The Kerala High Court has stayed income tax recovery proceedings against The Palode Service Co-operative Bank Ltd., ruling that recovery cannot continue while an appeal involving substantial legal questions is pending, media reports say.
The bank had challenged a tax assessment for 2023–24 and filed an appeal along with a stay petition, relying on the Supreme Court’s 2021 ruling in Mavilayi Service Co-operative Bank Ltd. v. CIT, which favored cooperative banks.
Justice Ziyad Rahman A.A. held that enforcing recovery before adjudicating the appeal could cause irreparable harm. The Court directed the Commissioner of Income Tax (Appeals) to expedite the case and ordered all recovery actions to be paused until the appeal is decided.