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

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WP(C)/42475/2022HC KeralaKLHC01092112202223 December 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the merits of the case. Instead, it deemed it appropriate to dispose of the writ petition by directing the Appellate Authority (the 2nd respondent, Commissioner of Income Tax (Appeals)) to consider the appeal (Ext.P4) filed by the petitioner in a time-bound manner. The court directed the 2nd respondent to consider and pass appropriate orders on Ext.P4 as expeditiously as possible. Furthermore, the court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P2) until the disposal of the appeal. The issue of whether the petitioner is entitled to the deduction under Section 80P was expressly left undecided by the High Court, as the matter was remanded for consideration by the appellate authority.

What were the facts?

The petitioner, Karthedom Rural Co-operative Society Ltd. No. 385, is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. The Income Tax Officer (ITO) issued an assessment order (Ext.P2) on March 30, 2022, rejecting the petitioner's claim for deduction under Section 80P. The ITO's reasoning was that the petitioner failed to provide evidence demonstrating it met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner challenged this assessment order before the Commissioner of Income Tax (Appeals) (NFAC), arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the situation and renders the assessment incorrect. The appeal (Ext.P4) was pending before the NFAC.

What were the issues?

1. Whether the assessment order dated March 30, 2022, rejecting the deduction under Section 80P of the Income Tax Act, 1961, is legally sustainable, considering the petitioner's status as a Primary Agricultural Credit Society. Assessee's Contention: The assessee contended that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax (2021 (1) KLT 485) is applicable and supports its claim for deduction, making the assessment order incorrect. Revenue's Contention: The revenue, through the assessment order, rejected the deduction on the grounds that the assessee did not provide sufficient evidence to establish its status as a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act.

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. 42475 OF 2022 PETITIONER: KARTHEDOM RURAL CO-OPERATIVE SOCIETY LTD. NO. 385 KARTHEDOM MALIPURAM, KOCHI, ERNAKULAM, PIN – 682 511. REPRESENTED BY ITS SECRETARY BY ADVS. M.SASINDRAN SREEHARI INDUKALADHARAN RESPONDENTS: 1 THE INCOME TAX OFFICER NON CORP WARD 2(4) AND TPS KOCHI CENTRAL REVENUE BUILDING I S PRESS ROAD KACHERIPADY KOCHI KERALA, PIN – 682 018. 2 THE COMMISSIOINER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEALS CENTRE (NFAC) NEW DELHI., PIN – 110 001. BY ADV JOSE JOSEPH OTHER PRESENT: ADV CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.42475/2022 -:2:-

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Ext.P2 order of assessment was issued against the petitioner on 30.03.2022. 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 canvas 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.

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. The writ petition is disposed of as above. GOPINATH P.

JUDGE ats

Appendix — schedule of exhibits
APPENDIX OF WP(C) 42475/2022 PETITIONER EXHIBITS Exhibit1 A 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 2014-2015 DATED 30.03.2022 Exhibit P3 A TRUE COPY OF THE DEMAND NOTICE NO.ITBA/AST/S/156/2021-22/1042162901(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 18.06.2022 Exhibit P5 A TRUE COPY OF THE JUDGMENT DATED 19.07.2019 IN W.A.NO.1639/2019

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