Thrissur District Co-operative Bank, Sahakarana Sathabdi Mandir, Thrissur - 680 022, represented by its General Manager V. The Commissioner of Income Tax (Appeals) V Kerala Bhavan, Kochi \\u2013 682 011 and The Assistant Commissioner of Income Tax Circle 2 (1), Thrissur \\u2013 680 001 and The Commissioner of Income Tax, Office of the Commissioner of Income Tax, Thrissur \\u2013 680 001

WP(C)/31242/2010

AI Insights

The case involves the Thrissur District Co-operative Bank, which contested the conditions imposed by the Assistant Commissioner of Income Tax regarding a stay on tax recovery. The bank, being an assessee under the Income Tax Act, 1961, had its assessment for the year 2007-08 completed, which it appealed against due to disallowed deductions. The bank sought a stay on the recovery process initiated by the tax authorities, which included prohibitory notices to various banks. The court's decision focused on the procedural aspects of the appeal and the conditions set for the stay, rather than the merits of the tax assessment itself.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 814689 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 13-10-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Co-operative Societies Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: P C SASIDHARAN
• Keywords: Appeal; Assessment; Conditional stay; Garnishee notice; Income Tax; Stay Petition
• Section: 143(3); 226(3)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 13TH OCTOBER 2010 / 21ST ASWINA 1932 WP(C).No. 31242 of 2010(E) --------------------------------------- PETITIONER(S): -------------------------- THRISSUR DISTRICT CO-OPERATIVE BANK, SAHAKARANA SATHABDI MANDIRAM, THRISSUR - 680 022, REPRESENTED BY ITS GENERAL MANAGER. BY ADV. SRI.P.C.SASIDHARAN RESPONDENT(S): -------------------------- 1. THE COMMISSIONER OF INCOME TAX (APPEALS)V KERALA BHAVAN, KOCHI – 682 011. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2 (1), THRISSUR – 680 001. 3. THE COMMISSIONER OF INCOME TAX, OFFICE OF THE COMMISSIONER OF INCOME TAX, THRISSUR – 680 001. R1 TO R3 BY ADV. MR.JOSE JOSEPH, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13/10/2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.31242 of 2010 ------------------------------------------- Dated this the 13th day of October, 2010 J U D G M E N T ---------------------- The petitioner is a central society registered under the provisions of the Co-operative Societies Act, and is an assessee borne on the files of the 2nd respondent, under the provisions of the Income Tax Act, 1961 (for short the Act). Assessment for the year 2007-08 was completed as per Ext.P1 order, under Section 143(3) of the Act. Aggrieved by disallowance of certain deductions claimed, the petitioner Society preferred statutory appeal as per Ext.P2. Ext.P3 is a stay petition filed before the Assistant Commissioner. It is evident from Ext.P4 hearing notice that the appeal now stands posted for consideration on 18.10.2010. Meanwhile the assessing officer had initiated steps for recovery and prohibitory notices under Section 226(3) were issued to various Banks, restraining operations in accounts held by the petitioner. It is revealed that in the meanwhile the 3rd respondent had issued Ext.P7 interim order granting stay of collection of the tax amount in dispute. A conditional stay W.P.(C).31242/10-E -2- was granted till 31.12.2010 or till the date of disposal of the appeal, whichever is earlier, insisting on the petitioner to make payment of 50% of the amount, in 3 equal monthly installments commencing from October 2010 onwards. In Ext.P7 it is further stated that the attachment notices issued against the Banks (Ext.P5 series) will not be enforced if the petitioner furnishes a letter on or before 12.10.2010 undertaking that they will stick on to payment of 50% of the amount as insisted. 2. According to the petitioner the condition stipulated in Ext.P7 order is highly unreasonable and unjustifiable. So also the petitioner is impugning steps for recovery initiated under Ext.P5 series garnishee notices. According to the petitioner, when the 3rd respondent had imposed a condition for payment of 50%, a further direction for filing undertaking was not at all warranted. It was pointed out that the petitioner has got time till 30.10.2010 to make payment of the first installment as stipulated in Ext.P7. It is further submitted that the appeal now stands posted to 18.10.2010. Under such circumstances the insistence for furnishing undertaking within a short period of four days is not at all reasonable, is the contention. It was also contended that the condition imposed in Ext.P7 is causing onerous liability which is practically impossible to be complied with, within a short period. W.P.(C).31242/10-E -3- 3. Heard Sri. Jose Joseph, learned Standing Counsel appearing for Government of India (Taxes). Considering the fact that the challenge against Ext.P1 is now pending in appeal before the statutory authority, I am not looking into the merits of the assessment. Ext.P7 order is issued by the 3rd respondent in exercise of powers vested under the Act. The conditions imposed in Ext.P7 is a matter coming within the discretionary powers of the 3rd respondent. It is not proper for this court to interfere with such order, for bringing any alterations in the conditions imposed. The petitioner could not establish any legal grounds warranting interference on Ext.P7. 4. However, taking note of the fact that the appeal now stands posted for hearing before the 1st respondent on 18.10.2010, I am of the opinion that interest of justice will be achieved if that authority is directed to expedite disposal of the appeal. Therefore the 1st respondent appellate authority is directed to consider and pass orders on Ext.P2 appeal at the earliest, if possible on the basis of hearing scheduled on 18.10.2010 itself, at any rate, within a period of 6 (six) weeks from the date of receipt of a copy of this judgment. 5. Learned counsel for the petitioner had pointed out that the date stipulated for filing of the undertaking, i.e. on 12.10.2010, now stands expired. It is made clear that if the W.P.(C).31242/10-E -4- petitioner furnishes the undertaking on or before 5.11.2010, the same will be considered as due compliance of the conditions stipulated in Ext.P7. C.K.ABDUL REHIM, JUDGE. okb "