CHENGAROOR SERVICE CO-OPERATIVE BANK LIMITTED NO: A-149 vs. THE INCOME TAX OFFICER

WP(C)/30298/2023HC KeralaKLHC01066791202315 September 2023Author: HONOURABLE MR. JUSTICE D. K. SINGH5 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court disposed of the writ petition with a direction to the National Faceless Appeal Centre (2nd respondent) and the Commissioner of Income Tax (Appeals) (4th respondent) to hear and dispose of the appeals (Ext.P2 and Ext.P3) expeditiously within a period of two months. This disposal is contingent upon the cooperation of the assessee (petitioner). Furthermore, for a period of two months from the date of the order, no coercive measures are to be taken against the petitioner for the realization of the tax assessed in the writ petition. The Court considered the submissions and the precedent cited by the petitioner, and the lack of dispute from the Revenue.

What were the facts?

The petitioner, Chengaraoor Service Co-operative Bank Limited, filed a writ petition seeking a direction to the Commissioner of Income Tax (Appeals) to hear its appeals (Ext.P2 and Ext.P3) expeditiously and to direct the Income Tax Officer to defer recovery proceedings until the appeals are disposed of. The petitioner's claim for exemption under Section 80(P) of the Income Tax Act was rejected by the assessing authority, who found that the society did not operate according to the Kerala Co-operative Societies Act. The petitioner cited a previous High Court order in a similar case where appeals were directed to be heard and recovery stayed. The Revenue did not dispute the facts or the precedent.

What were the issues?

1. Whether the Commissioner of Income Tax (Appeals) should be directed to consider the petitioner's appeals (Ext.P2 and Ext.P3) in a time-bound manner, and whether recovery proceedings should be deferred until their disposal, as per Article 226 of the Constitution of India? Assessee's Contention: The petitioner argued that in identical matters, the High Court had directed the hearing of appeals and stayed recovery of assessed tax without requiring payment of 20%. They relied on the High Court's order dated 14.07.2022 in WP(C) No. 22847 of 2022. Revenue's Contention: The Revenue, through its counsel, did not dispute the fact that similar matters had been disposed of with directions for expeditious appeal disposal within two months and a stay on tax realization steps.

Which sections of the Income-tax Act were involved?

Section 80(P)

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 DINESH KUMAR SINGH FRIDAY, THE 15TH DAY OF SEPTEMBER 2023 / 24TH BHADRA, 1945 WP(C) NO. 30298 OF 2023 PETITIONER: CHENGAROOR SERVICE CO-OPERATIVE BANK LIMITTED NO: A-149 AGED 51 YEARS CHENGAROOR P.O, MALLAPPALLY REPRESENTED BY ITS SECRETARY, CO-OPERATIVE BANK BUILDING, CHENGAROOR P.O, MALLAPPALLY, PATHANAMTHITTA DISTRICT, PIN – 689 594. BY ADVS. JOSEPH GEORGE P.A.REJIMON NIKITA NAIR C.S. RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 4, THIRUVALLA, THIRUVALLA P.O, PATHANAMTHITTA DISTRICT, PIN – 689 101. 2 THE NATIONAL FACELESS APPEAL CENTRE INCOME TAX DEPARTMENT, NEW DELHI REPRESENTED BY PRINCIPAL CHIEF COMMISSIONER, INCOME TAX COMMISSIONARATE, C.R. BUILDING, IP ESTATE, NEW DELHI, PIN – 110 002. 3 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT, COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER NATIONAL E-ASSESMENT CENTRE, NEW DELHI, PIN – 100 001. 4 THE COMMISSIONER OF INCOME TAX (APPEALS) OFFICE OF THE COMMISSIONER OF INCOME TAX, BAKER JUNCTION, KOTTAYAM, PIN – 686 001. OTHER PRESENT: NAVANEETH V. NATH, SC, REVENUE THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 30298 OF 2023 2 DINESH KUMAR SINGH, J. -------------------------------------------- WP(C) NO. 30298 OF 2023 -------------------------------------------- Dated this the 15th day of September, 2023

J U D G M E N T

The present writ petition has been filed under Article 226 of the Constitution of India for a direction to the 4th respondent - the Commissioner of Income Tax (Appeals) to consider Ext.P2 and Ext.P3 Appeals in a time bound manner and to give direction to the 1st respondent to defer recovery proceedings against the petitioner till the disposal of Ext.P2 and Ext.P3 Appeals.

The Petitioner is a primary Co-operative Society registered under the Kerala Co-operative Societies Act. The petitioner’s claim for exemption to pay Income Tax under Section 80 (P) of the Income Tax Act has been rejected by the assessing authority on the ground that the petitioner society

WP(C) NO. 30298 OF 2023 3 had failed to prove that it was worked as per the rules of the Kerala Co-operative Societies Act.

The Learned Counsel for the petitioner submits that in identical matters this Court has directed for hearing of the appeals and stayed the recovery of the assessed tax without making payment of 20%.

The learned counsel for the petitioner has placed reliance on the order dated 14.07.2022 passed by this Court in the WP (C) No. 22847 of 2022. 5. Sri. Navaneeth.V.Nath, the Learned Counsel for Revenue does not dispute the fact that similar matter was disposed of and directed for an expeditious disposal of the appeal within a period of two months and the steps to realization of the assessed tax have been stayed.

Considering this aspect of the matter, the WP(C) NO. 30298 OF 2023 4 present writ petition is also disposed of with a direction to the 2nd and 4th respondents to take the appeals Ext.P2 and Ext.P3 for hearing and dispose them expeditiously within a period of two months. The disposal of the appeals are subject to the cooperation by the assessee or the petitioner. For a period of two months, no coercive measures shall be taken against the petitioner for realization of the tax assessed in this Writ Petition. DINESH KUMAR SINGH JUDGE rpr

WP(C) NO. 30298 OF 2023 5

Appendix — schedule of exhibits

APPENDIX OF WP(C) 30298/2023 PETITIONER’S EXHIBITS Exhibit P-1 TRUE PHOTOCOPY OF THE ASSESSMENT ORDER DATED 11-12-2018 ISSUED BY THE 1ST RESPONDENT. Exhibit P-2 TRUE PHOTOCOPY OF THE APPEAL DATED 21-01-2019 SUBMITTED BEFORE THE 4TH RESPONDENT BY THE PETITIONER. Exhibit P-3 TRUE PHOTOCOPY OF THE APPEAL DATED 09-03-2023 SUBMITTED BEFORE THE 2ND RESPONDENT BY THE PETITIONER. Exhibit P-4 TRUE PHOTOCOPY OF THE JUDGMENT DATED 14-07- 2022 IN WP(C) NO: 22847/2022 OF THIS HON'BLE COURT.

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