KARTHEDOM RURAL CO-OPERATIVE SOCIETY LTD.NO.385 vs. THE INCOME TAX OFFICER

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WP(C)/42523/2022HC KeralaKLHC01092174202223 December 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide on the merits of the case. Instead, it noted that the petitioner had already preferred an appeal (Ext.P4) before the 2nd respondent (Commissioner of Income Tax (Appeals)) which was pending. Therefore, the Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the appeal in a time-bound manner. The Court directed the 2nd respondent to consider and pass appropriate orders on Ext.P4 expeditiously. Additionally, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P2) and demand notice (Ext.P3) until the disposal of the appeal. No issue was expressly left undecided, as the Court's action was procedural.

What were the facts?

The petitioner, Karthedom Rural Co-operative Society Ltd. No. 385, a Primary Agricultural Credit Society, is challenging an assessment order dated March 30, 2022, for assessment year 2015-16. The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as per the Kerala Co-operative Societies Act. The petitioner had appealed this order to the Commissioner of Income Tax (Appeals). The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax now governs the field and renders the assessment incorrect.

What were the issues?

1. Whether the assessment order dated March 30, 2022, rejecting the deduction under Section 80P for assessment year 2015-16 is valid, considering the petitioner's status as a Primary Agricultural Credit Society. Assessee's Contentions: The petitioner contended that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485] governs the present case, implying that the assessment order is incorrect based on this precedent. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in response to the petitioner's arguments before the High Court. The assessment order itself rejected the deduction on the ground of insufficient evidence regarding the petitioner's status.

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 GOPINATH P. FRIDAY, THE 23RD DAY OF DECEMBER 2022 / 2ND POUSHA, 1944 WP(C) NO. 42523 OF 2022 PETITIONER/S: KARTHEDOM RURAL CO-OPERATIVE SOCIETY LTD.NO.385 KARTHEDOM, MALIPURAM, KOCHI ERNAKULAM, PIN - 682511 BY ADVS. M.SASINDRAN SREEHARI INDUKALADHARAN RESPONDENT/S: 1 THE INCOME TAX OFFICER THE INCOME TAX OFFICER, NON CORP WARD 2(4) AND TPS KOCHI, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KACHERIPADY, KOCHI, KERALA., PIN - 682018 2 THE COMMISSIONER OF INCOME TAX (APPEALS) THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEALS CENTRE (NFAC) NEW DELHI., PIN - 110001 BY ADV JOSE JOSEPH SC - Sri.Christopher Abraham THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 42523 OF 2022 2

JUDGMENT

Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Ex.P2 order of assessment was issued against the petitioner on 30.03.2022, for the assessment year 2015-16. In the assessment order, petitioner's claim for deduction under Section 80P was rejected on the ground that there was no evidence to show that petitioner satisfied the ingredients of the Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act.

2.

While assailing the assessment order before the 2nd respondent, petitioner has sought to canvass that the judgment of the Supreme Court in Mavilayi Service Co- operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485] now governs the field thereby rendering the assessment itself as incorrect.

3.

Since the petitioner has already preferred an appeal as Ext.P4 and the same is pending consideration before the 2nd respondent, I deem it fit that this writ petition be disposed of, directing the Appellate Authority to consider the appeal in a time bound manner.

WP(C) NO. 42523 OF 2022 3

4.

Accordingly, there will be a direction to the 2nd respondent to consider and pass appropriate orders on Ext.P4 as expeditiously as possible.

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P2 assessment order and Ext.P3 demand notice. The writ petition is disposed of as above. GOPINATH P. JUDGE ajt

WP(C) NO. 42523 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 42523/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE CERTIFICATE OF REGISTRATION DATED 21.12.2015 ISSUED BY THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, ERNAKULAM Exhibit P2 A TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2015-2016 DATED 30.03.2022 Exhibit P3 A TRUE COPY OF THE DEMAND NOTICE NO.ITBA/AST/S/156/2021-22/1042161498(1) DATED 30.03.2022 Exhibit P4 A TRUE COPY OF THE APPEAL MEMORANDUM FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 06.07.2022 Exhibit P4(a) A TRUE COPY OF THE STAY PETITION FILED BEFORE THE 1ST RESPONDENT DATED 16.06.2022 Exhibit P5 A TRUE COPY OF THE JUDGMENT DATED 19.07.2019 IN W.A.NO.1639/2019

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