Wp(C)/36113/2022 Of M/S.mugu Service Co-Operative Bank Ltd v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 11 DAY OF NOVEMBER 2022 / 20TH KARTHIKA, 1944WP(C) NO. 36113 OF 2022 PETITIONER: M/S.MUGU SERVICE CO-OPERATIVE BANK LTD.,MUGU P.O.,KASARAGOD – 671 321, REPRESENTED BY ITS SECRETARY IN CHARGE,SMT. UMALATHA A. BY ADVS.ALAN PRIYADARSHI DEVV.P.NARAYANANT.M.SREEDHARAN (SR.) RESPONDENTS: 1THE INCOME TAX OFFICER,WARD 1 & TPS,AAYAKAR BHAVAN,VIDYA NAGAR,KASARAGOD – 671 123, KERALA STATE.2ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX OFFICER,NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL STADIUM, DELHI – 110 003.3THE COMMISSIONER OF INCOME TAX (APPEALS),NATIONAL FACELESS APPEAL CENTRE,INCOME TAX DEPARTMENT, MINISTRY OF FINANCE,JAWAHARLAL STADIUM,DELHI – 110 003. ADV. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON11.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT The assessment of the petitioner under the provisions ofthe Income Tax Act for the assessment year 2017-18 wasoriginally completed by Ext.P3 order dated 27.03.2022. Theassessing officer (the 1[st] respondent herein) thereafter issuedExt.P4 order rectifying the assessment in exercise ofjurisdiction under Section 154 of the Income Tax Act, againstwhich the petitioner has filed Ext.P5 appeal along with Ext.P6stay petition before the National Faceless Appeal Centre (3[rd]respondent). Pending consideration of the stay petition, the1[st] respondent has also issued an order imposing penaltyunder Section 270A of the Income Tax Act, 1961 throughExt.P7 order dated 23.09.2022. It is the case of the petitionerthat Ext.P4 order of rectification is completely illegal andunsustainable as the rectification was made without affordingto the petitioner any sort of opportunity to object. It issubmitted that Ext.P7 order imposing penalty has also beenissued without affording any opportunity to the petitioner. It issubmitted that the orders are, therefore, illegal and arbitrary.The petitioner apprehends that recovery proceedings may be WP(C) NO. 36113 OF 2022 initiated to recover amounts due under Exts.P4 and P7pending consideration of the appeal by the appellateauthority. 2.Having regard to the facts and circumstances ofthe case and taking into consideration of the submission ofthe learned counsel appearing for the petitioner that bothExts.P4 and P7 orders have been issued without affording tothe petitioner any opportunity, I am of the opinion that thedemands, if any, pursuant to Exts.P4 and P7 shall be kept inabeyance till the appeal is disposed of by the 3[rd] respondent.Accordingly, this writ petition is disposed of directing the 3[rd]respondent to consider and pass orders on Ext.P5 appeal afteraffording to the petitioner an opportunity of hearing, within aperiod of six months from the date of receipt of a certifiedcopy of this judgment. Till such time as orders are passed,any proceedings for recovery of amounts due under Exts.P4and P7 shall be kept in abeyance. Sd/-GOPINATH P.JUDGE APPENDIX OF WP(C) 36113/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY THE 1ST RESPONDENT DATED 13.12.2019 FOR THE ASSESSMENT YEAR 2017-18 Exhibit P2 TRUE COPY OF THE ORDER OF ITAT COCHIN BENCH IN LTA NO.355/COCH/2020 DATED 21.10.2020. Exhibit P3 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY THE 2ND RESPONDENT ALONG WITH DEMAND NOTICE DATED 27.03.2022. Exhibit P4 TRUE COPY OF THE RECTIFICATION ORDER PASSED BY THE 1ST RESPONDENT DATED 22.09.2022 Exhibit P5 TRUE COPY OF THE APPEAL MEMORANDUM SUBMITTED BEFORE THE 3RD RESPONDENT DATED 22.10.2022 Exhibit P6 TRUE COPY OF THE STAY PETITION DATED 13/10/2022 SUBMITTED BEFORE THE 3RD RESPONDENT Exhibit P7 TRUE COPY OF THE PENALTY ORDER ISSUED BY THE 1ST RESPONDENT DATED 23.09.2022