THE CHIRAYINKEEZHU SERVICE CO-OPERATIVE BANK LTD. NO.1155 vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE,

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WP(C)/10783/2024HC KeralaKLHC01092292202415 March 2024Bench: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the 3rd respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the stay petition (Ext.P5) after providing the petitioner an opportunity of hearing. Until an order is passed on the stay petition, the recovery of any amount pursuant to the penalty order (Ext.P2) is stayed. The Court did not decide the merits of the appeal or the penalty proceedings. The primary relief granted was a procedural one, ensuring that recovery is halted pending the appellate authority's decision on the stay application.

What were the facts?

The petitioner, Chirayinkeezhu Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, is challenging an assessment order under Section 143(3) of the Income Tax Act, 1961. The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating that the petitioner did not satisfy the criteria of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. Subsequently, penalty proceedings were initiated, and a penalty order (Ext.P2) and demand notice were issued on March 28, 2023. The petitioner filed an appeal (Ext.P4) and a stay petition (Ext.P5) before the Commissioner of Income Tax (Appeals). This writ petition seeks a stay of recovery of the penalty pending the decision on the stay petition.

What were the issues?

1. Whether the petitioner, a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969, satisfies the conditions for claiming deduction under Section 80P of the Income Tax Act, 1961, when its claim was rejected by the Assessing Officer on the ground of not meeting the statutory ingredients of a Primary Agricultural Credit Society. Contentions: Assessee: The petitioner has filed an appeal and a stay petition before the appellate authority and seeks a stay of recovery of the penalty pending the disposal of the stay petition. Revenue: The learned Standing Counsel for the Income Tax Department appeared.

Which sections of the Income-tax Act were involved?

Section 143(3),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. 10783 OF 2024 PETITIONER/S: THE CHIRAYINKEEZHU SERVICE CO-OPERATIVE BANK LTD. NO.1155 REPRESENTED BY ITS SECRETARY-IN-CHARGE, CHIRAYINKEEZHU P.O, THIRUVANANTHAPURAM DISTRICT., PIN - 695304 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 (5) OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX, RANGE-2, AAYAKAR BHAVAN, KOWDIAR P.O, THIRUVANANTHAPURAM DISTRICT., PIN - 695003 3 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, NORTH BLOCK, DELHI., PIN - 110001 SRI. P G JAYASHANKAR (SR SC) 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. 10783 OF 2024 2 JUDGMENT

Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Assessment was completed against the petitioner under the provisions of Section 143 (3) of the Income Tax Act, 1961. 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 the petitioner satisfied the ingredients of the Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act. Thereafter, penalty proceedings were initiated and Ext.P2 penalty order along with a demand notice was also issued on 28.03.2023. The only relief sought for is a stay of recovery of penalty pending consideration of Ext.P5 stay petition in Ext.P4 appeal, by the Appellate Authority.

2.

Heard Sri. P G. Jaya Shankar, the learned Standing Counsel appearing for the Income Tax Department also.

3.

Since the petitioner has preferred Ext.P4 appeal along with Ext.P5 stay petition before the 3rd respondent against Ext.P2, this writ petition will stand disposed of, directing the 3rd respondent to consider and pass orders on

WP(C) NO. 10783 OF 2024 3 Ext.P5, after affording an opportunity of hearing to the petitioner. Till such time as orders are passed on Ext.P5, recovery of any amount pursuant to Ext.P2 shall remain stayed.

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

WP(C) NO. 10783 OF 2024 4 APPENDIX OF WP(C) 10783/2024 PETITIONER EXHIBITS Exhibit-P1 A TRUE COPY OF THE DEMAND NOTICE DATED 14-07- 2022 ISSUED BY THE 1ST RESPONDENT Exhibit-P2 A TRUE COPY OF THE PENALTY ORDER ALONG WITH DEMAND NOTICE DATED 28-03-2023 ISSUED BY THE 1ST RESPONDENT Exhibit-P3 A TRUE COPY OF THE COMPUTATION SHEET DATED 28-03-2023 Exhibit-P4 A TRUE COPY OF THE ONLINE APPEAL DATED 13-03- 2024 FILED BEFORE THE 3RD RESPONDENT, AGAINST EXT-P2 PENALTY ORDER Exhibit-P5 A TRUE COPY OF STAY PETITION ALONG WITH ACKNOWLEDGMENT DATED 13-03-2024 PREFERRED BY THE PETITIONER IN EXT-P4 APPEAL Exhibit-P6 A TRUE COPY OF THE NOTICE DATED 28-11-2023 ISSUED BY THE 2ND RESPONDENT Exhibit-P7 A TRUE COPY OF THE JUDGMENT DATED 08-07-2019 IN WP(C) NO.18484 OF 2019 Exhibit-P8 A TRUE COPY OF THE JUDGMENT DATED 24-02-2020 IN WP(C) NO.5205 OF 2020

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