CHITHARA SERVICE CO-OPERATIVE BANK LTD vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/20942/2024HC KeralaKLHC01113386202412 June 2024Author: HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala directed the 3rd respondent, Commissioner of Income Tax (Appeals), to consider and dispose of the petitioner's pending appeal (Ext.P2) expeditiously. The Court further ordered that no coercive steps shall be taken against the petitioner pursuant to the assessment order (Ext.P1) until the appeal is disposed of. The judgment does not delve into the merits of the Section 80P deduction claim itself, nor does it make a finding on whether the disallowance was correct. The primary focus was on the procedural aspect of the pending appeal and the issuance of the demand notice. The issue of the correctness of the disallowance was implicitly left to be decided by the appellate authority.

What were the facts?

The petitioner, Chithara Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society and an assessee under the Income Tax Act, 1961. The 2nd respondent, Additional Commissioner of Income Tax, passed an assessment order for the assessment year 2022-2023, disallowing the petitioner's claim for deduction under Section 80P of the Act. The petitioner contends this disallowance was made without considering the Supreme Court's decision in Mavilayi Service Co-operative Bank. Consequently, the petitioner filed an appeal before the 3rd respondent, Commissioner of Income Tax (Appeals). During the pendency of this appeal, the petitioner received a demand notice (Ext.P3) pursuant to the assessment order.

What were the issues?

1. Whether the disallowance of the deduction under Section 80P of the Income Tax Act, 1961, by the 2nd respondent was erroneous, considering the Supreme Court's decision in Mavilayi Service Co-operative Bank's case? Assessee's Contention: The assessee argued that the assessment order disallowing the Section 80P deduction was passed without considering the binding precedent of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank's case. The assessee relied on this Supreme Court decision. Revenue's Contention: The judgment does not record any specific contentions made by the revenue regarding this issue. The revenue's role in the writ petition was primarily in relation to the pending appeal and demand notice.

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 MURALI PURUSHOTHAMAN WEDNESDAY, THE 12TH DAY OF JUNE 2024 / 22ND JYAISHTA, 1946 WP(C) NO. 20942 OF 2024 PETITIONER: CHITHARA SERVICE CO-OPERATIVE BANK LTD SERVICE CO-OPERATIVE BANK BUILDING, MAIN ROAD, CHITHARA P.O, KOLLAM REPRESENTED BY ITS SECRETARY SUBHA C.C, PIN – 691 559. BY ADVS. K.P.PRADEEP T.T.BIJU T.THASMI M.J.ANOOPA RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI- REPRESENTED BY ITS CHAIRMAN, PIN – 110 001. 2 ADDITIONAL COMMISSIONER OF INCOME TAX ASSESSMENT UNIT, INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN – 110 003. 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN – 110 003. BY ADV. CHRISTOPHER ABRAHAM (STANDING COUNSEL) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.06.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO.20942 OF 2024 : 2 :

JUDGMENT

The petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969 and an assessee under the Income Tax Act, 1961. The petitioner states that the 2nd respondent passed Ext.P1 assessment order for the year 2022-2023 disallowing the claim of the petitioner for deduction under Section 80 (P) of the Income Tax Act, 1961 without taking into consideration the decision of the Hon’ble Supreme Court in Mavilayi Service Co-operative Bank’s 2021 (1) KHC 303. Accordingly, the petitioner has preferred Ext.P2 appeal before the 3rd respondent.

2.

The petitioner submits that during the pendency of the appeal before the 3rd respondent, Ext.P3 demand notice has been issued to the petitioner.

WP(C) NO.20942 OF 2024 : 3 : Since Ext.P2 statutory appeal is pending before the 3rd respondent, there will be a direction to the 3rd respondent to consider and dispose of Ext.P2 appeal, expeditiously as possible. Till the appeal is disposed of, there shall not any coercive steps against the petitioner pursuant to Ext.P1 assessment order. The writ petition is disposed of. MURALI PURUSHOTHAMAN JUDGE SRJ

WP(C) NO.20942 OF 2024 : 4 :

Appendix — schedule of exhibits
APPENDIX OF WP(C) 20942/2024 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/143(3)/2023-24/1062776028(1) DATED 17-03- 2024 ISSUED FOR THE YEAR 2022-23 BY THE 2NDRESPONDENT TO THE PETITIONER. EXHIBIT P2 TRUE COPY OF THE APPEAL DATED 03-06-2024 FILED FOR THE YEAR 2022-23 BEFORE THE 3RDRESPONDENT BY THE PETITIONER. EXHIBIT P3 TRUE COPY OF THE DEMAND NOTICE NO. ITBA/AST/S/156/2023- 24/1062776049(1) DATED 17-03- 2024 ISSUED FOR THE YEAR 2022-23 BY THE 2ND RESPONDENT TO THE PETITIONER. EXHIBIT P4 TRUE COPY OF THE JUDGMENT DATED 23-02-2022 IN WPC NO 6109 OF 2022.

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