Coercive steps shall be kept in abeyance until rectification orders are passed

Manambur Service Co-Operative Bank Limited Vs ITO (Kerala High Court)

HC states that the rectification applications will be taken up for consideration by respondent without much delay, and affording reasonable opportunity of being heard to the petitioner through authorised representative/counsel, if any, may pass orders thereon without much delay preferably within a period of 4 to 6 weeks from the date of production of a certified copy of this judgment.

Further HC ordered that until orders are passed on  aforestated matter, further coercive steps for enforcement of the impugned orders shall be kept in abeyance by the respondents concerned.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

The facts projected in this Writ Petition (Civil) are as follows: The petitioner is a primary co-operative society who filed return of income for the assessment year 2015-16 declaring total income at Nil after claiming eligible deduction u/s 80P of the Income Tax Act, 1961. The assessing officer completed the assessment u/s 143(3) by Ext.P-1 order dated 29-11-2017 disallowing eligible deduction u/s 80(P)(2)(a)(i) of the Income Tax Act, 1961 and computed total income as Rs.41,28,889/- as against the declared income of Nil. Ext.P-2 demand notice u/s 156 for Rs.17,43,640/- also been issued. The assessment was done against the judgment of this Court in ITA.No.212/2013 dated 15.2.2016. The petitioner filed Ext.P3 statutory appeal before the 3rd respondent challenging Ext.P-1 assessment order. By Ext.P-4 order the 3 rd respondent allowed the appeal by granting deduction u/s 80(P)(2)(d)(a)(i) of the Income Tax Act, 1961, by deleting the tax amount assessed by the 1st respondent. After one year of Ext.P-4 order, the 3 rd respondent suo motu initiated rectification proceedings u/s 154 of the said Act stating that there is apparent mistake. The petitioner filed objection and also enlightened the 3rd respondent the clarification Circular No.133/6 dated 9.5.2017 issued by the Central Board of Direct Taxes that a co-operative society, irrespective of its classification or nomenclature, is eligible for deduction u/s80P. But without considering any of the objections raised by the petitioner, the 3 rd respondent unilaterally allowed the rectification petition as per Ext.P-6. Consequent to that, the 1st respondent issued Ext.P-7 order giving effect to the order of the 3rd respondent. Aggrieved by Ext.P-6 order, the petitioner filed Ext.P-8 petition for rectification of mistake u/s 154 of the Income Tax Act, 1961, which is pending before the 3rd respondent. Meanwhile, coercive steps are initiated to recover the disputed tax amount from the petitioner. The similar issues occurred for assessment years 2013-14 and 2008-09. The Exts.P-8, P-15 and P-21 statutory rectification petitions are pending before the 3rd respondent. But the 1st respondent initiated coercive steps by by Exts.P-22, P-23 and P-24 letters of demand to recover the disputed tax amount. It is in the light of these averments and contentions that the petitioner has filed the instant Writ Petition (Civil) with the following prayers:

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