CHAVAKKAD FIRKA CO-OPERATIVE RURAL BANK LTD, vs. THE INCOME TAX OFFICER,

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WP(C)/26424/2024HC KeralaKLHC01125096202424 July 2024Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the merits of the assessment order or the appeal. Instead, it directed the 3rd respondent, the Commissioner of Income Tax (Appeals), to consider and pass appropriate orders on the petitioner's appeal (Ext.P3) expeditiously. The Court deemed it fit to dispose of the writ petition by mandating a time-bound consideration of the pending appeal. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the appeal is disposed of. The specific findings on the validity of the assessment or the applicability of the Supreme Court judgment were not made by the High Court in this writ proceeding.

What were the facts?

The petitioner, Chavakkad Firka Co-operative Rural Bank Ltd., a Primary Agricultural Credit Society, is challenging an assessment order dated March 19, 2024 (Ext.P1). The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner has filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals), the 3rd respondent, arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the situation and renders the assessment incorrect. The High Court of Kerala is considering a writ petition filed by the petitioner.

What were the issues?

1. Whether the assessment order dated March 19, 2024, rejecting the petitioner's claim for deduction under Section 80P is valid, considering the petitioner's status as a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act. (Question of law and fact, concerning Section 80P of the Income Tax Act, 1961). Assessee's contention: The petitioner argues that the assessment order is incorrect, relying on the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, which they contend governs the field. They believe this precedent validates their claim for deduction. Revenue's contention: The revenue, through the Assessing Officer, rejected the deduction on the grounds that the petitioner failed to provide evidence satisfying the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies 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 GOPINATH P. WEDNESDAY, THE 24TH DAY OF JULY 2024 / 2ND SRAVANA, 1946 WP(C) NO. 26424 OF 2024 PETITIONER: CHAVAKKAD FIRKA CO-OPERATIVE RURAL BANK LTD, NO.F.1250, MUTHUVATTOOR, CHAVAKKAD P.O, THRISSUR DISTRICT, REPRESENTED BY ITS SECRETARY, PIN – 680 506. BY ADV C.A.JOJO RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD 1 & TPS, GURUVAYOOR, CITY PLAZA, WEST NADA, THRISSUR, PIN – 680 101. 2 THE ASSESSING OFFICER (NFAC), NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI, PIN – 110 001. 3 THE COMMISSIONER OF INCOME TAX ( APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI, PIN – 110 001. BY ADV. SRI. JOSE JOSEPH (SC- INCOME TAX DEPT) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.26424/2024 -:2:-

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Ext.P1 order of assessment was issued against the petitioner on 19.03.2024. In the assessment order, petitioner's claim for deduction under Section 80P was rejected on the ground that there was no evidence to show that petitioner satisfied the ingredients of the Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act.

2.

While assailing the assessment order before the 3rd respondent, petitioner has sought to canvas that the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485] now governs the field thereby rendering the assessment itself as incorrect.

3.

Since the petitioner has already preferred an appeal as Ext.P3 and the same is pending consideration before the 3rd respondent, I deem it fit that this writ petition be disposed of directing the Appellate Authority to consider the appeal in a time bound manner.

4.

Accordingly, there will be a direction to the 3rd respondent to consider and pass appropriate orders on Ext.P3, as expeditiously as possible.

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P1 assessment order. The writ petition is disposed of as above. GOPINATH P.

JUDGE ats

Appendix — schedule of exhibits
APPENDIX OF WP(C) 26424/2024 PETITIONER’S EXHIBITS Exhibit P1 A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2022-23 ISSUED BY THE 2ND RESPONDENT DATED 19.03.2024. Exhibit P2 A TRUE COPY OF THE DEMAND NOTICE AY 2022-23 ISSUED BY THE 2ND RESPONDENT DATED 19.03.2024. Exhibit P3 A TRUE COPY OF THE APPEAL DATED 17.04.2024 FILED BEFORE THE 3RD RESPONDENT. Exhibit P4 A TRUE COPY OF THE STAY PETITION DATED 16.04.2024 FILED BEFORE THE 3RD RESPONDENT

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