Kerala High Court: Recovery proceedings against Poothrikka Bank At Halt until IT Commissioner Disposes of Pending Appeal

Kerala High Court: Recovery proceedings against Poothrikka Bank At Halt until IT Commissioner Disposes of Pending Appeal

The Kerala High Court (HC) in the case titled Poothrikka Service Co-Operative Bank (Petitioner) v. Income Tax Officer & Ors. (Respondents) suspended the recovery proceedings against the petitioner until the Income Tax Commissioner disposes of the pending appeal.

The HC single-judge Justice A.M. Badar directed the respondent to decide the pending appeals expeditiously and till then the respondents are directed to keep the recovery proceedings pursuant to the assessment order in abeyance.

The assessment order denying the benefit of Section 80(P) of the Income Tax Act (IT Act) has been challenged by the petitioners by filing statutory appeals before the Commissioner of Income Tax (Appeals) [CIT(A)].

The Assessing Officer (AO) during the pending appeals has communicated to the petitioners that it is liable to pay 20 percent of the demand and then apply for a stay of demand.

The counsel representing the respondents argued that the petitioners can at the most preferred stay petitions and can seek to stay in the impugned orders.

The question which is pending adjudication before the appellate authority is-

Whether the petitioners who are cooperative Societies are entitled to deduction under Section 80 (P) of the IT Act?

The AO has denied the benefit of Section 80 (P) of the IT Act to the petitioner societies.

In the matter of Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut, reported in [2019(2) KHC 287], the question regarding the liability of the co-operative societies to pay the income tax assesses was decided.

The HC put reliance on the aforesaid judgment and has quashed the action on the part of respondents with the direction that the Commissioner of the Income Tax should consider the matter.

The Court while referring to the ratio of the matter titled Angadipuram Service Co-operative Bank Ltd. v. The Commissioner of Income Tax (Appeals) allowed the writ petitions and directed the respondent to decide the pending appeals expeditiously and till then the respondents are directed to keep the recovery proceedings pursuant to the assessment order in abeyance.