Case BriefsHigh Courts

Kerala High Court: N. Nagaresh, J. disposed of the writ petition seeking to consider and dispose of appeals by the appellant prior to coercive action by the Income Tax authorities.

In the present case, the petitioner-Bank, being a Service Co-operative Bank registered under the Kerala Co-operative Societies Act, 1969 were issued with income tax assessment orders for the years 2009-2010, 2010-11, 2016-17 and 2015-16. The petitioner bank had filed an appeal being aggrieved by the assessment orders. During the pendency of the appeals, the Income-tax Officer had issued notices under Section 221(1) of the Income Tax Act, 1961 seeking recovery of the amount.

Sri O.D. Sivadas counsel representing the petitioner-Bank, by placing reliance on the judgments passed by the present High Court, submitted that the appellate authority should consider the appeals preferred by the Banks on a priority basis and until the final disposition of the case, any coercive action shall be avoided. The counsel relied on Mavilayi Service Co-operative bank Ltd. v. Income Tax Officer, 2013 SCC OnLine Ker 838 wherein it directed that the Commissioner of Income Tax (Appeals) consider and dispose of statutory appeals filed by the appellant therein at the earliest.

High Court upon hearing the pleadings of the petitioner decided on disposing of the present case in a similar manner. Hence, the court directed that the further steps of coercive action shall not be resorted to against the petitioner.[Annamanada Service Co-operative Bank Ltd. v CIT, 2019 SCC OnLine Ker 3011 , decided on 17-09-2019]

Case BriefsHigh Courts

Punjab and Haryana High Court: This order disposed of five appeals filed by revenue under Section 260-A of Income Tax Act, 1961 before a Division Bench of Ajay Kumar Mittal and Avneesh Jhingan, JJ., against the order passed by Income Tax Appellate Tribunal where the Tribunal had quashed the order of the Commissioner of Income Tax (CIT), canceling the registration of assessee-Trust.

Facts of the case are that the assessee i.e. Improvement Trust, was a Trust constituted under the Punjab Town Improvement Act, 1922 and was granted registration under Section 12-AA of the Act. The definition of ‘charitable purpose’ under Section 2(15) of the Act was amended by Finance Act, 2008 after which a show cause notice was issued to the assessee-Trust to show cause as to why registration should not be cancelled. CIT had held that the activities of the assessee were not for charitable purpose within the amended provision of Section 2(15) of the Act and thus its registration was cancelled. Hence, the appeal was filed before the Tribunal but the same was dismissed.

Assessee contended that though they were earning some profits the same were used for public utilities. Whereas Revenue submitted that assessee’s activities do not fall under charitable purposes but of a developer and builder.

High Court was of the view that CIT was not correct in canceling the registration under Section 12-AA of the Act as the funds were used for charitable purpose. It was found that the selling of the plots was merely an ancillary activity carried out for the improvement of the area and the same cannot be equated with carrying of the business of colonizer or developer. Further, there was no provision that the activities of charitable purposes have to be undertaken only by donations or by financial aid of the government. The Court favoured the assessee-Trust and stated the activities of Trust to be of charitable purposes. Therefore, the appeals were dismissed. [CIT v. Improvement Trust, 2018 SCC OnLine P&H 3861, dated 01-08-2018]