THE OTTOOR SERVICE CO-OPERATIVE BANK LTD. NO.976 vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE

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WP(C)/10774/2024HC KeralaKLHC01092282202415 March 2024Bench: 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 directed the 4th respondent, the Appellate Authority, to consider and pass appropriate orders on the petitioner's application for condonation of delay in filing the appeal and the application for stay (Ext.P5) expeditiously. The Court also ordered that no coercive steps shall be initiated against the petitioner for recovery of any amounts under the penalty order (Ext.P1) until the disposal of the stay petition. It was clarified that the Appellate Authority needs to pass orders on the merits of the stay petition only if the delay in filing the appeal is condoned. The core issue regarding the eligibility for Section 80P deduction was not adjudicated upon by the High Court in this writ petition.

What were the facts?

The petitioner, The Ottoor Service Co-operative Bank Ltd. No. 976, a Primary Agricultural Credit Society, is challenging an order of penalty and a demand notice for the assessment year 2020-21. The penalty order followed an assessment order where the petitioner's claim for deduction under Section 80P was rejected. The rejection was based on the ground that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner has filed an appeal against this assessment order, along with an application to condone the delay in filing the appeal, which is pending before the 4th respondent (The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The petitioner also filed an application for stay (Ext.P5).

What were the issues?

1. Whether the petitioner, a Primary Agricultural Credit Society, satisfies the ingredients of such a society as contemplated under the Kerala Co-operative Societies Act, for the purpose of claiming deduction under Section 80P of the Income Tax Act, 1961. Assessee's Contention: The petitioner, being a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, is entitled to the deduction under Section 80P. The assessment order wrongly rejected this claim. Revenue's Contention: The revenue contended that there was no evidence to show that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act, leading to the rejection of the Section 80P deduction.

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. FRIDAY, THE 15TH DAY OF MARCH 2024 / 25TH PHALGUNA, 1945 WP(C) NO. 10774 OF 2024 PETITIONER/S: THE OTTOOR SERVICE CO-OPERATIVE BANK LTD. NO.976 REPRESENTED BY ITS SECRETARY, CHENNANKODE, VADASSERIKONAM P.O, VARKALA, THIRUVANANTHAPURAM DISTRICT., PIN - 695143 BY ADVS. ARJUN RAGHAVAN T.R.HARIKUMAR POOJA PANKAJ RESPONDENT/S: 1 ASSESSMENT UNIT, INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, ROOM NO 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI., PIN - 110003 2 THE INCOME TAX OFFICER, WARD-2 (1) OFFICE OF THE INCOME TAX OFFICER, AAYAKAR BHAVAN, KOWDIAR P.O, THIRUVANANTHAPURAM DISTRICT., PIN - 695003 3 THE COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM., PIN - 695003 4 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, NORTH BLOCK, DELHI., PIN - 110001 BY ADV ADV. P.G. JAYASHANKAR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 10774 OF 2024 2 JUDGMENT

Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Ext.P1 order of penalty for the assessment year 2020-21 along with demand notice was issued against the petitioner for the assessment year 2020-21. In the assessment order, for the same year, 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.

Since the petitioner has already preferred Ext.P3 appeal along with an application to condone the delay in filing the appeal and the same is pending consideration before the 4th respondent, I deem it fit that this writ petition be disposed of directing the Appellate Authority to consider the application for condonation of delay and Ext.P5 application for stay in a time bound manner.

3.

Accordingly, there will be a direction to the 4th respondent to consider and pass appropriate orders on Ext.P5, as expeditiously as possible.

WP(C) NO. 10774 OF 2024 3

4.

Till the disposal of Ext.P5, no coercive steps shall be initiated against the petitioner for recovery of any amounts under Ext.P1 order imposing penalty. It is made clear that the 4th respondent needs to pass orders on the merits of Ext.P5 stay petition only if he decides to condone the delay in filing the appeal.

The writ petition is disposed of as above. Sd/- GOPINATH P. JUDGE ajt

WP(C) NO. 10774 OF 2024 4 APPENDIX OF WP(C) 10774/2024 PETITIONER EXHIBITS Exhibit-P1 A TRUE COPY OF THE PENALTY ORDER ALONG WITH DEMAND NOTICE DATED 17-03-2023 ISSUED BY THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2020- 2021 Exhibit-P2 A TRUE COPY OF THE COMPUTATION SHEET APPENDED IN EXT-P1 Exhibit-P3 A TRUE COPY OF THE ONLINE APPEAL DATED 10-11- 2023 FILED BEFORE THE 4TH RESPONDENT, AGAINST EXT-P1 ASSESSMENT ORDER Exhibit-P4 A TRUE COPY OF THE NOTICE DATED 03-11-2023 ISSUED BY THE 2ND RESPONDENT Exhibit-P5 A TRUE COPY OF STAY PETITION DATED 11-11-2023 PREFERRED BY THE PETITIONER IN EXT-P2 APPEAL Exhibit-P6 A TRUE COPY OF THE JUDGMENT DATED 08-07-2019 IN WP(C) NO.18484 OF 2019 Exhibit-P7 A TRUE COPY OF THE JUDGMENT DATED 24-02-2020 IN WP(C) NO.5205 OF 2020

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