KARAKULAM SERVICE CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY B BIJUKUMAR vs. THE INCOME TAX OFFICER

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WP(C)/554/2024HC KeralaKLHC01001196202409 January 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH11 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala directed the Income Tax Appellate Tribunal (ITAT) to consider and pass orders on the petitioner's applications for condoning the delay and the stay petition expeditiously. The Court did not delve into the merits of the tax dispute itself, which remains pending before the ITAT. The operative direction is for the ITAT to process the interlocutory applications filed by the petitioner. The Court specified that the orders should preferably be passed within a period of two months. The core principle here is the High Court's supervisory jurisdiction over quasi-judicial bodies to ensure timely disposal of pending applications, especially when recovery proceedings are threatened. The issue of whether the interest income on deposits is eligible for deduction under Section 80P was not decided by the High Court, as it was awaiting adjudication by the ITAT.

What were the facts?

The petitioner, Karakulam Service Co-operative Bank Ltd., a Primary Agricultural Credit Co-operative Society, filed returns for assessment years 2012-13 to 2017-18 after receiving notices under Section 148 of the Income Tax Act. The petitioner claimed 100% deduction under Section 80P, resulting in nil income. The assessing authority initially disallowed the Section 80P exemption and passed assessment orders under Section 143(3) read with Section 147 on December 20, 2019. The petitioner appealed to the Commissioner of Income Tax (Appeals) (CIT(A)). The CIT(A), following the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut, allowed the deduction under Section 80P(2)(a)(i) but disallowed the interest income on deposits. Aggrieved by the CIT(A)'s order dated August 28, 2023, the petitioner filed further appeals before the Income Tax Appellate Tribunal (ITAT) along with applications for condoning a 39-day delay and a stay petition.

What were the issues?

1. Whether the Income Tax Appellate Tribunal (ITAT) should be directed to expeditiously consider and pass orders on the petitioner's applications for condoning the delay and for a stay of recovery proceedings. (Question of procedure/direction) Assessee's Contention: The petitioner argues that the ITAT has not yet decided on their applications for condoning the delay and for a stay petition. They are facing threats of tax recovery based on the CIT(A)'s order dated August 28, 2023. They seek a direction for the ITAT to consider and pass orders on these applications expeditiously. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the ITAT's delay in deciding the applications or the stay petition.

Which sections of the Income-tax Act were involved?

Section 80P,Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

Heard together (3 matters)

WP(C) NO. 44181 OF 2023
WP(C).554/2024
WP(C) NO. 44199 OF 2023

Read from the judgment's own cause title. This page is filed under one of them.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 9TH DAY OF JANUARY 2024 / 19TH POUSHA, 1945 WP(C) NO. 44181 OF 2023 PETITIONER: KARAKULAM SERVICE CO OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY B BIJUKUMAR AGED 50 YEARS KP-1/382 KARAKULAM VILLAGE, KARAKULAM PO, NEDUMANGAD TALUK, THIRUVANANTHAPURAM, PIN - 695564 BY ADVS. DIVYA RAVINDRAN ALAN PRIYADARSHI DEV RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2 (3) AAYAKKAR BHAVAN, THIRUVANANATHAPURM, PIN - 695003 2 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, INCOME TAX DEPARTMENT, M INISTRY OF FINANCE, JAHARLAL STADIUM , DELHI, PIN - 110003 3 THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, 1ST FLOOR, BLOCK CI & C-II, KENDRIYA BHAWAN, OPP. CSEZ, PIN - 682037 BY ADV ADV. P.G. JAYASHANKAR PGJ P.G. JAYASHANKAR-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.01.2024, ALONG WITH WP(C).554/2024, 44199/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C)No.44181 of 2023 and con.cases 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 9TH DAY OF JANUARY 2024 / 19TH POUSHA, 1945 WP(C) NO. 554 OF 2024 PETITIONER: KARAKULAM SERVICE CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY B BIJUKUMAR AGED 50 YEARS KP-1/382, KARAKULAM P O, NEDUMANGAD, TRIVANDRUM, PIN - 695564 BY ADVS. DIVYA RAVINDRAN ALAN PRIYADARSHI DEV RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2(3), AAYAKKAR BHAVAN THIRUVANANTHAPURAM, PIN - 695003 2 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, JAWAHARLAL STADIUM, DELHI, PIN - 110003 3 INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, 1ST FLOOR, (BLOCK C-I & C-II), KENDRIYA BHAVAN, OPP. CSEZ, KAKKANAD, COCHIN, PIN - 682037 BY ADV ADV. P.G. JAYASHANKAR PGJ THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.01.2024, ALONG WITH WP(C).44181/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C)No.44181 of 2023 and con.cases 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 9TH DAY OF JANUARY 2024 / 19TH POUSHA, 1945 WP(C) NO. 44199 OF 2023 PETITIONER: KARAKULAM SERVICE CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY B BIJUKUMAR AGED 50 YEARS KP-1/382, KARAKULAM P O, NEDUMANGAD, TRIVANDRUM, PIN - 695564 BY ADVS. DIVYA RAVINDRAN ALAN PRIYADARSHI DEV RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2(3), AAYAKKAR BHAVAN THIRUVANANTHAPURAM, PIN - 695003 2 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, JAWAHARLAL STADIUM, DELHI, PIN - 110003 3 INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, 1ST FLOOR, (BLOCK C-I & C-II), KENDRIYA BHAVAN, OPP. CSEZ, KAKKANAD, COCHIN, PIN - 682037 BY ADV ADV. P.G. JAYASHANKAR PGJ THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.01.2024, ALONG WITH WP(C).44181/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C)No.44181 of 2023 and con.cases 4 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 9TH DAY OF JANUARY 2024 / 19TH POUSHA, 1945 WP(C) NO. 44244 OF 2023 PETITIONER: KARAKULAM SERVIC E CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY B BIJUKUMAR AGED 50 YEARS KP-1/382, KARAKULAM POST OFFICE, NEDUMANGADU, TRIVANDRUM, PIN - 695564 BY ADVS. DIVYA RAVINDRAN ALAN PRIYADARSHI DEV RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2(3), AAYAKAR BHAWAN, THIRUVANANTHAPURAM, PIN - 695003 2 THE COMMISSIONER OF INCOME TAX (APEALS) NATIONAL FACELESS APPEAL CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, JAWAHARLAL STADIUM, DELHI, PIN - 110003 3 INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, 1ST FLOOR, BLOCK NO C-I & C-II) KENDRIYA BHAWAN, OPP: CSEZ. KAKKANAD, COCHIN, PIN - 682307 BY ADV ADV. P.G. JAYASHANKAR PGJ THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.01.2024, ALONG WITH WP(C).44181/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C)No.44181 of 2023 and con.cases 5 JUDGMENT Dated this the 9th day of January, 2024 These writ petitions involved common question of law and facts and therefore, same are taken together and decided accordingly. 2. The petitioner society claims to be a Primary Agricultural Credit Co-operative Society. The petitioner filed return of its income for the assessment year 2012-13 to 2017- 18 after notice under Section 148 of the Income Tax Act was issued. The petitioner claimed declared nil income after claiming 100% deduction under Section 80P of the Income Tax Act. However, the assessing authority did not accept the claim of the petitioner for exemption under Section 80P of the Income Tax Act and vide assessment orders dated 20.12.2019 under Section 143(3) read with Section 147 of the Income Tax Act is allowed the exemption under Section 80P. Aggrieved by the said assessment orders, the petitioner had filed appeals before the 2nd respondent. The 2nd respondent following the

WP(C)No.44181 of 2023 and con.cases 6 judgment of the Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. V. Commissioner of Income Tax, Calicut [2021] 123 taxmann.com 161 (SC), allowed the deduction claimed by the petitioner under Section 80P(2)(a)(i) of the Income Tax Act. However, the 2nd respondent did not allow the interest income received by the petitioner on deposits. Aggrieved by the said order dated 28.08.2023 passed by the 2nd respondent on appeals, the petitioner had preferred further appeal before the Income Tax Appellate Tribunal in Ext.P3 along with applications for condoning the delay of 39 days as well as the stay petition. 3. Learned counsel for the petitioner submits that the 3rd respondent has not taken decision on the application for condoning the delay as well as the stay petition and the petitioner is being threatened by recovery of tax in accordance with the order passed by the 2nd respondent dated 28.08.2023. 4. Learned counsel for the petitioner submits that the 3rd respondent may be given direction to consider and pass orders on the applications for condoning the delay as well as the stay petition, expeditiously.

WP(C)No.44181 of 2023 and con.cases 7 Considering the said prayer, these writ petitions stand disposed of with direction to the 3rd respondent to consider and pass orders on applications for condoning the delay as well as the stay petition expeditiously, preferably within a period of two months. Sd/- DINESH KUMAR SINGH AP JUDGE

WP(C)No.44181 of 2023 and con.cases 8 APPENDIX OF WP(C) 44181/2023 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2011-12 DATED 18.12.2018 EXHIBIT P2 TRUE COPY OF THE APPELLATE ORDER PASSED BY THE 2ND RESPONDENT DATED 28.8.2023 EXHIBIT P3 TRUE COPY OF APPEAL MEMO DATED 23.11.2023 FOR AY 2011-12 EXHIBIT P4 TRUE COPY OF THE STAY PETITION FILED DATED 23.11.2023 EXHIBIT P5 TRUE COPY OF THE DELAY CONDONATION PETITION DATED 23.11.2023 EXHIBIT P6 TRUECOPY OF THE NOTICE ISSUED BY THE 3RD RESPONDENT DATED 28.9.2023

WP(C)No.44181 of 2023 and con.cases 9 APPENDIX OF WP(C) 554/2024 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER AND DEMAND NOTICE DATED 20.12.2019 FOR AY 2012-13 ISSUED BY THE 1ST RESPONDENT Exhibit P2 TRUE COPY OF THE APPELLATE ORDER PASSED BY THE 2ND RESPONDENT FOR THE AY 2012-13 DATED 28.08.2023 Exhibit P3 5. TRUE COPY OF THE MEMORANDUM OF APPEAL FOR THE ASSESSMENT YEAR 2012-13 DATED 23.11.2023 FILED BEFORE THE 3RD RESPONDENT Exhibit P4 TRUE COPY OF THE STAY PETITION DATED 23.11.2023 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT Exhibit P5 TRUE COPY OF DELAY PETITION DATED 23.11.2023 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT

WP(C)No.44181 of 2023 and con.cases 10 APPENDIX OF WP(C) 44199/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER AND DEMAND NOTICE 24.12.2018 FOR AY 2016-17 Exhibit P2 TRUE COPY OF THE APPELLATE ORDER PASSED BY THE 2ND RESPONDENT FOR THE AY 2016-17 DATED 28.08.2023 Exhibit P3 TRUE COPY OF THE MEMORANDUM OF APPEAL FOR THE ASSESSMENT YEAR 2016-17 DATED 23.11.2023 FILED BEFORE THE 3RD RESPONDENT Exhibit P4 TRUE COPY OF THE STAY PETITION DATED 23.11.2023 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT Exhibit P5 TRUE COPY OF DELAY PETITION DATED 23.11.2023 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT Exhibit P6 TRUE COPY OF THE REVENUE RECOVERY NOTICE DATED 28.09.2023 ISSUED BY THE 1ST RESPONDENT

WP(C)No.44181 of 2023 and con.cases 11 APPENDIX OF WP(C) 44244/2023 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF ASSESSMENTORDER FOR AY 2017-18 DATED 16.12.2019 Exhibit P2 TRUE COPY OF APPELLATE ORDER FOR AY 2017-18 DATED 28.08.2023 EXHIBIT P3 TRUE COPYOF APPEAL MEMORANDUM DATED 27.11.2023 EXHIBIT P4 TRUE COPY OF STAY PETITION DATED 27.11.2023 EXHIBIT P5 TRUECOPYOF DELAY PETITION DATED 27.11.2023 EXHIBIT P6 TRUE COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DATED 28.09.2023

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