THE PARAVUR SERVICE CO-OPERATIVE BANK LTD. NO.1801 vs. THE INCOME TAX OFFICER

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WP(C)/5984/2023HC KeralaKLHC01014168202322 February 2023Author: HONOURABLE MR. JUSTICE T.R.RAVI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, in this writ petition, did not decide on the merits of the case concerning the Section 80P deduction. Instead, the Court acknowledged that the petitioner has already availed the statutory remedy by filing an appeal (Ext.P3) before the Appellate Authority (the first respondent). Therefore, the Court disposed of the writ petition by directing the Appellate Authority to consider and pass orders on the appeal at the earliest. The Court also granted interim relief by directing the respondents not to take any coercive steps against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. No specific finding was made on the interpretation of Section 80P or the ingredients of a Primary Agricultural Credit Society.

What were the facts?

The petitioner, The Paravur Service Co-operative Bank Ltd. No. 1801, a Primary Agricultural Credit Co-operative Society, is challenging an assessment order (Ext.P1). This order rejected the society's claim for deduction under Section 80P of the Income Tax Act. The Assessing Officer's reasoning was that the petitioner failed to provide evidence demonstrating it met the criteria of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner relies on the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax. An appeal (Ext.P3) has been filed before the first respondent, the Income Tax Officer, National Faceless Appeal Centre (NFAC), and is currently pending.

What were the issues?

1. Whether the petitioner, a Primary Agricultural Credit Co-operative Society, has satisfied the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act, thereby qualifying for deduction under Section 80P of the Income Tax Act. Assessee's Contentions: The petitioner argues that the assessment order rejecting the Section 80P deduction is erroneous. It relies on the judgment of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax to support its claim for deduction. Revenue's Contentions: The revenue, through the Assessing Officer, rejected the deduction on the grounds that the petitioner did not provide sufficient evidence to establish it met the criteria of a Primary Agricultural Credit Society under the relevant state act.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE T.R.RAVI WEDNESDAY, THE 22ND DAY OF FEBRUARY 2023 / 3RD PHALGUNA, 1944 WP(C) NO. 5984 OF 2023 PETITIONER: THE PARAVUR SERVICE CO-OPERATIVE BANK LTD. NO.1801 REPRESENTED BY ITS SECRETARY, PARAVUR P.O, KOLLAM DISTRICT, PIN - 691301 BY ADVS. ARJUN RAGHAVAN T.R.HARIKUMAR RESPONDENTS: 1 THE INCOME TAX OFFICER NATIONAL FACELESS APPEAL CENTRE (NFAC), NORTH BLOCK, DELHI., PIN - 110001 2 THE REGISTRAR, INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, KENDRIYA BHAVAN, BLOCK NO.C1 & C2, 1ST FLOOR, KAKKANAD, COCHIN., PIN - 682030 BY ADV CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.02.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO.5984 OF 2023 2 T.R. RAVI, J. -------------------------------------------- W. P. (C). No.5984 of 2023 -------------------------------------------- Dated this the 22nd day of February, 2023

JUDGMENT The petitioner is a Primary Agricultural Credit Co-operative Society registered under the Kerala Co-operative Societies Act, 1969. The petitioner has been assessed for tax as per Ext.P1 order rejecting the claim for deduction made under Section 80P of Income Tax Act on the ground that there was no evidence to show that the petitioner has satisfied the ingredients of the Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act. Reliance is placed on the judgment of the Hon’ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 to challenge the assessment order. The petitioner has preferred Ext.P3 appeal and the same is pending before the 1st respondent. Since the petitioner has already availed the statutory remedy, this writ petition is disposed of directing the Appellate Authority to consider the appeal and pass orders on the same at WP(C) NO.5984 OF 2023 3 the earliest. The respondents shall not take any coercive steps against the petitioner pursuant to Ext.P1 assessment order till the disposal of Ext.P3 appeal. T.R. RAVI,

JUDGE ded

WP(C) NO.5984 OF 2023 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 5984/2023 PETITIONER EXHIBITS Exhibit-P1 A TRUE COPY OF THE PENALTY ORDER DATED 10-03-2022 ISSUED BY THE 1ST RESPONDENT Exhibit-P2 A TRUE COPY OF THE ORDER DATED 24-01- 2023 ISSUED BY THE NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI Exhibit-P3 A TRUE COPY OF THE APPEAL MEMORANDUM DATED 01-02-2023 ALONG WITH AFFIDAVIT AND CHELLAN Exhibit-P4 A TRUE COPY OF THE STAY PETITION FILED IN EXT-P3 APPEAL DATED 01-02-2023 Exhibit-P5 A TRUE COPY JUDGMENT DATED 16-11-2022 IN WP(C) NO.36624 OF 2022 OF THIS HON'BLE COURT

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