Wa/505/2020 Of Edarikode Service Co-Operative Bank Limited v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MR. JUSTICE T.R.RAVI THURSDAY, THE 12TH DAY OF MARCH 2020 / 22ND PHALGUNA, 1941 WA.No.505 OF 2020 AGAINST THE JUDGMENT IN WP(C) 4106/2020 OF HIGH COURT OF KERALA APPELLANT: EDARIKODE SERVICE CO-OPERATIVE BANK LIMITEDNO.F 10739,EDARIKODE.P.O,MALAPPURAM DISTRICT, PIN-676501,REPRESENTED BY ITS SECRETARY-IN-CHARGE. BY ADV. SRI.C.A.JOJO RESPONDENTS: 1THE INCOME TAX OFFICERWARD-3,TIRUR TOWN HALL ROAD, TIRUR.P.O,PIN-676101. 2THE COMMISSIONER OF INCOME TAX(APPEALS),OFFICE OF THE COMMISSIONER OF INCOME TAX(APPEALS),AAYAKAR BHAVAN, MANANCHIRA.P.O, KOZHIKODE-673001. OTHER PRESENT: SC,IT DEPT. SRI.CHRISTOPHER ABRAHAM THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 12.03.2020,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K. ABDUL REHIM & T.R. RAVI, JJ. =========================W.A. No. 505 of 2020 ========================= Dated this the 12[th] day of March, 2020 J U D G M E N T C.K. ABDUL REHIM, J. Petitioner in W.P.(C).No. 4106 of 2020 is in appealagainst the judgment of the single Judge, dated13.02.2020. The respondents herein are the respondentsin the writ petition. 2.The writ petitioner sought for a stay ofoperation of Exts.P11 & P12 Demand Notices issued, tillthe disposal of Exts.P9 & P10 applications forrectifications filed by him before the 2[nd] respondent. Interalia, he sought for a direction to the 2[nd] respondent toconsider and pass appropriate orders on Exts.P9 & P10rectification petitions, on an early basis. Evidently, theassessments were completed against the petitioner with respect to the years 2008-09 and 2013-14, which orderswere challenged in appeals before the 2[nd] respondent, asper Exts.P5 & P6. Those appeals were dismissed throughthe orders passed on 12.12.2019. According to the writpetitioner, the said orders (Exts.P7 & P8) were receivedby him only on 03.02.2020. Since it is felt that thereoccurred an apparent error on the face of the orders, thepetitioner had chosen to file rectification applicationsbefore the Appellate Authority, as evidenced from Exts.P9& P10, dated 08.02.2020. But the assessing authority hadproceeded with coercive steps for realization of theamounts due; and Exts.P11 & P12 notices were issued. Itis under such circumstances, the above writ petition wasfiled. 3.Before the learned Single Judge it wascontended on behalf of the respondents that therectification applications were filed only after receipt ofthe Demand Notices. However, the learned Single Judgeobserved that, the writ petition can be disposed of by Before the learned Single Judge it was directing the 2[nd] respondent to take a decision on Exts.P9& P10 applications, as expeditiously as possible, at anyrate, within a period of two months from the date ofreceipt of a copy of the judgment. It was further directedthat, till such time Exts.P9 & P10 rectification applicationswere disposed of, Exts. P11 & P12 notices shall be kept inabeyance, subject to condition of the writ petitionerfurnishing Bank Guarantee with respect to the entiredemand. The condition imposed to the extent of insistingBank Guarantee for the entire amount due, is the subjectof challenge upon which the above writ appeal is filled. 4.Heard; learned counsel for the appellant andlearned Standing Counsel appearing for the respondents. 5.We take note of the fact that, the appellant hadchosen to exercise the remedy of rectification before theAppellate Authority himself. In other words, he has notchosen to avail the remedy of 2[nd] appeal before theTribunal. Question now agitated is with respect tosustainability of the recovery steps initiated pending 4.Heard; learned counsel for the appellant andlearned Standing Counsel appearing for the respondents. 5.We take note of the fact that, the appellant hadchosen to exercise the remedy of rectification before theAppellate Authority himself. In other words, he has notchosen to avail the remedy of 2[nd] appeal before theTribunal. Question now agitated is with respect tosustainability of the recovery steps initiated pending disposal of the rectification applications. We are of theconsidered opinion that, the appellant could have movedbefore the Appellate Authority himself, seeking stay ofrecovery of the amounts, pending disposal of therectification applications. Having not done so, theapproach made before this court by invoking powersvested under Article 226 of the Constitution of India,cannot be sustained. Whether the Appellant is entitled toget a stay against the recovery steps, pending disposal ofthe rectification applications, is a matter which ought tohave been considered by the Appellate Authority, at thefirst instance. Therefore we are of the opinion that, libertycan be reserved to the appellant to approach theAppellate Authority seeking for stay of the recovery,pending disposal of the rectification applications. Hencewe are inclined to modify the impugned judgment to thateffect. 6.Hence, the above writ appeal is hereby allowedto the extent of modifying the impugned judgment in W.P.(C).No. 4106 of 2020. The appellant is permitted tomove appropriate interim applications seeking stay of therecovery, pending disposal of Exts.P9 & P10 applicationsfor rectification, before the 2[nd] respondent. If any suchapplications are filed, within one week from the date ofreceipt of a certified copy of this judgment, the 2[nd]respondent shall consider the same and shall passappropriate orders thereon, within a period of two weekof filing of such applications. Steps of recovery initiatedbased on the Demand and any further proceedings ofrecovery shall be proceeded only depending upon theoutcome of the orders which will be passed by theAppellate Authority in the stay petitions. In order to facilitate the appellant to move such applications before the Appellate Authority, and theAppellate Authority to consider the same, furthercoercive steps for recovery pursuant to Exts.P11 &Ext. P12 Notices shall be kept in abeyance till the abovedirection is complied with. It is made clear that, the directions contained in the impugned judgment withrespect to expeditious disposal of Exts.P9 & P10 wouldcontinue to survive. (Sd/-)JUDGE C.K. ABDUL REHIM (Sd/-) T.R. RAVI JUDGE LU APPELLANT'S/S EXHIBITS: APPENDIX ANNEXURE AA TRUE COPY OF THE JUDGMENT IN W.P.(C).NO. 4115 OF 2020 DATED 13.02.2020. ANNEXURE B A TRUE COPY OF THE JUDGMENT IN W.P.(C).NO. 601 OF 2020 DATED 22.01.2020. // True Copy // PA To Judge