High Court directs timely appeal decision, fair hearing, suspends coercive recovery. Writ Petition (Civil) safeguarding cooperative society's interests.

The High Court ordered the 1st appellate authority to promptly decide the appeal and provide the petitioner a fair hearing. All coercive recovery measures were suspended until the appeal's final decision, aligning with previous rulings. The Writ Petition (Civil) was disposed of with these directions, protecting the cooperative society's interests during the appeal process.

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Issues:
1. Disallowance of claim under Sec. 80P(4) of the Income Tax Act
2. Coercive steps for recovery of disputed amounts during appeal
3. Insistence on part payment for granting stay pending appeal

Analysis:
1. The petitioner society filed a Writ Petition (Civil) claiming the benefit under Sec. 80P(4) of the Income Tax Act for the period 2017-2018. The assessing authority disallowed the claim, demanding tax of Rs. 29,14,317. The petitioner appealed this decision, with coercive steps initiated for recovery during the appeal process.

2. The petitioner's counsel argued that a Full Bench judgment had addressed the liability of banks like the petitioner cooperative bank to pay income tax. Referring to the Full Bench decision, it was contended that the appellate authority could only remand the matter for fresh inquiry. The insistence on payment pending appeal was deemed prejudicial to the cooperative society, citing potential hardships.

3. The Standing Counsel for the Income Tax Department contended that the appellate authority's discretion regarding part payment for granting stay should not be interfered with. However, a Division Bench had previously ruled that in similar cases, the insistence on payment need not be upheld. The Division Bench ordered that coercive steps for recovery should be kept in abeyance until the final decision on the appeal, in line with the Full Bench dictum.

4. Considering the Division Bench's ruling, the High Court ordered the 1st appellate authority to promptly dispose of the appeal and afford the petitioner a reasonable opportunity to be heard. Until the final decision on the appeal, all coercive steps for enforcing the assessment order were to be suspended in the interest of justice. The Writ Petition (Civil) was finally disposed of with these observations and directions.

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