The Champakara Service Co-operative Society vs. THE NATIONAL FACELESS APPEAL CENTRE

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WP(C)/39632/2022HC KeralaKLHC01085856202208 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 on the merits of the assessment order or the petitioner's claim for deduction under Section 80P. Instead, the Court deemed it appropriate to direct the Appellate Authority (the 1st respondent, NFAC) to consider the appeal filed by the petitioner (Ext.P3) in a time-bound manner. The Court ordered the 1st respondent to consider and pass appropriate orders on Ext.P3 expeditiously. Furthermore, the Court directed that no coercive steps would be initiated against the petitioner pursuant to the assessment order (Ext.P1) and the demand notice (Ext.P4) until the disposal of the appeal. The issue of whether the petitioner satisfied the ingredients of a Primary Agricultural Credit Society and the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment were left to be decided by the appellate authority.

What were the facts?

The petitioner, The Champakkara Service Co-operative Society, a Primary Agricultural Credit Society, challenged an assessment order dated September 21, 2022. The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the society met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner had filed an appeal against this assessment order before the National Faceless Appeal Centre (NFAC), the first respondent. The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governed the matter and rendered the assessment incorrect. The High Court of Kerala was considering a writ petition filed by the petitioner.

What were the issues?

1. Whether the assessment order dated 21.09.2022, which rejected the petitioner's claim for deduction under Section 80P on the grounds of insufficient evidence regarding its status as a Primary Agricultural Credit Society, is legally sustainable? (Question of law and fact, concerning Section 80P of the Income Tax Act, 1961). Assessee's Contentions: - The petitioner argued that the assessment order was incorrect, relying on the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, which they contended governed the field. Revenue's Contentions: - The judgment does not record any specific contentions made by the revenue in response to the writ petition.

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. THURSDAY, THE 8TH DAY OF DECEMBER 2022 / 17TH AGRAHAYANA, 1944 WP(C) NO. 39632 OF 2022 PETITIONER/S: THE CHAMPAKARA SERVICE CO-OPERATIVE SOCIETY AGED 36 YEARS LTD NO. R. 3511, H.O.KARUKACHAL, KOTTAYAM DISTRICT, REPRESENTED BY ITS SECRETARY - 686539 BY ADV O.D.SIVADAS RESPONDENT/S: 1 THE NATIONAL FACELESS APPEAL CENTRE, NEW DELHI, REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER, PIN - 110001 2 THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI 100 001 3 THE INCOME TAX OFFICER, WARD (4), WARD 1 & TPS, THIRUVALLA., PIN - 689101 BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA ADV. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 39632 OF 2022 2

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Ext.P1 order of assessment was issued against the petitioner on 21.09.2022. 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 1st 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.P3 and the same is pending consideration before the 1st 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. 39632 OF 2022 3 4. Accordingly, there will be a direction to the 1st respondent to consider and pass appropriate orders on Ext.P3, as expeditiously as possible.

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P1 assessment order and Ext.P4 demand notice. The writ petition is disposed of as above. GOPINATH P. JUDGE ajt

WP(C) NO. 39632 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 39632/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF THE ASSESSMENT ORDER DATED 21.09.2022 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2020-21. Exhibit P2 TRUE COPY OF THE DEMAND NOTICE DATED 21.09.2022 ISSUED BY THE 2ND RESPONDENT DEMANDING TAX. Exhibit P3 TRUE COPY OF THE APPEAL FILED DATED 21.10.2022 BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE THE PERIOD 2020-21. Exhibit P4 TRUE COPY OF THE NOTICE DATED 17.11.2022 ISSUED BY THE 3RD RESPONDENT DEMANDING TAX. Exhibit P5 TRUE COPY OF THE JUDGMENT DATED 16.11.2022 IN WP(C).NO. 36616 OF 2022 RENDERED BY THIS HON'BLE COURT.

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