THE MANKARA SERVICE CO-OPERATIVE BANK LTD. vs. THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER

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WP(C)/7469/2023HC KeralaKLHC01017602202306 March 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 noted that the petitioner had already availed the statutory remedy by filing an appeal (Ext.P2) against the assessment order (Ext.P1). Consequently, the writ petition was disposed of by directing the Appellate Authority to consider and pass orders on the appeal at the earliest. The Court also granted interim relief, directing the respondents not to take any coercive steps against the petitioner pursuant to the assessment order until the appeal is disposed of. The core issue of eligibility for Section 80P deduction was therefore left undecided by the High Court, pending the appellate proceedings.

What were the facts?

The petitioner, The Mankara Service Co-operative Bank Ltd., is a Primary Agricultural Credit Co-operative Society. The Assessing Officer passed an assessment order (Ext.P1) rejecting the petitioner's claim for deduction under Section 80P of the Income Tax Act. The reason for rejection was the alleged lack of evidence that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner has filed an appeal (Ext.P2) against this assessment order, which is pending before the Appellate Authority (2nd respondent). The petitioner has approached the High Court by way of a writ petition challenging the assessment order.

What were the issues?

1. Whether the assessment order rejecting the claim for deduction under Section 80P of the Income Tax Act is valid, given the petitioner's status as a Primary Agricultural Credit Co-operative Society. Assessee's Contention: The assessee relies on the judgment of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 to challenge the assessment order, implying that their status as a Primary Agricultural Credit Society should entitle them to the deduction. The assessee argues that the assessment order incorrectly denied the deduction. Revenue's Contention: The revenue, through the Assessing Officer, rejected the deduction on the ground that the petitioner failed to provide evidence satisfying the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act. The judgment does not record any specific arguments made by the revenue before the High Court in the writ petition.

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 MONDAY, THE 6TH DAY OF MARCH 2023 / 15TH PHALGUNA, 1944 WP(C) NO. 7469 OF 2023 PETITIONER: THE MANKARA SERVICE CO-OPERATIVE BANK LTD. NO. P.363, MANKARA P.O., PALAKKAD - 678613 , REPRESENTED BY ITS SECRETARY, SUDHEER K.B. BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENTS: 1 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER NATIONAL E-ASSESSMENT CENTRE, DELHI- 110001 2 NATIONAL FACELESS APPEAL CENTRE DELHI- 110001, REPRESENTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) SRI. JOSE JOSEPH, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.03.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 7469 OF 2023 2 T.R. RAVI, J. -------------------------------------------- W.P.(C).No.7469 of 2023 -------------------------------------------- Dated this the 6th day of March, 2023

JUDGMENT The petitioner is a Primary Agricultural Credit Co-operative Society registered under the Kerala Co-operative Societies Act, 1969. The petitioner has been assessed for tax as per Ext.P1 order rejecting the claim for deduction made under Section 80P of Income Tax Act on the ground that there was no evidence to show that the petitioner has satisfied the ingredients of the Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act. Reliance is placed on the judgment of the Hon’ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 to challenge the assessment order. The petitioner has preferred Ext.P2 appeal and the same is pending before the 2nd respondent. Since the petitioner has already availed the statutory remedy, this writ petition is disposed of directing the Appellate Authority to consider the appeal and pass orders on the same at the earliest. The respondents shall not take any coercive steps against the petitioner

WP(C) NO. 7469 OF 2023 3 pursuant to Ext.P1 assessment order till the disposal of Ext.P2 appeal. T.R.RAVI JUDGE LEK

WP(C) NO. 7469 OF 2023 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 7469/2023 PETITIONER EXHIBITS Exhibit P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2021-22 DTD. 20-12-2022 Exhibit P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 19-01-2023 Exhibit P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 19-01-2023

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