M/S. VELLANAD SERVICE CO-OPERATIVE BANK LTD. V. THE INCOME TAX OFFICER, WARD 2(3)

WP(C)/4336/2016

AI Insights

The case involves M/s. Vellanad Service Co-operative Bank Ltd., which challenged a conditional stay order imposed by the Commissioner of Income Tax (Appeals) regarding an assessment order under the Income Tax Act. The bank had appealed against the assessment order and filed a stay petition, which was granted conditionally, requiring the payment of 50% of the assessed amount. The bank contested this condition, citing similar cases where an unconditional stay was granted. The High Court found merit in the bank's argument and quashed the conditional stay order, directing a re-evaluation of the appeal without the imposed conditions.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 755572 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-02-2016
• Assessment Year: misc
• Other Referred Cases: M/S. Karakulam Service Co-operative Bank Ltd. vs. Unknown
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K M V PANDALAI; T R HARIKUMAR
• Assessee Lawyers: T M SREEDHARAN; V P NARAYANAN; DIVYA RAVINDRAN; V V VARGHESE
• Keywords: Appeal; Assessment Order; Conditional stay; Income Tax; Recovery of Amounts; Stay Petition
• Section: 80P; 226(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR THURSDAY, THE 4TH DAY OF FEBRUARY 2016/15TH MAGHA, 1937 WP(C).No. 4336 of 2016 (N) --------------------------- PETITIONER(S): M/S. VELLANAD SERVICE CO-OPERATIVE BANK LTD., BANK BUILDING, NEAR KSRTC BUS STAND, VELLANAD, THIRUVANANTHAPURAM - 695 543, REPRESENTED BY ITS SECRETARY-IN-CHARGE SMT.J.AMBIKA DEVI. BY ADVS.SRI.T.M.SREEDHARAN (SR.) SRI.V.P.NARAYANAN SMT.DIVYA RAVINDRAN SRI.V.V.VARGHESE RESPONDENT(S): 1. THE INCOME TAX OFFICER, WARD 2(3), TRIVANDRUM - 695 001. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), 2ND FLOOR, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM - 695 001. 3. THE MANAGER, THE TRIVANDRUM DISTRICT CO-OPERATIVE BANK LTD., KADAVKKAVUR BRANCH, TRIVANDRUM - 695 001. BY SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT BY SRI.T.R.HARIKUMAR, SC, THIRUVANANTHAPURAM DIST. CO-OPERATIVE BANK LTD. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04-02-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rvs. WP(C).No. 4336 of 2016 (N) APPENDIX PETITIONER(S)' EXHIBITS : EXT. P1 - TRUE COPY OF THE ASSESSMENT ORDER DT. 28.3.2014 ALONGWITH COMPUTATION OF INCOME AND DEMAND NOTICE PASSED BY THE FIRST RESPONDENT. EXT. P2 - TRUE COPY OF THE MEMORANDUM OF APPEAL DT. 28.4.2014 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXT.P2(A)- TRUE COPY OF STAY PETITION DT. 30.10.2014 SUBMTTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXT. P3 - TRUE COPY OF NOTICE DT. 24.3.2015 ISSUED U/S 226(3) BY THE 1ST RESPONDENT. EXT. P4 - TRUE COPY OF THE JUDGMENT DT. 31.3.2015 IN WPC NO. 10614/2015 OF THIS HON'BLE COURT. EXT. P5 - TRUE COPY OF STAY ORDER DT. 29.6.2015 IN ITA NO. 20/TVM/CIT(A), TVM/SAL/2014-15 PASSED BY THE 2ND RESPONDENT. EXT. P6 - TRUE COPY OF INTERIM ORDER DT. 31.3.2015 IN IA NO. 885/2015 IN ITA NO. 156/2014 PASSED BY THIS HON'BLE COURT IN THE CASE OF M/S. KARAKULAM SERVICE CO-OPERATIVE BANK LTD., P.O.KARAKULAM, THIRUVANANTHAPURAM. RESPONDENT(S)' EXHIBITS: NIL. /TRUE COPY/ P.A.TO JUDGE rvs. A.K.JAYASANKARAN NAMBIAR, J. =========================================== W.P.(C). No. 4336 of 2016 ===================================================== Dated this the 4th day of February, 2016 JUDGMENT Against Ext.P1 assessment order under the Income Tax Act, the petitioner preferred Exts.P2 appeal and Ext.P2(a) stay petition before the 2nd respondent. The stay petition was considered by the 2nd respondent and by Ext.P5 order, the 2nd respondent directed payment of 50% of the amount confirmed against the petitioner by Ext.P1 assessment order as a condition for grant of stay of recovery of the balance amount. In the writ petition, Ext.P5 conditional order of stay of the 2nd respondent is impugned, inter alia, on the ground that the issue under consideration in the appeal is one pertaining to the entitlement of the petitioner for the benefit of Section 80P of the Income Tax Act. It is pointed out that, there are various income tax appeals on the same issue, which are pending consideration before the Division Bench of this Court, and in all those cases the Division Bench has granted an unconditional stay against recovery. Taking note of the said submission of counsel for the petitioner, I am of the view that Ext.P5 conditional order cannot be legally sustained. I therefore, quash Ext.P5 order and direct the 2nd respondent to consider and pass orders on Ext.P2 appeal preferred by the petitioner within a period of four months from the date of receipt of a copy of this judgment, after hearing the -2- W.P.(C). No. 4336 of 2016 petitioner. Recovery steps for recovery of amounts confirmed against the petitioner by Ext.P1 assessment order shall be kept in abeyance till such time as orders are passed by the 2nd respondent as directed and communicated the same to the petitioner. 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 das /04.02.2016 "