MALAPPATTAM SERVICE CO-OPERATIVE BANK LTD. vs. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELE

WP(C)/10973/2023HC KeralaKLHC01024624202328 March 2023Author: HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A.4 pages
AI SummaryRemanded

What were the facts?

The petitioner, Malappattam Service Co-operative Bank Ltd., is a Service Co-operative Society and a Primary Agricultural Credit Society. The 1st respondent, the Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless Assessment Centre, Delhi, passed an assessment order dated 13.12.2022 under Section 143(3) read with Section 144B of the Income Tax Act for the assessment year 2021-22. This order imposed a significant tax liability on the petitioner, holding that they were not eligible for deduction under Section 80P(2)(a)(i) of the Act. The assessment order relied on a Full Bench decision of the Kerala High Court in Mavilayi Service Co-operative Bank Ltd. v. CIT. The petitioner filed a writ petition challenging this order.

What did the High Court hold?

The High Court allowed the writ petition and set aside the assessment order dated 13.12.2022 passed by the 1st respondent. The matter was remitted back to the 1st respondent for fresh consideration. The Court directed the 1st respondent to pass appropriate orders in accordance with law, after hearing the petitioner and taking into account the principles laid down by the Hon'ble Supreme Court in the Mavilayi Service Co-operative Bank case. The reasoning was that the assessment order was based on a High Court decision that had been reversed by the Supreme Court, and this crucial development was not considered by the assessing officer. The principle is that assessment orders must be based on prevailing law, including Supreme Court pronouncements.

What were the issues?

1. Whether the assessment order dated 13.12.2022, which denied deduction under Section 80P(2)(a)(i) of the Income Tax Act, is liable to be reconsidered in light of the subsequent Supreme Court decision in Mavilayi Service Co-operative Bank Ltd. v. CIT (431 ITR 1 SC)? (Question of law) Assessee's contention: The petitioner argued that the 1st respondent failed to consider the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. CIT, which reversed the High Court's decision relied upon in the assessment order. Therefore, the assessment order requires reconsideration. Revenue's contention: The learned Standing Counsel for the respondent agreed that the assessment order needs to be reconsidered in light of the Supreme Court's decision.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A. TUE AY, THE 28TH DAY OF MARCH 2023 / 7TH CHAITHRA, 1945 WP(C) NO. 10973 OF 2023 PETITIONER: MALAPPATTAM SERVICE CO-OPERATIVE BANK LTD. MALAPPATTAM, KANNUR REPRESENTED BY ITS SECRETARY P. GOPLAKRISHNAN, PIN - 670631 BY ADVS. S.ARUN RAJ C.T.SUJA ARJUN S.RAJ RESPONDENTS: 1 ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI 2ND FLOOR, E- RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI, PIN - 110003 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, NORTH BLOCK, MANANCHIRA, KOZHIKODE, PIN - 673001 BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.03.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) No.10973/2023 : 2 : JUDGMENT Dated this the 28th day of March, 2023 The petitioner is a Service Co-operative Society registered under the Kerala Co-operative Societies Act, classified as a Primary Agricultural Credit Society and is an assessee under the Income Tax Act.

2.

The grievance of the petitioner is that, as per Ext.P4, assessmen

The order continues below.

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