THE THURAVOOR CO-OPERATIVE BANK LTD, vs. INCOME TAX OFFICER,

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WP(C)/16537/2024HC KeralaKLHC01103542202406 August 2024Bench: HONOURABLE MR. JUSTICE GOPINATH P.5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition and quashed the assessment order (Ext.P8). The Court reasoned that while an alternative remedy might ordinarily bar writ jurisdiction, this case presented an exception. It was evident that the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. and the High Court judgment in Peroorkada Service Co-operative Bank Ltd. were not considered by the Assessing Authority. Therefore, the assessment was deemed erroneous and made in ignorance of binding precedents. The Court held that the availability of an alternative remedy would not preclude its jurisdiction in such circumstances. The assessment for the assessment year 2015-16 was restored to the file of the Assessing Officer, who was directed to complete the assessment afresh, specifically taking into account the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. The issue of the deduction under Section 80P itself was not decided on merits but was remanded for fresh consideration.

What were the facts?

The petitioner, The Thuravoor Co-operative Bank Ltd., is a Primary Agricultural Co-operative Society. It contends that the Assessing Officer (AO) wrongly denied it the benefit of deduction under Section 80P of the Income Tax Act, 1961. The petitioner argues that the AO failed to consider binding Supreme Court judgments, specifically Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax, and a Division Bench judgment of the Kerala High Court in Peroorkada Service Co-operative Bank Ltd. v. Principal Commissioner of Income Tax. The petitioner filed a writ petition challenging the assessment order (Ext.P8). The Revenue, represented by the Senior Standing Counsel, argued that the petitioner has an efficacious alternative remedy.

What were the issues?

1. Whether the assessment order, which allegedly ignored binding Supreme Court and High Court judgments, is amenable to challenge through a writ petition despite the availability of an alternative appellate remedy? Assessee's Contentions: - The petitioner argues that the Assessing Officer erred by denying the deduction under Section 80P without considering the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax, Calicut and another; [2021 (1) KLT 485(SC)]. - Reliance is also placed on the Kerala High Court's Division Bench judgment in Peroorkada Service Co-operative Bank Ltd. v. Principal Commissioner of Income Tax; [2022] 442 ITR 141. - The petitioner further cites a Division Bench judgment of the Kerala High Court dated 28.06.2021 in W.A. No.753 of 2021, stating that an erroneous assessment occasioned by ignoring a binding Supreme Court judgment cannot be dismissed as a matter solely for appellate remedy. Revenue's Contentions: - The Senior Standing Counsel for the Income Tax Department argued that the petitioner possesses an efficacious alternative remedy against the assessment order.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. TUESDAY, THE 6TH DAY OF AUGUST 2024 / 15TH SRAVANA, 1946 WP(C) NO. 16537 OF 2024 PETITIONER/S: THE THURAVOOR CO-OPERATIVE BANK LTD, LTD NO. 935 KP 8-105, PUTHUKULANGARA, KUTHIATHODE,THURAVOOR P.O, ALAPPUZHA REPRESENTED BY ITS SECRETARY, PIN - 688532 BY ADV C.A.JOJO RESPONDENT/S: 1 INCOME TAX OFFICER, OFFICE OF THE ITO WARD 2, ALAPPUZHA., PIN - 688001 2 INCOME TAX OFFICER - NFAC, NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-, PIN - 110001 SRI. JOSE JOSEPH (SC- IT DEPT)

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.08.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 16537 OF 2024 2 JUDGMENT

The petitioner is a Primary Agricultural Co-operative Society. According to the petitioner, it is entitled to the benefit of deduction under Section 80P of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). It is submitted that the Assessing Officer wrongly denied the benefit of deduction under Section 80P of the Act, without even referring to the binding judgment of the Supreme court in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax, Calicut and another ; [2021 (1) KLT 485(SC)] . Learned counsel also places reliance of the judgment of the Division Bench of this Court in Peroorkada Service

Co-operative

Bank

Ltd

Principal Commissioner of Income Tax ; [2022] 442 ITR 141 in support of his contention. Learned counsel also placed reliance on the judgment of the Division Bench of this Court dated 28.06.2021 in W.A. No.753 of 2021, where the Division Bench (to which I was also a party) held as follows:-

WP(C) NO. 16537 OF 2024 3 ‘’3…...An erroneous assessment occasioned by ignoring a binding judgment of the Supreme Court cannot be trivialized as an order against which an appellate remedy lies that would provide justice to an assessee.’’

2.

Heard the Senior Standing Counsel appearing for the Income Tax Department also.

3.

Though the Senior Standing Counsel appearing for the Income Tax Department would point out that the petitioner has an efficacious remedy against Ext.P8 order of assessment, I am of the view that, since it is evident that the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd (supra) and the judgment of this Court in Peroorkada Service Co-operative Bank Ltd (supra) have not even been considered by the Assessing Authority, this is also a case where the assessment is erroneous and in ignorance of the binding precedents of the Supreme Court. Therefore, it cannot be said that availability of alternative remedy will bar the jurisdiction of this Court to interfere with such an order.

Therefore, the writ petition is allowed. Ext.P8 order is quashed. The assessment of the petitioner for the assessment year 2015-16 will stand restored to the file of the Assessing Officer, who shall complete the assessment afresh, also taking

WP(C) NO. 16537 OF 2024 4 note of the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd (supra).

The writ petition is ordered accordingly.

Sd/- GOPINATH P. JUDGE ajt

WP(C) NO. 16537 OF 2024 5 APPENDIX OF WP(C) 16537/2024 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE NOTICE U/S 148 FOR AY 2015-16 DATED 07.04.2022 ISSUED BY THE 1ST RESPONDENT Exhibit P2 A TRUE COPY OF THE NOTICE U/S 142(1) DATED 11.03.2023 ISSUED BY THE 2ND RESPONDENT Exhibit P3 A TRUE COPY OF THE REPLY FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 05.04.2023 Exhibit P4 A TRUE COPY OF THE SHOW NOTICE DATED 15.01.2024 ISSUED BY THE 2ND RESPONDENT Exhibit P5 A TRUE COPY OF THE DETAILED REPLY FILED BY THE PETITIONER DATED 17.01.2024 Exhibit P6 A TRUE COPY OF THE NOTICE DATED 24.02.2024 ISSUED BY THE 2ND RESPONDENT Exhibit P7 A TRUE COPY OF THE DETAILED REPLY FILED BY THE PETITIONER DATED 01.03.2024 Exhibit P8 A TRUE COPY OF THE ASSESSMENT ORDER U/S 147 FOR AY 2015-16 DATED 11.03.2024 ISSUED BY THE 2ND RESPONDENT Exhibit P9 A TRUE COPY OF THE DEMAND NOTICE U/S 156 DATED 11.03.2024 ISSUED BY THE2ND RESPONDENT

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