdictional Income Tax Officer to the Manager, Reserve Bank of India, Nrupathunga Road, Bangalore, which is

produced at Annexure-A. Petitioner moved the Commissioner of Income Tax seeking stay of recovery of the amount. As no order is passed either by the Appellate Authority or by the Commissioner before whom the application was moved, petitioner has approached this Court in these writ petitions.

3.

Sri Jeevan J. Neeralgi, learned counsel for the revenue was directed to take notice and secure instructions.

4.

I have heard the learned counsel for the parties.

5.

Facts and circumstances of the case would reveal that appeals filed by the petitioner are still pending. Application filed seeking stay of the demand notice issued pursuant to the assessment orders challenged before the Appellate Authority is also pending. Under such circumstances, learned counsel for both sides bring to the notice of the Court the view already taken by this Court in similar matters including in W.P.Nos.14973-989/2014 disposed of on 26.03.2014. Hence, in order to safeguard the interest of the petitioner and the revenue, following order is passed:

a) Petitioner is permitted to move the Appellate Authority within three weeks from today requesting

for consideration of the application filed before the Appellate Authority, whereupon the Appellate Authority shall consider the application and pass appropriate orders. In the meanwhile, there shall be stay of the impugned notice produced at Annexure – A and the recovery of the amount pursuant to the demand notices issued vide Annexures-B1, B2 and B3.

b) Appellate Authority is directed to dispose of the appeals within two months from today.

Petitions are accordingly disposed of.

Sri Jeevan J. Neeralgi, learned standing counsel for the respondents is permitted to file vakalth within two weeks.

Sd/- JUDGE

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