THE EZHUMATTOOR SERVICE CO-OPERATIVE BANK LTD NO-1546 vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/25231/2023HC KeralaKLHC01055343202302 August 2023Author: HONOURABLE MR.JUSTICE C.S.DIAS5 pages
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What did the High Court hold?

The High Court directed the 3rd respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the petitioner's appeal (Ext.P3) in accordance with law and as expeditiously as possible, at any rate within three months from the date of receipt of a certified copy of the judgment. The Court specifically instructed the 3rd respondent to keep in mind the principles laid down in Ext.P5 judgment. Furthermore, all further proceedings pursuant to the assessment order (Ext.P2) and demand notice (Ext.P4) were ordered to be deferred until orders are passed on Ext.P3 appeal. The Court did not decide the merits of the Section 80P deduction claim itself, but rather focused on the procedural aspect of expediting the appeal and applying relevant precedent.

What were the facts?

The petitioner, The Ezhumattoor Service Co-operative Bank Ltd, a Primary Agricultural Credit Society, filed its return for assessment year 2020-21 claiming deduction under Section 80P of the Income Tax Act, 1961. The assessment unit rejected this claim via an assessment order (Ext.P2). The petitioner filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) on July 27, 2022. Despite the pending appeal, the Additional Commissioner issued a demand notice (Ext.P4). The petitioner filed a writ petition seeking a direction to the appellate authority to consider its appeal in light of a previous High Court judgment (Ext.P5) in an identical matter and to defer coercive proceedings until then.

What were the issues?

1. Whether the 3rd respondent (Commissioner of Income Tax (Appeals)) should be directed to consider and dispose of the petitioner's appeal (Ext.P3) in light of the principles laid down in Ext.P5 judgment passed by this Court in an identical matter? (Question of law and fact, concerning the procedural fairness and application of precedent). Assessee's Contentions: The petitioner argued that its appeal (Ext.P3) is pending since July 27, 2022, and that the 3rd respondent should be directed to consider and dispose of the appeal in light of the principles laid down in Ext.P5 judgment. The petitioner also sought deferment of coercive proceedings pursuant to the assessment order (Ext.P2) and demand notice (Ext.P4) until the appeal is decided. Revenue's Contentions: The judgment records that the learned Counsel for the respondents appeared and was heard, but does not detail their specific arguments.

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 C.S.DIAS WEDNESDAY, THE 2ND DAY OF AUGUST 2023 / 11TH SRAVANA, 1945 WP(C) NO. 25231 OF 2023 PETITIONER/S: THE EZHUMATTOOR SERVICE CO-OPERATIVE BANK LTD NO-1546 AGED 50 YEARS EZHUMATTOOR, MALLAPPALLY, PATHANAMTHITTA REPRESENTED BY ITS SECRETARY ALEXANDER C, PIN - 689586 BY ADVS. K.P.PRADEEP HAREESH M.R. SANAND RAMAKRISHNAN T.T.BIJU T.THASMI M.J.ANOOPA RESPONDENT/S: 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 - 110001 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 - 110003 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN - 110003 BY ADV CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 25231 OF 2023 2

JUDGMENT The writ petition is filed to direct the 3rd respondent to consider and dispose of Ext.P3 appeal in the light of Ext.P5 judgment passed by this Court and until such time to defer further coercive proceedings pursuant to Ext.P2 assessment order and Ext.P4 notice.

2.

The petitioner's case is that it is a Co-operative Society classified as Primary Agricultural Credit Society, entitled for the deduction of income tax under Section 80P of the Income Tax Act, 1961 (in short, “Act”). For the assessment year 2020-21, the petitioner had filed annual return claiming deduction of tax under Section 80P of the Act for the reason that it is covered by the provisions of the Act. Nonetheless, the respondents completed the assessment by Ext.P2 order and rejected the claim put forth by the petitioner. Aggrieved by the said order, the petitioner has preferred Ext.P3 appeal before the 3rd respondent. Notwithstanding the pendency of Ext.P3 appeal, the 2nd respondent has issued Ext.P4 demand

WP(C) NO. 25231 OF 2023 3 notice. The petitioner relies on Ext.P5 judgment passed by this Court in an identical matter. The petitioner claims the benefit of the said judgment. The petitioner prays that the 3rd respondent may be directed to consider and dispose of Ext.P3 appeal in the light of the ratio laid down in Ext.P5 judgment. Hence, the writ petition.

3.

Heard; Sri.K.P.Pradeep, the learned Counsel appearing for the petitioner and Sri.Christopher Abraham, the learned Counsel appearing for the respondents.

4.

Having considered the pleadings and materials on record and taking note of the fact that Ext.P3 appeal is pending consideration before the 3rd respondent since 27.07.2022 and also taking into account the principles laid down in Ext.P5 judgment, I am of the view that the 3rd respondent is to be directed to consider and dispose of Ext.P3 appeal in the light of the principles laid down in Ext.P5 judgment. Resultantly, I order the writ petition as follows:

WP(C) NO. 25231 OF 2023 4 (i) The 3rd respondent is directed to consider and dispose of Ext.P3 appeal, in accordance with law and as expeditiously as possible, at any rate within a period of three months from the date of receipt of a certified copy of this judgment. (ii) The 3rd respondent shall keep in mind the principles laid down by this Court in Ext.P5 judgment. (iii) Until such time orders are passed on Ext.P3 appeal, all further proceedings pursuant to Exts.P2 and P4 shall stand deferred. C.S.DIAS JUDGE rkc/02.08.023

WP(C) NO. 25231 OF 2023 5

Appendix — schedule of exhibits
APPENDIX OF WP(C) 25231/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE INCOME TAX RETURN ACKNOWLEDGEMENT DATED 30-12-2020 FILED UNDER SECTION 139 OF THE INCOME TAX ACT, FOR THE ASSESSMENT YEAR 2020-21 Exhibit P2 TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/143(3)/2022-23/1046027800(1) DATED 27-09-2022 ISSUED FOR THE YEAR 2020- 21 BY THE 2NDRESPONDENT TO THE PETITIONER Exhibit P3 TRUE COPY OF THE APPEAL DATED 27-10-2022 FILED FOR THE YEAR 2020- 21 BEFORE THE 3RDRESPONDENT BY THE PETITIONER Exhibit P4 TRUE COPY OF THE DEMAND NOTICE NO. ITBA/AST/S/156/2022-23/1046028032(1) DATED 27-09-2022 ISSUED FOR THE YEAR 2020-21 BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P5 TRUE COPY OF THE JUDGMENT DATED 23-02-2022 IN WPC NO 6109 OF 2022

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