CHERTHALA SOUTH SERVICE CO-OPERATIVE BANK LIMITED NO.1344 vs. THE INCOME TAX OFFICER

ITA/32/2016HC KeralaKLHC01026831201618 March 2016Author: HONOURABLE MRS. JUSTICE ANU SIVARAMAN,HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN4 pages
AI SummaryRemanded

What were the facts?

The appeal is filed by Cherthala South Service Co-operative Bank Limited No. 1344 (the assessee) against the order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The assessee is challenging the ITAT's decision concerning exemption under Section 80P of the Income Tax Act, 1961, and the treatment of provisions for bad and doubtful debts. The appeal is linked to other related matters, specifically ITA No. 212 of 2013 and connections. The High Court has considered the arguments from both the assessee and the Revenue.

What did the High Court hold?

The High Court has decided substantial questions of law (A), (B), and (C) in line with its judgment in ITA No. 212 of 2013 and connections. The matters are remitted to the Income Tax Appellate Tribunal for reconsideration in light of these answers. The Tribunal is directed to consider the issues relating to bad and doubtful debts and the assessee's claim in that regard, treating that the question of exemption under Section 80P remains available for decision in all pending cases where such exemptions were claimed. The Tribunal is also to consider the effect of decisions of various High Courts concerning CBDT clarification No. 133/2007, as urged by the assessee. The specific findings on the substantial questions of law (A), (B), and (C) are incorporated from the earlier judgment, but the reasoning and ratio decidendi are not detailed in this excerpt. The operative direction is a remand for reconsideration.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in deciding against the assessee the issue regarding entitlement for exemption under Section 80P, ignoring that the assessee is a primary agricultural credit society? (Assessee's contention: The assessee is a primary agricultural credit society and thus entitled to exemption. Revenue's contention: Not recorded. 2. Whether the Tribunal is justified in denying the exemption under Section 80P on the mere ground of belated filing of return by the assessee? (Assessee's contention: Belated filing should not lead to denial of exemption. Revenue's contention: Not recorded. 3. Whether a return filed by the assessee beyond the period stipulated under Section 139(1)/(4) or Section 142(1)/148 can be held as non est in law and invalid for the purpose of deciding exemption under Section 80P? (Assessee's contention: Such returns are not invalid for exemption purposes. Revenue's contention: Not recorded. 4. Whether the Tribunal is correct in law or is justified in restricting the provisions for bad and doubtful debt at 7.5% of the gross total income, on the reason that the assessee is not entitled for the status of rural branch to claim 10% of the aggregate average advances as bad and doubtful debt, under Section 36(1)(viia)? (Assessee's contention: The Tribunal's restriction is incorrect. Revenue's contention: Not recorded.) The assessee also argued that the Tribunal failed to consider the effect of various High Courts approving CBDT clarification No. 133/2007.

Which sections of the Income-tax Act were involved?

Section 80P,Section 139,Section 142,Section 148,Section 36(1)(viia)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN FRIDAY, THE 18TH DAY OF MARCH 2016/28TH PHALGUNA, 1937 ITA.No. 32 of 2016 () ---------------------- AGAINST THE ORDER/JUDGMENT IN ITA 55/2015 of I.T.A.TRIBUNAL,COCHIN BENCH DATED APPELLANT(S)/APPELLANT/ACCUSSE: ------------------------------ CHERTHALA SOUTH SERVICE CO-OPERATIVE BANK LIMITED NO.1344 REPRESENTED BY ITS SECRETARY SRI. JOSHY B, CHERTHALA SOUTH ZONE, CHERTHALA, ALAPPUZHA DISTRICT, PIN 688524

BY ADVS. SRI.C.A.JOJO SRI.JACOB CHACKO SRI.MATHEWS JOSEPH RESPONDENT(S)/RESPONDENT/REVENUE: --------------------------------- THE INCOME TAX OFFICER WARD NO.1, DEVASWAM BUILDING, ALAPPUZHA, PIN 688011

R BY SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 18-03-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

THOTTATHIL B.RADHAKRISHNAN & ANU SIVARAMAN, JJ. ----------------------------------------------- ITA.No.32 of 2016 ----------------------------------------------- Dated this the 18th M

The order continues below.

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