ALANALLUR CO-OPERATIVE RURAL CREDIT SOCIETY LTD. vs. THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER

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WP(C)/4971/2023HC KeralaKLHC01011978202316 February 2023Author: HONOURABLE MR. JUSTICE T.R.RAVI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, in its writ jurisdiction, did not decide the merits of the assessment order or the appeal. Instead, the Court acknowledged that the petitioner had already availed the statutory remedy by filing an appeal against the assessment order. Therefore, the writ petition was disposed of with a direction to the Appellate Authority (the 2nd respondent) to consider and pass orders on the appeal at the earliest. Additionally, the Court granted interim relief by directing the respondents not to take any coercive steps against the petitioner pursuant to the assessment order (Ext.P1) until the appeal is disposed of. The principle derived from this judgment is that when a statutory appeal is pending, a writ court may direct expeditious disposal of the appeal and grant interim protection, rather than adjudicating the underlying tax dispute.

What were the facts?

The petitioner, Alanallur Co-operative Rural Credit Society Ltd., is a Primary Agricultural Credit Co-operative Society registered under the Kerala Co-operative Societies Act, 1969. 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 rejection was based on the ground that the petitioner failed to provide evidence satisfying the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner challenged this assessment order by filing an appeal (Ext.P2) before the appellate authority, which was pending. The petitioner then filed a writ petition before the High Court of Kerala seeking directions for the disposal of the appeal and a stay on coercive steps.

What were the issues?

1. Whether the assessment order rejecting the claim for deduction under Section 80P of the Income Tax Act is sustainable, given that the petitioner is a Primary Agricultural Credit Co-operative Society registered under the Kerala Co-operative Societies Act, 1969. Assessee's Contention: The assessee argued that the assessment order is unsustainable as it wrongly rejected the deduction under Section 80P. The assessee relied 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 support its claim. The assessee had already preferred an appeal against the assessment order. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the writ petition. The revenue's primary stance, as reflected in the assessment order, was that the petitioner did not provide sufficient evidence to satisfy the ingredients of a Primary Agricultural Credit Society.

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 THURSDAY, THE 16TH DAY OF FEBRUARY 2023 / 27TH MAGHA, 1944 WP(C) NO. 4971 OF 2023 PETITIONER: ALANALLUR CO-OPERATIVE RURAL CREDIT SOCIETY LTD. NO. P 1333, 13,731, 732, 733, OLIPUZHA ROAD, ALANALLUR P.O., PALAKKAD- 678601 , REPRESENTED BY ITS SECRETARY, SREEJITH.P.T. BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENTS: 1 THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER NATIONAL E-ASSESSMENT CENTRE, DELHI, PIN - 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 16.02.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 4971 OF 2023 2 T.R. RAVI, J. -------------------------------------------- W.P.(C).No.4971 of 2023 -------------------------------------------- Dated this the 16th day of February, 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. 4971 OF 2023 3 pursuant to Ext.P1 assessment order till the disposal of Ext.P2 appeal. T.R.RAVI JUDGE LEK

WP(C) NO. 4971 OF 2023 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 4971/2023 PETITIONER EXHIBITS Exhibit P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2021-22 DTD. 18-12-2022 Exhibit P2 COPYOF APPEAL FILED BY THE PETITIONER BEFORE 2ND RESPONDENT DTD. 17-01-2023 Exhibit P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE 2ND RESPONDENT DTD. 17-01-2023

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