THE KUTTIYERI SERVICE CO-OPERATIVE BANK LTD NO. 1266. V. THE COMMISSIONER OF INCOME TAX (APPEALS)

WP(C)/20331/2019

AI Insights

The case involves the Kuttiyeri Service Co-operative Bank Ltd, which contested the rejection of its deduction claim under Section 80P(2) of the Income Tax Act for the assessment year 2016-17. The initial assessment by the Income Tax Officer resulted in a tax demand, which the bank appealed against. The bank sought a stay on the recovery of the tax demand, which was partially granted by the Principal Commissioner of Income Tax, requiring a 20% payment of the tax demand. The bank challenged this condition in the High Court, referencing a similar case where a complete stay was granted. The High Court's decision mandates a re-evaluation of the appeal without the condition of partial payment, aligning with the precedent set in the referenced case.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 754633 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 26-09-2019
• 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, Kerala Co-operative Societies Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: O D SIVADAS
• Keywords: Appeal; Assessment Year; Co-operative Society; Income tax deduction; Stay of recovery
• Section: 80P(2); 220(6)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR THURSDAY, THE 26TH DAY OF SEPTEMBER 2019/4TH ASWINA, 1941 WP(C).No.20331 OF 2019(N) PETITIONER: THE KUTTIYERI SERVICE CO-OPERATIVE BANK LTD NO. 1266, KUTTYERI P.O, KANNUR DISTRICT, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.O.D.SIVADAS RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, KOZHIKODE - 673 001. 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX, AYAKAR BHAVAN, KOZHIKODE - 673 001. 3 THE INCOME TAX OFFICER, WARD (4), KANNUR, PIN 670 001. BY SRI.CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26.09.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.20331/2019 : 2 : J U D G M E N T The petitioner, a Co-operative society registered under the Kerala Co-operative Societies Act, had furnished returns for the assessment year 2016-17, and claimed the benefit under Section 80P(2) of the Income Tax Act. The assessment was completed by the Assessing Authority finding that the total income for the assessment year was Rs.32,16,495/-. The claim for deduction under Section 80P(2) was rejected by stating that the petitioner was not entitled to the said benefit. Against Ext.P1 order of assessment, the petitioner preferred an appeal before the 1st respondent, and with a view to obtaining a stay of recovery, pending disposal of the appeal, the petitioner had approached the 3rd respondent under Section 220(6) of the Income Tax Act. The said application was forwarded by the 3rd respondent to the 2nd respondent, who passed Ext.P4 order directing the payment of 20% of the tax demand as a condition for stay of recovery of the balance amounts confirmed against the petitioner by Ext.P1 order. 2. In the writ petition, Ext.P4 order is impugned inter alia on W.P.(C).No.20331/2019 : 3 : the contention that, in similar matters, taking note of the decision of this Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut - [2019 (2) KHC 287 (FB)], the assessee has been granted a complete stay of recovery of the amounts demanded pursuant to the disallowed deduction under Section 80(P)(2) pending disposal of the appeal by the Appellate authority. Taking cue from the said orders passed by this Court, I dispose the writ petition by directing the 1st respondent to consider and pass orders on Ext.P2 appeal preferred by the petitioner, on merits, 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 1st respondent, as directed, and the order communicated to the petitioner, recovery steps for recovery of tax, pursuant to 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 1st respondent, for further action. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE prp/26/9/19 W.P.(C).No.20331/2019 : 4 : APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 COPY OF THE ASSESSMENT ORDER DATED 13-12-2018 ISSUED BY THE 3RD RESPONDENT FOR THE PERIOD 2016-17. EXHIBIT P2 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 26-01-2019 FOR THE PERIOD 2016-17. EXHIBIT P3 COPY OF THE STAY PETITION DATED 15-01-2019 FILED BEFORE THE 3RD RESPONDENT FOR THE PERIOD 2016-17. EXHIBIT P4 RESPONDENTS EXHIBITS: COPY OF THE PROCEEDING DATED 27-03-2019 ISSUED BY THE 2ND RESPONDENT IN THE STAY PETITION FILED IN RELATION TO THE ASSESSMENT PERIOD 2016-17. NIL. //TRUE COPY// P.S. TO JUDGE "