THE PRINCIPAL COMMISSIONER OF INCOME TAX vs. THE PAZHAVANGADIKKARA SERVICE CO-OPERATIVE BANK LTD.

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ITA/15/2019HC KeralaKLHC01093615201802 August 2024Bench: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR,HONOURABLE MR. JUSTICE SYAM KUMAR V.M.6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the Income Tax Appeals filed by the Principal Commissioner of Income Tax. The Court held that, in view of the express provision of Section 80A(5) of the Income Tax Act, a claim for deduction under Section 80P can only be made in a return filed within the time prescribed by Sections 139(1), 139(4), 142(1), or 186 of the Act. Since the assessee had not filed any valid return within the permitted statutory time, their claim for deduction under Section 80P should not have been allowed. The Court followed its earlier judgment in I.T.Appeal No.120 of 2019. Consequently, the impugned orders of the Tribunal were set aside, and the questions of law were answered in favour of the revenue and against the assessee. No issue was expressly left undecided.

What were the facts?

These Income Tax Appeals (ITA Nos. 11 and 15 of 2019) are filed by the Principal Commissioner of Income Tax, Kottayam, against the orders of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, dated 09.07.2018 (ITA No. 200 of 2018) and an unspecified date in ITA No. 201 of 2018. The appeals concern the respondent-assessee, M/s. The Pazhavangadikara Service Co-operative Bank Ltd. The core issue revolves around the assessee's entitlement to a deduction under Section 80P of the Income Tax Act. The High Court is considering these appeals against the ITAT's decision, which had apparently allowed the deduction.

What were the issues?

1. Whether the assessee is entitled to the benefit of deduction under Section 80P of the Income Tax Act, 1961, when the claim was not made in a return filed within the time prescribed under Sections 139(1), 139(4), 142(1), or 186 of the Act, in light of Section 80A(5) of the Act. Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The focus is on the revenue's argument and the court's reliance on its prior decision. Revenue's Contention: The revenue, through its learned Standing Counsel Sri. Jose Joseph, argued that the assessee was not entitled to the deduction under Section 80P because no valid return was filed within the statutory time limits prescribed by Sections 139(1), 139(4), 142(1), or 186 of the Act. This argument is based on the express provision of Section 80A(5) of the Act. The revenue relies on a previous judgment of the High Court in I.T.Appeal No.120 of 2019.

Which sections of the Income-tax Act were involved?

Section 80P,Section 80A(5),Section 139(1),Section 139(4),Section 142(1),Section 186

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M. FRIDAY, THE 2ND DAY OF AUGUST 2024 / 11TH SRAVANA, 1946 ITA NO. 11 OF 2019 AGAINST THE ORDER/JUDGMENT DATED 09.07.2018 IN ITA NO.200 OF 2018 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/RESPONDENT THE PRINCIPAL COMMISSIONER OF INCOME TAX KOTTAYAM. BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT/ASSESSEE M/S.THE PAZHAVANGDIKKARA SERVICE CO-OPERATIVE BANK LTD RANNI,PATHANAMTHITTA-689673. BY ADVS. SRI.ANIL D. NAIR SRI.R.SREEJITH SRI.ACHYUT K PADMARAJ SHRI.GOKULRAJ L. SMT. ARYA ANIL THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 02.08.2024, ALONG WITH ITA.15/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA Nos.11 and 15 of 2019 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M. FRIDAY, THE 2ND DAY OF AUGUST 2024 / 11TH SRAVANA, 1946 ITA NO. 15 OF 2019 AGAINST THE ORDER/JUDGMENT DATED IN ITA NO.201 OF 2018 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/RESPONDENT/RESPONDENT THE PRINCIPAL COMMISSIONER OF INCOME TAX KOTTAYAM. BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: THE PAZHAVANGADIKKARA SERVICE CO-OPERATIVE BANK LTD. , PAZHAVANGADIKKARA P.O, RANNI,PATHANAMTHITTA-689673. BY ADVS. SRI.ANIL D. NAIR SRI.SREEJITH R.NAIR SRI.ACHYUT K PADMARAJ SHRI.GOKULRAJ L. SMT. ARYA ANIL THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 02.08.2024, ALONG WITH ITA.11/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA Nos.11 and 15 of 2019 3 J U D G M E N T ============ Dr. A.K.Jayasankaran Nambiar, J. The issue involved in these I.T.Appeals pertains to the entitlement of the respondent-assessee to the benefit of the deduction under Section 80P of the Income Tax Act ('the Act' for short). 2. The learned Standing Counsel for the Income Tax Department, Sri.Jose Joseph, brings to our notice a decision of this Court dated 14.03.2023 in I.T.Appeal No.120 of 2019, where it is held that in view of the express provision of Section 80A(5) of the Act, a claim for deduction under Section 80P of the Act can be made by an assessee only in a return filed within the time prescribed for filing such returns under Sections 139(1), 139(4), 142(1) or Section 186 of the Act. In as much as in the instant case, the assessee had not filed any valid return, as per the statutory provisions aforementioned within the time permitted by the statute, we find that their claim for deduction under Section 80P of the Act, should not have been allowed as was done by the Appellate Tribunal in

ITA Nos.11 and 15 of 2019 4 the orders impugned in these appeals. Accordingly, following our own earlier judgment in I.T.Appeal No.120 of 2019, we allow the I.T. Appeals by setting aside the impugned order of the Tribunal and answering the questions of law raised therein in favour of the revenue and against the assessee.

Sd/- DR. A.K.JAYASANKARAN NAMBIAR

JUDGE

Sd/- SYAM KUMAR V.M. JUDGE smm

ITA Nos.11 and 15 of 2019 5 APPENDIX OF ITA 11/2019 PETITIONER ANNEXURES ANNEXURE A ASSESSMENT ORDER U/S 143(3)DTD.27-12- 2016. ANNEXURE B CIT

(A)'S

ORDER

NO.ITA T.38/CIT(A)/KTM/2016-17 DATED 26-02- 2018. ANNEXURE C ITAT'S ORDER IN ITA.NO.200/C0CH/2018 DATED 09/07/2018.

ITA Nos.11 and 15 of 2019 6 APPENDIX OF ITA 15/2019 PETITIONER ANNEXURES ANNEXURE A ASSESSMENT

ORDER

U/S 143(3)DTD.29/03/2016 DATED 30.01.2014. ANNEXURE B CIT

(A)'S

ORDER

NO.ITA T.13/CIT(A)/KTM/2016-17

DATED 26.02.2018. ANNEXURE C ITAT'S ORDER IN ITA.NO.201/COCH/2018 DATED 09/07/2018.

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