- Vide decision of High Court of Kerala in Aranattukara Oriental Service Co-Operative Bank Ltd. Vs Commissioner of Income Tax
Facts of the case:
- Petitioner is a primary Co-operative Agricultural Credit Society registered under the Kerala Co-operative Societies Act. Petitioner is an assessee on the file of the Commissioner of Income tax. While so, the Commissioner issued a notice under Section 156 of the Income tax Act pertaining to the assessment year 2017-18.
- Aggrieved by the assessment order petitioner preferred appeal before the Income tax Officer along with a stay application. It is submitted that neither the appeal nor stay petition has been considered by the Commissioner.
- Apprehending coercive action, petitioner has approached this Court by filing this writ petition.
- Commissioner submits that the order is in consonance with the provisions of Section 144 of the Income Tax Act and the Circular dated 31.7.2017 mandating the appellate authorities to ask for deposit 20% of the amount for the purpose of entertaining the adjudication of the appeal.
Judgement:
The Honorable High court of Kerala held the case as follows:
- The assessing officer or the appellate authority while exercising the power of appeal or stay of the assessment proceedings under section 226 of the Income Act 1961 are enjoined obligation to give regard and respect to the directions of the Hon'ble High Court.
- In other words, it would not be necessary that the payment of 20% can be dispensed with only if there is an order of the high court.
- The judgment of the Full Bench followed by the Division Bench has an enuring effect on all the authorities.
There will be a direction to the Income tax officer to decide the appeal on merits within a period of six months, without asking for 20% of the demanded amount, after affording an opportunity of hearing to the petitioner and the revenue and pass a reasonable and speaking order.