In a significant ruling related to demand of Income Tax on denial of benefit under section 80 P of the Income Tax Act, 1961, the Kerala High Court set aside recovery on pendency of appeal before Income Tax Appellate Tribunal ( ITAT ).
Certain assessments were completed against Peroorkada Service Co-Operative Bank Ltd, the petitioner under the provisions of the Income Tax Act, 1961, for the years 2012-13, 201314, 2014-15, 2016-17, 2017-18 and 2018-19. The appeals against the orders of assessment for the years 2012-13 and 2013-14 are pending before the 3rd respondent and second appeals filed against the orders of assessment for the years 2016-17, 2017-18 and 2018-19 are pending before the 4th respondent-Tribunal.
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For the year 2014-15 also, an application for rectification of mistake is pending before the Tribunal. The petitioner has approached the Court, being aggrieved by the fact that the amounts due under the orders of assessment are being sought to be recovered by attaching the bank accounts maintained by the petitioner with the 5th respondent bank.
Counsel appearing for the petitioner submitted that most of the demands arise out of the denial of benefits of Section 80P of the Act and that going by the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd. v.Commissioner of Income Tax [2021] , the petitioner is entitled to substantial reliefs in respect of the demands. It was pointed out that, in cases where claim for deduction under Section 80P of the Act has been denied in similar circumstances, the demands have been stayed pending consideration of the appeals etc., by the Appellate Authority.
The single bench of Justice Gopinath P disposed of the writ petition directing that the steps for recovery of any demands finalized against the petitioner for the years 2012-13 and 2013-14 shall stand deferred till appeals filed for the said years are heard and disposed of by the 3rd respondent and till the appeals filed for the years 2016-17, 2017-18 and 2018-19 are heard and disposed of by the 4th respondent-Tribunal. Recovery relating to the demand arising for the year 2014-15 will be deferred till a decision is taken on the application for rectification of mistake by the 4th respondent-Tribunal.
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The court set aside the demand under the Income Tax Legislation. The petitioner was represented by Advs. C.A.Jojo S.Jiji and Joseph Anu A.A. The respondent was represented by Adv. P.G. Jayashankar and Adv.Thomas Abraham
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