Barkur Vyavasaya Seva Sahakari Sangha Ltd. Vs Commissioner of… — Income Tax | Karnataka HC (2025)

Barkur Vyavasaya Seva Sahakari Sangha Ltd. Vs Commissioner of… — Income Tax | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Writ petitions disposed of with directions: (i) the first Appellate Authority - respondent No.1 to consider and pass necessary orders on the applications for stay filed with the appeals, as expeditiously as possible, preferably within 15 days; (ii) the petitioners to appear before the Principal Commissioner of Income Tax on 4th August, 2025 at 2:30 PM; and (iii) the Principal Commissioner of Income Tax to consider and dispose of the stay applications within 30 days thereafter. The prayer to quash the rectification orders was not granted.

Issue for consideration

Whether the Appellate Authority is required to consider an application for stay filed along with the appeal papers, given that non-consideration would, in many cases, defeat the very purpose of filing the appeal and render it infructuous. +1 more

Court's answer

Whenever any application for stay is filed along with the appeal papers, it is required to be considered by the Appellate Authority, since in many cases non-consideration would defeat the very purpose of filing the appeal and render the appeal infructuous.

Ratio / Principle

The first Appellate Authority (respondent No.1) is directed to consider and pass necessary orders on the applications for stay filed by the petitioners in their appeals, as expeditiously as possible, preferably within a period of 15 days.

Key takeaways

The petitioners shall appear before the Principal Commissioner of Income Tax on 4th August, 2025 at 2:30 PM, who shall consider the application for stay.ratio¶99
The Principal Commissioner of Income Tax shall dispose of the application for stay within a period of 30 days thereafter.ratio¶103

Detailed headnote1 paragraphs

Three co-operative societies from Udupi district registered under the KCS Act, 1959 filed writ petitions under Articles 226 and 227 of the Constitution seeking certiorari quashing of rectification orders dated 18.03.2025, 25.02.2025 and 07.03.2025 passed by the Income Tax Officer (Respondent No.3, Annexure-E), or alternatively mandamus to the Commissioner of Income Tax (Appeals) to dispose of their appeals (Annexure-G) and to forbear from tax demand till disposal, their applications under Section 220(6) of the Income Tax Act, 1961 having been rejected. Suraj Govindaraj J held that whenever an application for stay is filed along with the appeal papers, the Appellate Authority is required to consider it, since non-consideration would in many cases render the appeal infructuous. The writ petitions were disposed of with directions that the first Appellate Authority consider and pass orders on the stay applications preferably within 15 days, and that the petitioners appear before the Principal Commissioner of Income Tax on 04.08.2025 at 2:30 PM, who shall dispose of the stay applications within 30 days thereafter.

NC: 2025:KHC:26532 WP No. 14364 of 2025 C/W WP No. 14351 of 2025 WP No. 14362 of 2025

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HC-KAR

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 16^TH DAY OF JULY, 2025

BEFORE

THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

WRIT PETITION NO. 14364 OF 2025 (T-IT)

C/W

WRIT PETITION NO. 14351 OF 2025 (T-IT) WRIT PETITION NO. 14362 OF 2025 (T-IT)

IN WP No. 14364/2025

BETWEEN:

Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

BARKUR VYAVASAYA SEVA SAHAKARI SANGHA LTD. (REGD. UNDER KCS ACT, 1959), BARKUR, BRAHMAVARA TALUK UDUPI DISTRICT - 576 246 REP. BY ITS C.E.O. - MR. GANESH

…PETITIONER

(BY SRI. MAHESH R UPPIN, ADVOCATE)

AND:

COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, ROOM NO.356, C.R BUILDING I.P. ESTATE NEW DELHI - 110002

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ASSESSING OFFICER

NATIONAL FACELESS ASSESSMENT CENTRE DELHI - 110002

INCOME TAX OFFICER

WARD - 1 AND TPS, AAYAKAR BHAVAN

AADI-UDUPI MALPE ROAD, UDUPI - 576103

…RESPONDENTS

(BY SRI. THIRUMALESH, ADV. FOR R1 TO 3 V/O DATED 09.07.2025)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE RECTIFICATION ORDER DTD. 18.03.2025 BEARING NO. ITBA/REC/S/156-1/202425/1074649218(1) PASSED BY THE R-3 MARKED AS ANNX-E BY ISSUING A WRIT IN THE NATURE OF CERTIORARI.

IN WP NO. 14351/2025

BETWEEN:

ULLOOR MACHATTU VYAVASAYA

SEVA SAHAKARI SANGHA (A SOCIETY REGD. UNDER KCS ACT, 1959), ULOOR, KUNDAPURA UDUPI DISTRICT - 576 229 REP. BY ITS C.E.O. PRABHKAR ACHARYA

...PETITIONER

(BY SRI. MAHESH R. UPPIN, ADVOCATE)

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AND:

COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, ROOM NO.356, C.R BUILDING, I.P. ESTATE NEW DELHI - 110002

ASSESSING OFFICER NATIONAL FACELESS ASSESSMENT CENTRE DELHI - 110002

INCOME TAX OFFICER WARD - 1 & TPS AAYAKAR BHAVAN AADI-UDPI MALPE ROAD, UDUPI - 576103

...RESPONDENTS

(BY SRI. THIRUMALESH, ADV.)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE RECTIFICATION ORDER DTD. 25.02.2025 BEARING DIN AND ORDER NO. ITBA/REC/S/154-1/2024-25/1073708309(1) PASSED BY THE R-3 MARKED AS ANNX-E BY ISSUING A WRIT IN THE NATURE OF CERTIORARI.

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IN WP NO. 14362/2025

BETWEEN:

KORANGRAPADY CO-OPERATIVE AGRICULTURAL SOCIETY LTD. (A SOCIETY REGD. UNDER KCS ACT, 1959) HEAD OFFICE: KUKKIKATTE, 76 BADAGABETTU VILLAGE, KUKKIKATTE, UDUPI TALUK UDUPI DISTRICT-576101 REP. BY ITS CEO VIJAYALAKSHMI AGED 57 YEARS

...PETITIONER

(BY SRI. GOPIKRISHNA RAO M., ADVOCATE)

AND:

COMMISSIONER OF INCOME TAX (APPEALS)

NATIONAL FACELESS APPEAL CENTRE, ROOM NO.356 C R BUILDINGS I P ESTATE NEW DELHI-110002

ASSESSING OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, DELHI-110002

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INCOME TAX OFFICER

WARD 1 AND TPS AAYAKAR BHAVAN, AADI-UDUPI MALPE ROAD UDUPI-576103

...RESPONDENTS

(BY SRI. THIRUMALESH, ADV.)

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE RECTIFICATION ORDER DTD. 07.03.2025 BEARING DIN AND ORDER NO. ITBA/REC/S/154-1/2024-25/1074196428(1) PASSED BY THE R-3 MARKED AS ANNX-E BY ISSUING A WRIT IN THE NATURE OF CERTIORARI.

THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER

The petitioner in W.P.No.14364/2025 is before this court seeking for the following reliefs:

"i) Quash the Rectification Order dt:18.03.2025 bearing No.ITBA/REC/S/154_1/202425/1074648476(1) passed by the 3^rd Respondent marked as ANNEXURE "E" by issuing a writ in the nature of Certiorari;

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OR IN THE ALTERNATIVE

ii) issue a writ in the nature of mandamus by directing the 1^st Respondent to dispose off the appeal ANNEXURE - G filed by the Petitioner in an expeditious manner and till the disposal of the said appeal, not to make any demand of Income Tax from the petitioner; and

iii) grant such other relief as may be deemed fit to grant under the circumstances of the case in the interest of equity and justice."

The petitioner in W.P.No.14351/2025 is before this Court

seeking for the following reliefs:

"i) Quash the Rectification Order dt:25.02.2025 bearing DIN & Order No:ITBA/REC/S/154_1/202425/1073708309(1) passed by the 3^rd Respondent marked as ANNEXURE "E" by issuing a writ in the nature of Certiorari;

OR IN THE ALTERNATIVE

ii) issue a writ in the nature of mandamus by directing the 1^st Respondent to dispose off the appeal ANNEXURE - G filed by the Petitioner in an expeditious manner and till the disposal of the said appeal, not to make any demand of Income Tax from the petitioner; and

iii) grant such other relief as may be deemed fit to grant under the circumstances of the case in the interest of equity and justice."

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The petitioner in W.P.No.14362/2025 is before this Court

seeking for the following reliefs:

i) Quash the Rectification Order dt:07.03.2025 bearing DIN & Order No: ITBA/REC/S/154_1/2024-25/1074196428(1) passed by the 3^rd Respondent marked as ANNEXURE "E" by issuing a writ in the nature of Certiorari;

OR IN THE ALTERNATIVE

ii) issue a writ in the nature of mandamus by directing the 1^st Respondent to dispose off the appeal ANNEXURE - G filed by the Petitioner in an expeditious manner and till the disposal of the said appeal, not to make any demand of Income Tax from the petitioner; and

iii) grant such other relief as may be deemed fit to grant under the circumstances of the case in the interest of equity and justice."

The grievance of the petitioner is that the application under Section 220(6) of the Income Tax Act, 1961 to keep the proceedings in abeyance pending the appeal filed by the petitioner has been rejected.

An enquiry as to why the proceedings have to be kept in abeyance learned counsel for the petitioner submit that the order which has been passed against the petitioner was without jurisdiction and as such, no further proceedings would be taken in relation thereto and an appeal has been filed challenging the said order along

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with an application for stay, which has not been considered and as such the application under Section 220(6) of the Act was filed. Once an appeal has been filed, it would be for the Appellate Authority to consider the matter, since the entire proceedings and paper are before the Appellate Authority.

Whenever any application for stay is filed along with the appeal papers, it would be required for the Appellate Authority to consider the application for stay, since in many cases, if such application is not considered, the very purpose of filing the appeal itself would be lost rendering the appeal infructuous. In that view of the matter, I pass the following:

ORDER

i) The writ petitions are disposed off ;

ii) The first Appellate Authority - respondent No.1 is directed to consider and pass necessary orders on the application for stay filed by the petitioner in the appeal filed by the petitioner, as expeditiously as possible preferably, within a period of 15 days; and

iii) The petitioner shall appear before the Principal Commissioner of Income Tax on 4^th August, 2025 at 2:30 PM, who shall consider the application for stay

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and dispose the same, within a period of 30 days

thereafter.

SD/(SURAJ GOVINDARAJ) JUDGE

KG List No.: 1 Sl No.: 16