Wp(C) v. Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. TUESDAY, THE 12 DAY OF JULY 2022 / 21ST ASHADHA, 1944WP(C) NO. 12676 OF 2022 PETITIONER/S: M/S.KARAKULAM SERVICE CO-OPERATIVE BANK LTDKP-1.382M KARAKULAM-PO, NEDUMANGAD, TRIVANDRUM-695 564,REPRESENTED BY ITS SECRETARY.SHRI. B. BIJUKUMAR. BY ADVS.T.M.SREEDHARAN (SR.)NISHA JOHNALAN PRIYADARSHI DEVV.P.NARAYANAN RESPONDENT/S: ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER INCOME TAX /NATIONAL FACELESS ASSESSMENT CENTRENORTH BLOCK, NEW DELHI-1110 001SRI. CHRISTOPHER ABRAHAM SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON12.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Petitioner has approached this Court, being aggrieved byExt.P1 order, imposing penalty under Section 271(1)(c) of theIncome Tax Act,1961. 2.The assessment against the petitioner for the year2014-15 was completed on 27.12.2016. The matter finallyreached the Tribunal from where it was remanded to theAssessing Officer for reconsideration. The Assessing Officerpassed the same order which was confirmed by the FirstAppellate Authority and again, the matter went to theTribunal. The Tribunal has, by order dated 19.05.2020, againremanded the matter for consideration of the First AppellateAuthority. It is submission of the learned counsel appearingfor the petitioner that Ext.P1 order imposing penaltyessentially arises out of the proceedings finalized against thepetitioner as above by the Assessing Officer which is now atlarge before the First Appellate Authority, following the orderof remand by the Tribunal on 19.05.2020. It is submitted that,in the meanwhile, the issue has been also settled by theJudgment of the Hon’ble Supreme Court in Mavilayi ServiceCo-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KHC 303]. It is submitted that the question as towhether any penalty can be imposed will depend on the ordersto be passed by the First Appellate Authority followingremand by the Tribunal. 3.Heard the learned Standing Counsel appearing forthe respondents. Learned Standing Counsel points out thatthere is no ground for the petitioner to challenge Ext.P1 orderof penalty before this Court directly under Article 226 of theConstitution of India. It is submitted that the petitioner has aneffective alternative remedy against Ext.P1 and it is notnecessary for this Court to examine the question as to whetherthe petitioner is liable for penalty under Section 271(1)(c) ofthe Income Tax Act, at this stage. It is submitted that theassessment and penalty are separate proceedings and merelybecause the assessment is now at large before the FirstAppellate Authority, that does not mean that the order ofpenalty is bad in any manner. 4.Having heard the learned counsel appearing for thepetitioner and the learned Standing counsel appearing for therespondent Department, I am of the view that the question asto whether the petitioner is liable for any penalty will dependon the orders to be passed by the First Appellate Authority, ajt following the remand by the Tribunal through order dated19.05.2020. Still further, I note that the Hon’ble SupremeCourt in Mavilayi (supra) has decided the question as towhether Societies like the petitioner are entitled to exemptionunder Section 80P of the Income Tax Act. That is also a matterwhich will have to be considered by the First AppellateAuthority, following remand by the Tribunal. Taking all theabove facts into consideration, I am of the view that Ext.P1order can be set aside, making it clear that setting aside ofExt.P1 will not bar initiation of fresh proceedings forimposition of penalty, if the same is found necessary at a laterstage. The Writ petition is allowed in the manner indicatedabove. sd/- GOPINATH P.JUDGE WP(C) NO. 12676 OF 2022 5 APPENDIX OF WP(C) 12676/2022 The Writ petition is allowed in the manner indicatedabove. sd/- GOPINATH P.JUDGE WP(C) NO. 12676 OF 2022 5 APPENDIX OF WP(C) 12676/2022 PETITIONER EXHIBITSExhibit P1 Exhibit P2 Exhibit P3 TRUE COPY OF THE ORDER UNDER SECTION 271(1)(C0 OF THE INCOME TAX ACT,1961 DATED 25.3.2022 FOR THE ASSESSMENT YEAR 2014-15 ISSUED BY THE RESPONDENT TRUE COPY OF THE ORDER DATED 4.10.2018 IN CIVIL APPEAL NO 7526/2011 OF THE HON'BLE SUPREME COURT OF INDIA. A TRUE COPY OF THE ORDER OF THE APPELLATE TRIBUNAL DATED 2.8.2018 IN NO 644/COCH/2017 FOR THE ASSESSMENT YEAR 2014-15