ARANATTUKARA ORIENTAL SERVICE CO-OPERATIVE BANK LTD. V. THE INCOME TAX OFFICER

WP(C)/25831/2019

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The case involves the Aranattukara Oriental Service Co-operative Bank Ltd., which challenged an assessment order (Ext.P1) issued by the Income Tax Officer for the assessment year 2016-2017. The bank appealed against this order and filed a stay petition, which was partially granted by the Commissioner of Income Tax (Appeals), requiring a 20% payment of the assessed amount for a stay on the remaining 80%. The petitioner contested this condition, citing a precedent where similar cases were granted a complete stay pending appeal. The High Court, referencing decisions in favor of similar co-operative banks regarding deductions under Section 80P(2) of the Income Tax Act, quashed the 2nd respondent's order and directed a re-evaluation of the appeal without the conditional payment.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 754631 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 27-09-2019
• Assessment Year: misc
• Other Referred Cases: Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 [FB]]
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: ANIL NAIR; R; GOKULRAJ; ARYA ANIL; HARINI
• Keywords: Appeal; Assessment Order; Co-operative Bank; Deduction; Income Tax; Stay Petition
• Section: 80P(2)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 27TH DAY OF SEPTEMBER 2019 / 5TH ASWINA, 1941 WP(C).No.25831 OF 2019(D) PETITIONER: ARANATTUKARA ORIENTAL SERVICE CO-OPERATIVE BANK LTD. NO.171,15/435, BIG BAZAR P. O., ARANATTUKARA, THRISSUR - 680 618. REPRESENTED BY ITS SECRETARY, MR. MANEESH K. BY ADVS. SRI.ANIL D. NAIR SRI.R.SREEJITH SHRI.GOKULRAJ L. SMT. ARYA ANIL SMT.SRI HARINI S.P. RESPONDENTS: 1 THE INCOME TAX OFFICER WARD - 2(1), THRISSUR - 680 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) 3RD FLOOR, AAYKAR BHAVAN, THRISSUR - 680001. SRI. JOSE JOSEPH; SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.09.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.25831 OF 2019 -2- JUDGMENT Against Ext.P1 assessment order for the assessment year 2016- 2017 under the Income Tax Act, the petitioner has preferred Ext.P2 appeal together with Ext.P3 stay petition before the 2nd respondent. In the stay petition, the 2nd respondent, by Ext.P5 order, directed a payment of 20% as a condition for grant of stay of the balance 80% that was demanded from the petitioner by Ext.P1 assessment order. It is the submission of the learned counsel for the petitioner that the issue relates to the deduction under Section 80P(2) of the Income Tax Act, and this Court has, in the decision reported in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287 [FB]] resolved the issue in favour of the assessee. 2. It is also brought to my notice that another Division Bench of this Court in a writ appeal has directed the First Appellate Authority to grant a complete stay in all cases where the tax demand arises consequent to the disallowance of the deduction under Section 80P(2) and where appeals are pending finalization before the First Appellate Authority. WP(C).No.25831 OF 2019 -3- 3. I have heard the learned counsel appearing for the petitioner and also the learned Standing Counsel appearing for the Income Tax Department. 4. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I quash Ext.P5 order of the 2nd respondent, and direct the 2nd respondent to consider and pass orders on Ext.P2 appeal within an outer time limit of six months from the date of receipt of a copy of this judgment, after hearing the petitioner. It is made clear that till such time as orders are passed by the 2nd respondent as directed, and the order communicated to the petitioner, recovery steps for recovery of amounts confirmed against the petitioner by Ext.P1 assessment order shall be kept in abeyance. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 2nd respondent, for further action. The writ petition is disposed as above. SD/- A.K.JAYASANKARAN NAMBIAR JUDGE SJ WP(C).No.25831 OF 2019 -4- APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 23.12.2018 FOR THE A.Y.2016-17 ISSUED TO THE PETITIONER BY THE 1ST RESPONDENT. EXHIBIT P2 TRUE COPY OF THE APPEAL FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE JUDGMENT DATED 1.7.2019 IN WRIT APPEAL NO.1536 OF 2019. EXHIBIT P5 TRUE COPY OF ORDER DATED 26.8.2019 PASSED BY THE 2ND RESPONDENT. "