IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, 11TH DAY OF OCTOBER 2019 / 19TH ASWINA, 1941 WP(C).No.6907 OF 2019(K) PETITIONER/S: SULTHAN BATHERY SERVICE CO-OPERATIVE BANK REP. BY ITS SECRETARY, SULTHAN BATHERY, WAYANAD DISTRICT. BY ADVS. SRI.M.P.ASHOK KUMAR SMT.BINDU SREEDHAR SHRI.ASIF N RESPONDENT/S: 1 INCOME TAX OFFICER, AAYAKAR BHAVAN, KOZHIKODE- 673001. 2 JOINT COMMISSIONER OF INCOME TAX, OFFICE OF INCOME TAX DEPARTMENT, RANGE-2, KOZHIKODE- 673001. 3 COMMISSIONER OF INCOME TAX (APPEALS), AYAKAR BHAVAN, KOZHIKODE- 673001. R1-3 BY SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11.10.2019, ALONG WITH WP(C).12007/2019(A), WP(C).6970/2019(U), WP(C).7259/2019(F), WP(C).7931/2019(N), WP(C).7959/2019(T), WP(C).7963/2019(U), COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.6907/19 & conn cases 2 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, 11TH DAY OF OCTOBER 2019 / 19TH ASWINA, 1941 WP(C).No.12007 OF 2019(A) PETITIONER/S: THIRUNELLY SERVICE CO-OPERATIVE BANK LTD KARTIKULAM, MANANTHAVADY, WAYANAD - 673 646, REPRESENTED BY ITS SECRETARY BY ADVS. SRI.P.R.VENKETESH SRI.G.KEERTHIVAS RESPONDENT/S: 1 INCOME TAX OFFICER AAYAKAR BHAVAN, KOZHIKODE - 673 001 2 JOINT COMMISSIONER OF INCPME TAX OFFICE OF INCOME TAX DEPARTMENT, RANGE - 2, KOZHIKODE-673001 3 COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, KOZHIKODE- 673001 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11.10.2019, ALONG WITH WP(C).6907/2019(K), WP(C).6970/2019(U), WP(C).7259/2019(F), WP(C).7931/2019(N), WP(C).7959/2019(T), WP(C).7963/2019(U), COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.6907/19 & conn cases 3 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, 11TH DAY OF OCTOBER 2019 / 19TH ASWINA, 1941 WP(C).No.6970 OF 2019(U) PETITIONER/S: MULLANKOLLY SERVICE CO-OPERATIVE BANK REP. BY ITS SECRETARY, MULLANKOLLY, WAYANAD DISTRICT. BY ADVS. SRI.M.P.ASHOK KUMAR SMT.BINDU SREEDHAR SMT.R.S.MANJULA SHRI.ASIF N RESPONDENT/S: 1 INCOME TAX OFFICER AAYAKAR BHAAVAN, KOZHIKODE-673001. 2 JOINT COMMISSIONER OF INCOME TAX OFFICE OF THE INCOME TAX DEPARTMENT, RANGE-2, KOZHIKODE-673001. 3 COMMISSIONER OF INCOME TAX (APPEALS), AYAKAR BHAVAN, KOZHIKODE-673001 R1-3 BY SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11.10.2019, ALONG WITH WP(C).12007/2019(A), WP(C).6907/2019(K), WP(C).7259/2019(F), WP(C).7931/2019(N), WP(C).7959/2019(T), WP(C).7963/2019(U), COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.6907/19 & conn cases 4 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, 11TH DAY OF OCTOBER 2019 / 19TH ASWINA, 1941 WP(C).No.7259 OF 2019(F) PETITIONER/S: POOTHADY SERVICE CO-OPERATIVE BANK REP. BY ITS SECRETARY, KENICHIRA, WAYANAD DISTRICT. BY ADVS. SRI.M.P.ASHOK KUMAR SMT.BINDU SREEDHAR SHRI.ASIF N RESPONDENT/S: 1 INCOME TAX OFFICER AAYAKAR BHAVAN, KOZHIKODE-673 001 2 JOINT COMMISSIONER OF INCOME TAX OFFICE OF INCOME TAX DEPARTMENT, RANGE-2, KOZHIKODE-673 001 3 COMMISSIONER OF INCOME TAX (APPEALS), AYAKAR BHAVAN, KOZHIKOE-673 001 R1 BY SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11.10.2019, ALONG WITH WP(C).12007/2019(A), WP(C).6907/2019(K), WP(C).6970/2019(U), WP(C).7931/2019(N), WP(C).7959/2019(T), WP(C).7963/2019(U), COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.6907/19 & conn cases 5 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, 11TH DAY OF OCTOBER 2019 / 19TH ASWINA, 1941 WP(C).No.7931 OF 2019(N) PETITIONER/S: KALPETTA SERVICE CO-OEPRATIVE BANK LTD., REP. BY ITS SECRETARY, KALPETTA, WAYANAD DISTRICT,- 673 121 BY ADVS. SRI.M.P.ASHOK KUMAR SMT.BINDU SREEDHAR SHRI.ASIF N RESPONDENT/S: 1 INCOME TAX OFFICER AAYAKAR BHAAVAN, KOZHIKODE-673 001 2 JOINT COMMISSIONER OF INCOME TAX OFFICE OF INCOME TAX DEPARTMENT, RANGE-2, KOZHIKODE-673 001 3 COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, KOZHIKODE-673 001 BY SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11.10.2019, ALONG WITH WP(C).12007/2019(A), WP(C).6907/2019(K), WP(C).6970/2019(U), WP(C).7259/2019(F), WP(C).7959/2019(T), WP(C).7963/2019(U), COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.6907/19 & conn cases 6 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, 11TH DAY OF OCTOBER 2019 / 19TH ASWINA, 1941 WP(C).No.7959 OF 2019(T) PETITIONER/S: KANIYAMBETTA SERVICE CO-OPERATIVE BANK LIMITED REP. BY ITS SECRETARY, KANIYAMBETTA, WAYANAD DISTRICT, 673 121 BY ADVS. SRI.M.P.ASHOK KUMAR SMT.BINDU SREEDHAR SHRI.ASIF N RESPONDENT/S: 1 INCOME TAX OFFICER AAYAKAR BHAAVAN, KOZHIKODE-673 001 2 JOINT COMMISSIONER OF INCOME TAX, OFFICE OF INCOME TAX DEPARTMENT, RANGE-2, KOZHIKODE-673 001 3 COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, KOZHIKODE-673 001 R1-3 BY SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11.10.2019, ALONG WITH WP(C).12007/2019(A), WP(C).6907/2019(K), WP(C).6970/2019(U), WP(C).7259/2019(F), WP(C).7931/2019(N), WP(C).7963/2019(U), COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.6907/19 & conn cases 7 IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, 11TH DAY OF OCTOBER 2019 / 19TH ASWINA, 1941 WP(C).No.7963 OF 2019(U) PETITIONER/S: MADIKKAMALA SERVICE CO-OPERATIVE BANK LTD., REP. BY ITS SECRETARY, MADIKKAMALA, WAYANAD DISTRICT. BY ADVS. SRI.M.P.ASHOK KUMAR SMT.BINDU SREEDHAR SHRI.ASIF N RESPONDENT/S: 1 INCOME TAX OFFICER AAYAKAR BHAAVAN, KOZHIKODE-673 001 2 JOINT COMMISSIONER OF INCOME TAX OFFICE OF INCOME TAX DEPARTMENT, RANGE-2, KOZHIKODE 673 001. 3 COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, KOZHIKODE-673 001 BY SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11.10.2019, ALONG WITH WP(C).12007/2019(A), WP(C).6907/2019(K), WP(C).6970/2019(U), WP(C).7259/2019(F), WP(C).7931/2019(N), WP(C).7959/2019(T), COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.6907/19 & conn cases 8 JUDGMENT [ WP(C).6907/2019, WP(C).12007/2019, WP(C).6970/2019, WP(C).7259/2019, WP(C).7931/2019, WP(C).7959/2019, WP(C).7963/2019 ] Dated this 11th day of October 2019 In all these writ petitions petitioners, who are Primary Agricultural Credit Societies, are aggrieved by penalty orders passed under Income Tax Act against them during assessment year 2015-16, in terms of Sections 271D and 271E of Income Tax Act. facts stated in writ petitions would reveal that petitioner societies had not complied with requirements of Sections 269 SS and had accepted deposits from their members in excess of Rs.20,000/-, in cash. penalty for said action was imposed under Sections 271D and 271E of Income Tax Act. penalty amounts imposed on petitioners range from approximately Rs.36 Crores to Rs.218 Crores. 2. It would appear that, against penalty orders, petitioners preferred appeals before First Appellate Authority, and simultaneously moved Joint Commissioner of Income tax, through petitions under Section 226 of Income Tax Act for considering them as assessees not in default pending disposal of appeals by appellate authority. Joint Commissioner, after considering case of petitioners, directed them to pay 10% of penalty amounts confirmed against them by assessing authority in two equal monthly instalments, as condition for stay of recovery of balance amounts confirmed against them. It is citing their poor financial condition, and inability to pay even reduced amount directed by 2 nd respondent - Joint WP(C).No.6907/19 & conn cases 9 Commissioner of Income Tax, that they have approached this Court through present writ petitions, impugning orders of Joint Commissioner of Income Tax. 3. I have heard Sri.,Ashok Kumar and Sri.P.R.Venkatesh, learned counsel for petitioners and also learned Standing Counsel for respondents. 4. On consideration of facts and circumstances of case and submissions made across Bar, while under normal circumstances, orders of Joint Commissioner of Income Tax impugned in these writ petitions cannot be seen as unreasonable or arbitrary and hence liable for interference by this Court in these proceedings under Article 226 of Constitution of India, I take note of submissions of learned counsel for petitioners, that appeals preferred by them against penalty orders have since been heard by appellate authority, and orders are not passed in appeals only because of pendency of these writ petitions. I also note that when these writ petitions were admitted by this Court, this Court had by interim order passed in March 2019, stayed recovery of penalty amounts from petitioners during pendency of writ petitions. writ petitions have been pending before this Court for over six months and stay has also been operating in favour of petitioners, in meanwhile. Under said circumstances, and taking note of fact that statutory appeals can now be disposed by First Appellate Authority, I dispose these writ petitions by directing Commissioner of Income Tax (Appeals) before whom appeals preferred by petitioners, against orders of penalty passed against them under Income Tax Act, are pending, to consider and pass orders on same, expeditiously after hearing petitioners, at any rate, within three months from date of receipt of copy of this judgment. It is made clear that pending disposal of appeals by WP(C).No.6907/19 & conn cases 10 Commissioner of Income Tax (Appeals), and communication of appellate orders to petitioners, stay granted by this Court against recovery of penalty amounts from petitioners shall continue to operate. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE sd WP(C).No.6907/19 & conn cases 11 APPENDIX OF WP(C) 6907/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 PENALTY ORDER DATED 26.07.2018. EXHIBIT P2 PENALTY ORDER DATED 26.07.2018. EXHIBIT P3 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P4 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P5 PHOTOCOPY OF STAY PETITION DATED 23.01.2019. EXHIBIT P6 PHOTOCOPY OF STAY PETITION DATED 23.01.2019. EXHIBIT P7 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019. EXHIBIT P8 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019. EXHIBIT P9 PHOTOCOPY OF RELEVANT PAGE OF BALANCE SHEET DATED 31.03.2015. WP(C).No.6907/19 & conn cases 12 APPENDIX OF WP(C) 12007/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF NOTICE DATED 25.6.2018 ISSUED BY 2ND RESPONDENT TO PETITIONER EXHIBIT P2 TRUE COPY OF NOTICE DATED 25.1.2018 ISSUED BY 2ND RESPONDENT TO PETITIONER EXHIBIT P3 TRUE COPY CO REPLY SUBMITTED BY PETITIONER TO 2ND RESPONDENT DATED 14.2.2018 EXHIBIT P4 TRUE COPY OF BALANCE SHEET AS ON 31.3.2015 DATED 15.2.2016 OF PETITIONER SOCIETY EXHIBIT P5 TRUE COPY OF TRADE, PROFIT AND LOSS ACCOUNT FOR YEAR ENDED 31.3.2015 OF PETITIONER BANK DATED 15.2.2016 EXHIBIT P6 TRUE COPY OF PROFIT & LOSS ACCOUNT FOR YEAR ENDED 31.3.2015 OF PETITIONER SOCIETY DATED 15.2.2016 EXHIBIT P7 TRUE COPY OF PROFIT & LOSS APPROPRIATION ACCOUNT FOR YEAR ENDED 31.3.2015 OF PETITIONER SOCIETY EXHIBIT P8 TRUE COPY OF DEMAND NOTICE DATED 26.7.2018 ISSUED BY 2ND RESPONDENT TO PETITIONER SOCIETY EXHIBIT P9 TRUE COPY OF ASSESSMENT YEAR UNDER SECTION 271D R/W SECTION 269 SS ISSUED BY 2ND RESPONDENT DATED 26.7.2018 FOR ASSESSMENT YEAR 2015-16 EXHIBIT P10 TRUE COPY OF APPEAL FILED BEFORE 3RD RESPONDENT BY PETITIONER AGAINST DEMAND NOTICE UNDER SEC.271D DATED 28.8.2018 EXHIBIT P11 TRUE COPY OF STAY APPLICATION FILED BY PETITIONER BEFORE 2ND RESPONDENT DATED 23.1.2019 WP(C).No.6907/19 & conn cases 13 EXHIBIT P12 TRUE COPY OF STAY ORDER DATED 31.1.2019 ISSUED BY 2ND RESPONDENT TO PETITIONER EXHIBIT P13 TRUE COPY OF DEMAND NOTICE DATED 26.7.2018 ISSUED BY 2ND RESPONDENT TO PETITIONER EXHIBIT P14 TRUE COPY OF ASSESSMENT ORDER FOR YEAR 2015-16 DATED 26.7.2018 ISSUED BY 2ND RESPONDENT TO PETITIONER EXHIBIT P15 TRUE COPY OF WRITTEN SUBMISSIONS FILED BY PETITIONER SOCIETY AGAINST NOTICE UNDER SECTION 274 R/W SECTION 271E OF INCOME TAX ACT DATED 14.2.2018 EXHIBIT P16 TRUE COPY OF STAY APPLICATION FILED BY PETITIONER DATED 23.1.2019 AGAINST RECOVERY OF DEMAND LEVIED UNDER SECTION 271E EXHIBIT P17 TRUE COPY OF ORDER DATED 31.1.2019 ISSUED BY 2ND RESPONDENT UNDER SECTION 271E IN RESPONSE TO STAY APPLICATION EXHIBIT P18 TRUE COPY OF INTERIM ORDER DATED 11/03/2019 IN WP(C) 6907 OF 2019 EXHIBIT P19 TRUE COPY OF APPEAL FILED BEFORE 3RD RESPONDENT AGAINST DEMAND NOTICE UNDER SEC.271E BY PETITIONER DATED 28.8.2018 WP(C).No.6907/19 & conn cases 14 APPENDIX OF WP(C) 6970/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 PENALTY ORDER DATED 26/07/2018. EXHIBIT P2 PENALTY ORDER DATED 26/07/2018. EXHIBIT P3 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P4 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P5 PHOTOCOPY OF STAY PETITION DATED 23/01/2019. EXHIBIT P6 PHOTOCOPY OF STAY PETITION DATED 23/01/2019. EXHIBIT P7 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31/01/2019 EXHIBIT P8 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31/01/2019. EXHIBIT P9 PHOTOCOPY OF RELEVANT PAGE OF BALANCE SHEET DATED 31/03/2015. WP(C).No.6907/19 & conn cases 15 APPENDIX OF WP(C) 7259/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 PENALTY ORDER DATED 26.07.2018 EXHIBIT P2 PENALTY ORDER DATED 26/07/2018 EXHIBIT P3 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P4 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P5 PHOTOCOPY OF STAY PETITION DATED 23.01.2019 EXHIBIT P6 PHOTOCOPY OF STAY PETITION DATED 23.01.2019 EXHIBIT P7 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019 EXHIBIT P8 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019 EXHIBIT P9 PHOTOCOPY OF RELEVANT PAGE OF BALANCE SHEET DATED 31.03.2015 WP(C).No.6907/19 & conn cases 16 APPENDIX OF WP(C) 7931/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 PENALTY ORDER DATED 26.07.2018. EXHIBIT P2 PENALTY ORDER DATED 26.07.2018 EXHIBIT P3 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P4 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P5 PHOTOCOPY OF STAY PETITION DATED 25.01.2019. EXHIBIT P6 PHOTOCOPY OF STAY PETITION DATED 25.01.2019 EXHIBIT P7 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019 EXHIBIT P8 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019 WP(C).No.6907/19 & conn cases 17 APPENDIX OF WP(C) 7959/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 PENALTY ORDER DATED 26.07.2018 EXHIBIT P2 PENALTY ORDER DATED 26.07.2018. EXHIBIT P3 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P4 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P5 PHOTOCOPY OF STAY PETITION DATED 25.01.2019. EXHIBIT P6 PHOTOCOPY OF STAY PETITION DATED 25.01.2019 EXHIBIT P7 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019 EXHIBIT P8 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019 WP(C).No.6907/19 & conn cases 18 APPENDIX OF WP(C) 7963/2019 PETITIONER'S/S EXHIBITS: EXHIBIT P1 PENALTY ORDER DATED 26.07.2018 EXHIBIT P2 PENALTY ORDER DATED 26.07.2018 EXHIBIT P3 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P4 PHOTOCOPY OF APPEAL PENDING BEFORE 3RD RESPONDENT. EXHIBIT P5 PHOTOCOPY OF STAY PETITION DATED 25.01.2019 EXHIBIT P6 PHOTOCOPY OF STAY PETITION DATED 25.01.2019 EXHIBIT P7 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019 EXHIBIT P8 PHOTOCOPY OF INTERIM ORDER PASSED IN STAY PETITION 31.01.2019 Sulthan Bathery Service Co-Operative Bank v. Income-tax Officer, Kozhikode / Joint Commissioner of Income-tax, Range-2, Kozhikode / Commissioner of Income-tax (Appeals), Kozhikode