THE GOVERNMENT SERVANTS CO-OPERATIVE SOCIETY LTD.A-245, V. THE COMMISSIONER OF INCOME TAX (APPEALS),

WP(C)/7549/2020

AI Insights

The case involves the Government Servants Co-operative Society Ltd., which challenged the condition imposed by the Income Tax Officer requiring the payment of 20% of the assessed tax as a precondition for the stay of the assessment order pending appeal. The petitioner argued that this condition was detrimental, leading to the freezing of their accounts and hindering their operations. The court referenced a previous Division Bench decision and a Full Bench decision, which found such a condition to be inappropriate. The court's decision emphasized the need for the appeal to be considered without the imposition of such financial preconditions.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 693491 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 12-03-2020
• Assessment Year: misc
• Other Referred Cases: Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: O D SIVADAS
• Keywords: Appeal; Assessment Order; Co-operative Credit Society; Frozen account; Income Tax; Stay Petition
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN THURSDAY, THE 12TH DAY OF MARCH 2020 / 22ND PHALGUNA, 1941 WP(C).No.7549 OF 2020(P) PETITIONER/S: THE GOVERNMENT SERVANTS CO-OPERATIVE SOCIETY LTD.A-245, KAYAMKULAM, KATHIKAPPILLY, ALAPPUZHA, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.O.D.SIVADAS RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), AYAKAR BHAVAN, KOTTAYAM, PIN-686001. 2 THE INCOME TAX OFFICER, WARD NO.5, ALAPPUZHA, PIN-688011. OTHER PRESENT: SC JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.7549 of 2020 2 Dated this the 12th day of March, 2020 JUDGMENT The petitioner, a Co-operative Credit Society, is aggrieved by the condition of payment of 20% of the tax assessed, imposed under Ext.P4, pending consideration of Ext.P2 appeal filed against Ext.P1 assessment order. It is submitted that pursuant to Ext.P4; alleging non-compliance of the direction in Ext.P4, the account of the petitioner has been frozen and the Society is not in a position to continue its activities. The issue regarding imposition of the condition of remittance of 20% of the tax demanded was considered and decided by the Division Bench of this Court and as per the judgment in W.A.No. 1529 of 2019 and connected cases. After taking note of the peculiar aspects involved and the decision of the Full Bench in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut W.P.(C) No.7549 of 2020 3 [2019 (2) KHC 287], the Division Bench held the insistence for payment of proportion of the demand as a condition for grant of stay to be bad. In such circumstances, the demand for remittance of 20% of the tax assessed pending consideration of the appeals, cannot be sustained. The writ petition is therefore disposed of, directing the first respondent to consider Ext.P2 appeal filed by the petitioner within a period of three months from the date of receipt of a copy of this judgment. In the meanwhile, all coercive steps based on Ext.P4 shall be kept in abeyance. The order freezing the petitioner's account shall be lifted forthwith and the petitioner permitted to operate its accounts. sd/- V.G.ARUN JUDGE Scl/12.03.2020 W.P.(C) No.7549 of 2020 4 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF THE ASSESSMENT ORDER DATED 23.12.2019 ISSUED BY THE 2ND RESPONDENT FOR THE PERIOD 2017-18. EXHIBIT P2 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE PERIOD 2017-18 DATED 16.1.2020. EXHIBIT P3 COPY OF THE STAY PETITION DATED 16.1.2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT AGAINST EXT.P1 ORDER. EXHIBIT P4 COPY OF THE ORDER DATED 3.2.2020 ISSUED BY THE 2ND RESPONDENT. W.P.(C) No.7549 of 2020 5 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF THE ASSESSMENT ORDER DATED 23.12.2019 ISSUED BY THE 2ND RESPONDENT FOR THE PERIOD 2017-18. EXHIBIT P2 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE PERIOD 2017-18 DATED 16.1.2020. EXHIBIT P3 COPY OF THE STAY PETITION DATED 16.1.2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT AGAINST EXT.P1 ORDER. EXHIBIT P4 COPY OF THE ORDER DATED 3.2.2020 ISSUED BY THE 2ND RESPONDENT. W.P.(C) No.7549 of 2020 6 "