PRIMARY AGRICULTURAL CREDIT CO-OP SOCIETY LTD V. COMMISSIONER OF INCOME TAX

WP/6153/2020

AI Insights

The case involves the Primary Agricultural Credit Co-op Society Ltd., which filed a writ petition against the Commissioner of Income Tax (Appeals) and the Income Tax Officer. The petitioner sought to quash an assessment order and a subsequent notice related to the recovery of tax. The petitioner had declared a nil income after claiming deductions under Section 80P of the Income Tax Act, 1961, which was contested by the tax authorities. The court's decision focused on the procedural aspect of the stay application regarding the recovery proceedings, emphasizing the need for a timely decision on the stay application before further recovery actions could proceed.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 754809 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 17-03-2020
• Assessment Year: misc
• Other Referred Cases: M/s. Shriram Finance v. Principal Commissioner of Income Tax (1) and Others, Flipkart India Private Limited v. The Assistant Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI
• Assessee Lawyers: MAHESH UPPIN
• Keywords: Assessment Order; Income Tax; Mandamus; Stay Application; Writ petition
• Section: 80P; 220(6)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF MARCH 2020 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.6153/2020 (T-RES) Between: Primary Agricultural Credit Co-op. Society Ltd., Gonibeedu Village and Post, Mudigere Taluk, Chikmagaluru District – 574 132, Rep. by its C.E.O. – Mrs. N.B. Lalitha. … Petitioner (By Sri Mahesh R. Uppin, Advocate) And: 1. Commissioner of Income Tax (Appeals), Aayakar Bhavan, No.21/16, Residency Road, Nazarbad, Mysuru – 570 010. 2. Income Tax Officer, Ward-1, I.T. Office, Court Road, Chikmagaluru – 577 101. … Respondents (By Sri Jeevan J. Neeralgi, Advocate) This Writ Petition is filed under Articles 226 & 227 of the Constitution of India, praying to quash the assessment order dated 26.12.2018 passed in order passed by the R-2 marked as Annexure-A and the notice dated 9.3.2020 issued by the R-2 marked as Annexure-F and etc. 2 This Writ Petition coming on for preliminary hearing this day, the Court made the following: ORDER The petitioner who is a Primary Agricultural Credit Co-op Society Limited has filed the present petition seeking to quash the assessment order dated 26.12.2018 passed by the second respondent or in the alternative has sought for issuance of writ in the nature of mandamus directing the first respondent to dispose off the appeal dated 19.01.2019 within a period of three months. 2. It is the case of the petitioner that it had filed return of income for the assessment year 2016-17 declaring the Gross Total Income at Rs.36,30,155/- and it had claimed deduction under Section 80P of the Income Tax Act, 1961 and hence had declared the income as Nil. 3. It is further submitted that in the assessment proceedings, the interest on investment of Rs.26,05,541/- was considered as income from other sources and hence deduction was restricted to only 25% of the income. The 3 petitioner submits that as against such assessment order, appeal has been filed and an application for stay has been sought before the Commissioner of Income Tax, copy of which is produced at Annexure-‘D’. An application has also been filed before the Assessing Officer as per Annexure-‘E’. 4. It is to be noticed that no decision has been made as regards stay application filed before the Appellate Authority, nor has the assessing officer disposed off the request of the petitioner in terms of Section 220 (6) of the Income Tax Act, 1961. 5. Needless to state that the application for stay is required to be disposed off in light of the Circular bearing No.1914, further amended on 25.01.2017, 29.02.2016 and 31.07.2017 and also keeping in mind the observations made by the High Court of Judicature at Madras in the case of M/s. Shriram Finance v. Principal Commissioner of Income Tax (1) and Others (W.P.No.5425/2019 & W.P.Nos.6166 & 6168/2019 decided on 01.03.2019) as well as the order of this Court in the case of Flipkart India 4 Private Limited v. The Assistant Commissioner of Income Tax (W.P.Nos.1339-1342/2017 decided on 23.02.2017). 6. 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 Court refrains from expressing any opinion on the merits of contentions raised. 5 7. It is further submitted that without disposing off the application for stay, proceedings are initiated for recovery of amount in the nature of garnishee proceedings as per Annexure-‘F’. 8. In light of discussion made above, noticing that application for stay filed by the petitioner is still not been disposed off, the proceedings initiated as per Annexure-‘F’ could be kept in abeyance and the Appellate Authority to dispose off the application for stay filed by the petitioner and pending before it within a period not later than two weeks. The petitioner is to be afforded an opportunity of hearing as regards his application for stay. In the interregnum, the proceedings at Annexure-‘F’ would be kept in abeyance. Sd/- JUDGE Np/- "