Wp(C)/8516/2020 Of The Puthenchira Service Co-Operative Bank Ltd v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941WP(C).No.8516 OF 2020(L) PETITIONER: THE PUTHENCHIRA SERVICE CO-OPERATIVE BANK LTD NO. 2264 PUTHENCHIRA, MALA, THRISSUR-680682, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.P.C.SASIDHARAN RESPONDENTS: 1THE INCOME TAX OFFICERWARD 2(4), THRISSUR, OFFICE OF THE INCOME TAX OFFICER, SHAKTHANTHAMPURAN NAGAR, THRISSUR-680001.WARD 2(4), THRISSUR, OFFICE OF THE INCOME TAX OFFICER, SHAKTHANTHAMPURAN NAGAR, THRISSUR-680001. 2THE COMMISSIONER OF INCOME TAX (APPEALS),AAYAKAR BHAVAN, S.T.NAGAR, THRISSUR-680001.AAYAKAR BHAVAN, S.T.NAGAR, THRISSUR-680001. 3THE INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH, ERNAKULAM-682001.COCHIN BENCH, ERNAKULAM-682001. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON18.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT The petitioner is a primary Agricultural Co-operative Credit Society registered under the provisions of Kerala Co-operative Societies Act and Rules framed thereunder. 2.The first respondent completed the assessment ofthe income tax pertaining to the following assessment years,which reads as under : 3.The petitioner against the aforementioned assessment orders preferred nine appeals before theCommissioner of Income Tax (Appeals) along with the stay petitions. Since the stay was declined, the petitionerapproached this Court vide Writ Petition (C) No.28170 of 2019dated 23.10.2019. This Court disposed of the Writ Petitiondirecting the second respondent to consider and pass orderson the appeals within the limit of six months from the date ofreceipt of the certified copy of the judgment and in themeantime, coercive steps for recovery of the amount wasordered to be kept in abeyance. 4.Sri.P.C.Sasidharan, the learned counsel appearing onbehalf of the petitioner, submits that the Commissioner ofIncome Tax (Appeals) dismissed the appeals vide order dated18.2.2020. The aforementioned orders of the Commissionerof Income Tax (Appeals) were communicated to the petitioneron 26[th] February, 2020 and 8[th] March, 2020 respectively. Thepetitioner immediately took steps to prepare appeals and filethe same in accordance with law before the Income TaxAppellate Tribunal as 60 days is available to prefer suchappeal. The recovery officer without adhering to the provisionsof sub section (3)(iii) of Section 226 issued a notice of garnishee to the Bank to obtain Rs.36,83,875/- and7,88,73,094/-. The petitioner was not given any breathingtime to file the appeals. A meeting was held in the office ofthe Principal Commissioner and it was ordered that the draftswould be kept in the safe custody of the Bank. But forrunning the business of the Society working capital is requiredand in view of the garnishee notice and preparation of thedemand drafts, the petitioner Co-operative Society is unableto transact any business or carry out its daily activities. Thereare about 14 employees on the roll of the Society. Thepetitioner though have preferred Ext.P8 to Ext.P8(h) appealsbefore the Income Tax Appellate Tribunal and Ext.P9 to P(h)stay applications dated 16.3.2020, but, in the absence of anyinterdiction, a very anomalous situation, has arisen in the fairworking of the Society. The petitioner is willing to deposit15% of the demanded amount in case the draft prepared bythe Bank in favour of the income tax authorities are ordered tobe not encashed and account is regularised. 5.The learned counsel appearing for the petitioner 5.The learned counsel appearing for the petitioner submits that he do not dispute the orders passed by theCommissionerof Income Tax (Appeals) and filing of the appealmuch less the preparation of the demand drafts. The learnedcounsel also submits that no doubt that the petitioner hadpreferred appeals, an appropriate direction can be in thepeculiar facts and circumstances issued to the Tribunal todecide the appeals within some time, provided the petitionerexpresses bonafides in depositing a substantial amount of taxat least to the extent of 15% in order to secure the interest ofthe revenue. 6.Having heard the learned counsel for the partiesand perused the paper book, the grievances as noticed abovehas some force. The appeals were preferred on 16[th] March,2020. Though the period of limitation had not expired, butgoing through the circumstances resulting into preparation ofthe demand drafts as noticed above, the working of the Co-operative Society has come to a halt. Instead of directing theTribunal to decide the application firstly, I deem it appropriateto issue directions to the Tribunal to decide the appeals within some time line and in order to enable the petitioner it seemsappropriate to direct the income tax officer not to press for theencashment of the demand drafts, provided the petitionerdeposits at least 30% of the demanded tax within a period ofone week from today. On receipt of the aforementioned tax,the demand drafts would be cancelled. The petitioner shall bepermitted to transact the Bank account maintained with theBank. The Tribunal in such circumstances shall endeavour todecide the appeals within a period of six months. Till suchtime this arrangement will continue.This Writ Petition is disposed of. Sd/- AMIT RAWAL JUDGE csl PETITIONER'S EXHIBITS: APPENDIX EXHIBIT P1TRUE COPY OF THE ASSESSMENT ORDER FOR THEYEAR 2008-2009. EXHIBIT P2TRUE COPY OF THE JUDGMENT IN W.P(C)NO.28170/2019. EXHIBIT P3TRUE COPY OF THE ORDER PASSED BY THE 2ND RESPONDENT DATED 18.02.2020.RESPONDENT DATED 18.02.2020. EXHIBIT P4TRUE COPY OF THE ORDER PASSED BY THE 2ND RESPONDENT DATED 18.02.2020.RESPONDENT DATED 18.02.2020. EXHIBIT P5 TRUE COPY OF THE NOTES OF SUBMISSION SUBMITTED BY THE PETITIONER.SUBMITTED BY THE PETITIONER. EXHIBIT P6 TRUE COPY OF THE MINUTES. EXHIBIT P7 TRUE COPY OF THE NOTICE.TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2008-09.TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2008-09. EXHIBIT P8 EXHIBIT P8(a)TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2009-10.2009-10. EXHIBIT P8(b)TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2010-11.2010-11. EXHIBIT P8(c)TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2012-13.2012-13. EXHIBIT P8(d)TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2013-14.2013-14. EXHIBIT P8(e)TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2014-15.2014-15. EXHIBIT P8(f)TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2015-16.2015-16. EXHIBIT P8(g)TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2016-17.2016-17. EXHIBIT P8(h) TRUE COPY OF THE APPEAL MEMORANDUM YEAR 2017-18. EXHIBIT P9TRUE COPY OF THE STAY PETITION YEAR 2008-09. EXHIBIT P9(a)TRUE COPY OF THE STAY PETITION YEAR 2009-10. EXHIBIT P9(b)TRUE COPY OF THE STAY PETITION YEAR 2010-11.11. EXHIBIT P9(c)TRUE COPY OF THE STAY PETITION YEAR 2012-13.13. EXHIBIT P9(d)TRUE COPY OF THE STAY PETITION YEAR 2013-14. EXHIBIT P9(e)TRUE COPY OF THE STAY PETITION YEAR 2014-15. EXHIBIT P9(f)TRUE COPY OF THE STAY PETITION YEAR 2015-16. EXHIBIT P9(g)TRUE COPY OF THE STAY PETITION YEAR 2016-17. EXHIBIT P9(h)TRUE COPY OF THE STAY PETITION YEAR 2017-18.