THE MALANAD SERVICE CO-OPERATIVE BANK LTD NO. K 340, vs. INCOME TAX OFFICER

PDF · subscribers
WP(C)/13498/2022HC KeralaKLHC01027064202227 September 2023Bench: HONOURABLE MR. JUSTICE D. K. SINGH4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that given the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. (supra) was directly on the issue, it was appropriate to set aside the assessment order. The matter was remanded back to the assessing authority for a fresh assessment. The assessing authority was directed to consider the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. (supra) during the fresh assessment. The petitioner was to be afforded an opportunity of hearing before the finalization of the fresh assessment. The Court also noted that if the petitioner remained dissatisfied after the fresh assessment, it could avail the statutory remedy of appeal. No specific finding was made on the merits of the petitioner's claim for exemption under Section 80P.

What were the facts?

The petitioner, The Malanad Service Co-operative Bank Ltd., filed a writ petition challenging an order concerning its income assessment for the assessment year 2017-18. The assessing authority rejected the petitioner's claim for exemption under Section 80P of the Income Tax Act, 1961. The basis for rejection was that the petitioner was allegedly conducting banking business without the necessary Reserve Bank of India clearances, and therefore, was not a Primary Agricultural Credit Society as claimed. The petitioner contended that its case was covered by the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax. The Revenue conceded that the assessing authority had not considered this Supreme Court judgment.

What were the issues?

1. Whether the assessment order dated [date not specified] for assessment year 2017-18, which rejected the petitioner's claim for exemption under Section 80P of the Income Tax Act, 1961, is sustainable in light of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax. Assessee's contentions: The petitioner argued that its case is squarely covered by the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax. Revenue's contentions: The Revenue, through its learned Standing Counsel, fairly submitted that the assessing authority had not taken into consideration the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. (supra).

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 DINESH KUMAR SINGH WEDNESDAY, THE 27TH DAY OF SEPTEMBER 2023 / 5TH ASWINA, 1945 WP(C) NO. 13498 OF 2022 PETITIONER: THE MALANAD SERVICE CO-OPERATIVE BANK LTD NO. K 340, MALANAD SCB BUILDING, VAGAMON P. O., ELAPPARA, IDUKKI- 685503,REPRESENTED BY ITS SECRETARY JAIN XAVIER. BY ADV. SRI. S. ARUN RAJ RESPONDENTS: 1 INCOME TAX OFFICER, WARD-1, PUBLIC LIBRARY BUILDING, SHASTRI ROAD, KOTTAYAM-686001. 2 INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI-110003. 3 THE PRINCIPAL COMMISSIONER OF INCOME TAX, PUBLIC LIBRARY BUILDING, SHASTRI ROAD, KOTTAYAM-686001. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 13498 OF 2022 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No.13498 of 2022 ------------------------- Dated this the 27th day of September, 2023 JUDGMENT 1. The present writ petition has been filed by the petitioner impugning Exhibit P-10 order regarding the assessment of the income of the petitioner for the assessment year 2017-18. The assessing authority has rejected the claim of the petitioner for exemption of his income under Section 80P of the Income Tax Act, 1961 on the ground that the petitioner is in fact carrying banking business without having relevant clearances and permissions from the Reserve Bank of India, and the petitioner is not a Primary Agricultural Credit Society as claimed by the petitioner. In fact the petitioner is in banking business. 2. Learned Counsel for the petitioner submits that the case of the petitioner is squarely covered by the Judgment of the Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485].

WP(C) NO. 13498 OF 2022 3 3. Mr. Jose Joseph, Learned Standing Counsel for the Revenue fairly submits that the assessing authority has not taken into consideration of the Supreme Court Judgment in Mavilayi Service Co-operative Bank Ltd. (supra). 4. Considering the aforesaid fact that the Supreme Court Judgment in Mavilayi Service Co-operative Bank Ltd. (supra) is on the issue, it will be appropriate to set aside the assessment order and remand the matter back to the assessing authority for fresh assessment after taking into consideration of the Supreme Court Judgment in Mavilayi Service Co-operative Bank Ltd. (supra). Let the petitioner appear before the assessing authority and the petitioner may be afforded an opportunity of hearing before finalising the fresh assessment. After finalising the fresh assessment, if the petitioner is dissatisfied, he can avail the statutory remedy of appeal before the concerned authority.

With the above directions, this writ petition stands finally disposed of.

Sd/- DINESH KUMAR SINGH JUDGE Svn

WP(C) NO. 13498 OF 2022 4 APPENDIX OF WP(C) 13498/2022 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 23-12-2019 UNDER SECTION 143(3) OF THE ACT PASSED BY THE INCOME TAX OFFICER, WARD-3, KOTTAYAM FOR THE AY 2017-18 EXHIBIT P2 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), KOTTAYAM CHALLENGING EXHIBIT P-1 ORIGINAL ASSESSMENT EXHIBIT P3 TRUE COPY OF THE NOTICE U/S 148 OF THE ACT DATED 23-3-2021 ISSUED BY THE 1ST RESPONDENT EXHIBIT P4 TRUE COPY OF THE NOTICE U/S 142(1) OF THE ACT ISSUED BY THE 2ND RESPONDENT FOR THE AY 2017-18 EXHIBIT P5 TRUE COPY OF THE LETTER DATED 27.12.2021 FILED IN RESPONSE TO THE NOTICE UNDER SECTION 142(1) OF THE ACT FOR THE AY 2017-18 EXHIBIT P6 TRUE COPY OF THE NOTICE DATED 22-3-2022 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER FOR THE AY 2017-18 EXHIBIT P7 TRUE COPY OF THE REPLY DATED 23-3-2022 E-FILED BY THE PETITIONER ALONG WITH THE ACKNOWLEDGMENT RECEIPT EXHIBIT P8 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 25-3-2022 WITH THE DRAFT ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER FOR THE AY 2017-18 EXHIBIT P9 TRUE COPY OF THE REPLY DATED 26-3-2022 FILED BY THE PETITIONER IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE 2ND RESPONDENT AND THE E- ACKNOWLEDGMENT RECEIPT EXHIBIT P10 TRUE COPY OF THE ASSESSMENT ORDER DATED 28-3-2022 PASSED BY THE 1ST RESPONDENT UNDER SECTION 147 R.W. 144B OF THE ACT FOR THE YEAR 2017-18 EXHIBIT P11 TRUE COPY OF THE JUDGMENT DATED 28-6-2021 PASSED BY THE DIVISION BENCH OF THIS HONOURABLE COURT IN W.A. NO.753 OF 2021

More judgments on Section 80P

All 5,069 judgments and leading authorities on Section 80P →

Recent GST High Court judgments

Search GST case law →