2019 (8) TMI 300 - HC - Income Tax

Court grants stay on disputed tax amount pending appeal, directs expedited disposal.

THE PULPATTA CO-OPERATIVE URBAN CREDIT SOCIETY LTD., THE KARAKURISSI SERVICE CO-OPERATIVE BANK LTD, THE THACHAMPARA SERVICE CO-OPERATIVE BANK LTD., THE PATTAMBI SERVICE CO-OPERATIVE BANK LTD., THE POTTASSERY SERVICE CO-OPERATIVE BANK LTD. THE MUNDUR SERVICE CO-OPERATIVE BANK LTD. THE KUMARAMPUTHUR SERVICE CO-OPERATIVE BANK LTD., M/s. KONGAD SERVICE CO-OPERATIVE BANK LTD., THE THATHAMANGALAM SERVICE CO-OPERATIVE BANK LTD., THE PERINGODE SERVICE CO-OPERATIVE BANK LTD. AND THE MANNARKKAD GOVT EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD. Versus THE INCOME TAX OFFICER, PALAKAKD AND THE COMMISSIONER OF INCOME TAX (APPEALS), THRISSUR

THE PULPATTA CO-OPERATIVE URBAN CREDIT SOCIETY LTD., THE KARAKURISSI SERVICE CO-OPERATIVE BANK LTD, THE THACHAMPARA SERVICE CO-OPERATIVE BANK LTD., THE ... Issues:1. Challenge to orders of the Commissioner of Income Tax (Appeals) regarding deductions under Section 80P of the Income Tax Act.2. Change in law post assessments completion.3. Validity of insistence for payment of 20% of disputed tax amount for stay during appeal.4. Discretionary jurisdiction of Appellate Authorities.5. Interference with interim orders.6. Need for re-look at assessments in light of Full Bench ruling.7. Appellate Authority's role in determining deductions under Section 80P.Analysis:1. The writ appeals challenged the orders of the Commissioner of Income Tax (Appeals) regarding deductions under Section 80P of the Income Tax Act. The appellants, Co-operative Societies, contested the assessments of income tax claiming deductions under Section 80P. The Single Judge's identical judgments were collectively considered and disposed of through a common judgment.2. Post finalization of assessments, a change in the law occurred regarding deductions under Section 80P. A Full Bench decision stated that the Assessing Officer must conduct an inquiry into the activities of the Assessee society to determine if benefits can be extended. This necessitated a re-look at the assessments completed against the appellants.3. The contention was raised against the insistence for payment of 20% of the disputed tax amount for granting stay during the appeal. It was argued that this insistence was improper and unreasonable due to the reversal of the settled principle in a previous case.4. The standing counsel for the Government of India contended that the Assessing Authority had specific findings regarding the nature of activities conducted by the Co-operative societies. It was argued that there were no legal grounds for the court to interfere with the interim orders passed by the Appellate Authority.5. The court emphasized that interference with interim orders passed by statutory Appellate Authorities should be restrained under normal circumstances. The court highlighted the importance of considering the prima facie merit in appeals while granting interim stay.6. Due to the Full Bench ruling necessitating a re-look at the factual aspects of the appellant Co-operative societies' activities, the court directed the Appellate Authority to re-examine the allowability of deductions under Section 80P.7. The court allowed the appeals, set aside the Single Judge's judgments, and modified the interim orders to grant absolute stay on the realisation of the disputed tax amount pending disposal of the appeals. The Appellate Authority was directed to expedite the disposal of the appeals after affording an opportunity to the appellants.