KALLAMKUNNU SERVICE CO-OPERATIVE BANK LIMITED vs. THE INCOME TAX OFFICER

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WP(C)/12765/2023HC KeralaKLHC01028114202311 April 2023Author: HONOURABLE MR. JUSTICE T.R.RAVI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the merits of the case. Instead, it deemed it fit to dispose of the writ petition by directing the third respondent (Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P2) and stay petition (Ext.P3) expeditiously. The court ordered that these be considered within a period of 2 months from the date of receipt of a copy of the judgment. Furthermore, the court directed that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The specific finding on the Section 80P deduction and the validity of the assessment order were left undecided by the High Court.

What were the facts?

The petitioner, Kallamkunnu Service Co-operative Bank Limited, is a Primary Agricultural Credit Society. The Income Tax Officer (ITO) issued an assessment order (Ext.P1) rejecting the petitioner's claim for deduction under Section 80P. The ITO's reasoning was 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 challenged this assessment order before the second respondent (Assessment Unit) and subsequently filed an appeal (Ext.P2) along with a stay petition (Ext.P3) before the third respondent, the Commissioner of Income Tax (Appeals). The appeal and stay petition were pending consideration.

What were the issues?

1. Whether the assessment order rejecting the petitioner's claim for deduction under Section 80P is legally sustainable, considering the petitioner's status as a Primary Agricultural Credit Society. Assessee's Contentions: The petitioner argued that the assessment order was incorrect, relying on the Supreme Court judgment in Mavilayi Service Cooperative Bank Ltd. v. Commissioner of Income Tax, which they contended governs the field. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in response to the petitioner's arguments before the High Court.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE T.R.RAVI TUESDAY, THE 11TH DAY OF APRIL 2023 / 21ST CHAITHRA, 1945 WP(C) NO. 12765 OF 2023 PETITIONER: KALLAMKUNNU SERVICE CO-OPERATIVE BANK LIMITED KALLAMKUNNU P.O., NADAVARAMBA, THRISSUR, REPRESENTED BY ITS SECRETARY SRI. GANESH C.K, PIN – 680 683 BY ADVS. K.S.HARIHARAN NAIR HARIMA HARIHARAN G.REMADEVI RAJATH R NATH MOHANA KUMAR B. RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2(2), AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSSUR, PIN – 680 001 2 ASSESSMENT UNIT NEAC, MAYUR BHAWAN, CONNAUGHT LANE, NEW DELHI, PIN – 110 001 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, DELHI, C-BLOCK, 4TH FLOOR, S.P.M CIVIC CENTER, NEW DELHI, PIN – 110 001 SRI. JOSE JOSEPH, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.04.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 12765 OF 2023 2 T.R.RAVI, J. ---------------------------------------- WP (C) No.12765 of 2023 ------------------------------------------- Dated this the 11th day of April, 2023

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Kerala Cooperative Societies Act, 1969. Ext.P1 order of assessment was issued against the petitioner. 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.

2.

While assailing the assessment order before the 2nd respondent, petitioner relied on the judgment of the Supreme Court in Mavilayi Service Cooperative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 now governs the field thereby rendering the assessment itself as incorrect.

3.

Since the petitioner has already preferred an appeal as WP(C) NO. 12765 OF 2023 3 Ext.P2 and Ext.P3 stay petition and the same is pending consideration before the 3rd respondent, I deem it fit that this writ petition be disposed of directing the 3rd respondent to consider the Ext.P2 appeal and Ext.P3 stay petition in a time bound manner.

4.

Accordingly, there will be a direction to the 3rd respondent to consider and pass appropriate orders on Exts.P2 and P3 as expeditiously as possible within a period of 2 months from the date of receipt of a copy of this judgment.

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P1. T.R.RAVI sn JUDGE

WP(C) NO. 12765 OF 2023 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 12765/2023 PETITIONER'S EXHIBITS Exhibit P1 COPY OF ASSESSMENT ORDER DATED 05-09-2022 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2020-21 Exhibit P2 COPY OF APPEAL MEMORANDUM FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 07-10-2022 AGAINST EXT.P1. Exhibit P3 COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 07-10-2022 IN EXT. P2 APPEAL RESPONDENT'S EXHIBITS : NIL //TRUE COPY// PA TO JUDGE

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