Wp(C)/36254/2010 Of The Kondotty Service Co-Op.bank Ltd v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 6TH DECEMBER 2010 / 15TH AGRAHAYANA 1932 WP(C).No. 36254 of 2010(F) -------------------------------------- PETITIONER: ------------------- THE KONDOTTY SERVICE CO-OPERATIVE BANK LTD.NO.D.1937, REP. BY ITS PRESIDENT, KONDOTTY P.O., MALAPPURAM DISTRICT. BY ADV. SRI.U.K.DEVIDAS. RESPONDENTS: ------------------------ 1. THE INCOME TAX OFFICER (CIB), OFFICE OF ASSISTANT DIRECTOR OF INCOME TAX(INV.), KOZHIKODE – 673 001. 2. THE ASSISTANT DIRECTOR OF INCOME TAX, KOZHIKODE – 673 001. 3. THE COMMISSIONER OF INCOME TAX (CIB), COCHIN, ERNAKULAM – 13. 4. UNION OF INDIA, REPRESENTED BY THE SECRETARY TO THE GOVERNMENT OF INDIA, MINISTRY OF FINANCE, NEW DELHI – 1. R1 TO R4 BY SRI. JOSE JOSEPH, S.C. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06/12/2010, ALONG WITH W.P.(C). NO. 36255/2010 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).Nos.36254,36255,36256, 36278,36288 & 36289 of 2010 ------------------------------------------- Dated this the 6[th] day of December, 2010 J U D G M E N T---------------------- The petitioners in these cases are Service Co-operativeSocieties registered under the provisions of the Kerala Co-operative Societies Act. Challenge is against sustainabilityof notices issued under Section 133(6) of the Income TaxAct, interalia on the basis of the contention that, thepetitioners are not 'persons' coming within the purview ofIncome Tax Act. 2.The issue was subject matter of challenge beforethis Court in a batch of writ petitions, which ultimatelyculminated in a judgment of a Division Bench, inW.A.No.2333 of 2009 and connected cases. This Courtupheld the validity of similar notices, however, making itclear that such notices can be issued only with priorpermission of the Director or the Commissioner, as the casemay be, and clarified that if such notices does not disclosesuch prior permission the matter need be re-examined bythe authority concerned and further proceedings shall bepursued only after obtaining such permissions. 3.It is brought to my notice that Special Leave Petitionfiled against the above said judgment as SLP(C) No.3976 of 2010has already been admitted by the Hon'ble Supreme Court and aninterim stay was granted against operation of the judgment ofthe Division Bench. This being the position, I am of the view thatthe authorities of the Income Tax Department concerned are notjustified in proceeding with issuing similar notices to thepetitioners herein, till the issue is finally settled by the apexcourt. 4.Under the above mentioned circumstances, these writpetitions are allowed and the respondents concerned aredirected to keep in abeyance all further steps pursuant to thenotices issued under Section 133(6) of the Income Tax Act, forthe time being. It is made clear that steps can be pursued onlysubject to final outcome of the matter now pending before theHon'ble Supreme Court in S.L.P(C) No.3976 of 2010 andconnected cases. C.K.ABDUL REHIM, JUDGE. okb