THE CHENDAMAGALAM SERVICE CO-OPERATIVE BANK LTD. NO.132 vs. ASSESSING OFFICER/INCOME TAX OFFICER, ASSESSING UNIT INCOME TAX DEPARTMENT

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WP(C)/2937/2023HC KeralaKLHC01007097202330 January 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 assessment order or the appeal. Instead, it directed the 2nd respondent, the Commissioner of Income Tax (Appeals), to consider and pass appropriate orders on the petitioner's appeal (Ext.P3) expeditiously, within a period of 2 months from the date of receipt of the judgment. The Court clarified that the appellate authority needs to consider the appeal on its merits only if the delay in filing the appeal is condoned. Until the appeal is disposed of, no coercive steps are to be initiated against the petitioner pursuant to the assessment order (Ext.P1). The ratio of this judgment is that when an appeal is pending before the appellate authority, and the assessee has raised a substantial legal contention, the High Court may direct the appellate authority to decide the appeal within a stipulated time frame, while granting interim protection.

What were the facts?

The petitioner, The Chendamangalam Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. The Assessing Officer passed an assessment order (Ext.P1) rejecting the petitioner's claim for deduction under Section 80P. The reason for rejection was the alleged lack of evidence that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as per the Kerala Co-operative Societies Act. The petitioner challenged this assessment order before the 2nd respondent, the Commissioner of Income Tax (Appeals), relying on the Supreme Court judgment in Mavilayi Service Cooperative Bank Ltd. v. Commissioner of Income Tax. The petitioner had already filed an appeal (Ext.P3) along with a delay condonation application, which was pending consideration.

What were the issues?

1. Whether the assessment order (Ext.P1) is incorrect, considering the judgment of the Supreme Court in Mavilayi Service Cooperative Bank Ltd. v. Commissioner of Income Tax (2021 (1) KLT 485)? (Question of law and fact, turning on Section 80P of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that the assessment itself is incorrect, relying on the Supreme Court's decision in Mavilayi Service Cooperative Bank Ltd. v. Commissioner of Income Tax. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in this writ petition. The assessment order's basis was that the petitioner failed to provide 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 MONDAY, THE 30TH DAY OF JANUARY 2023 / 10TH MAGHA, 1944 WP(C) NO. 2937 OF 2023 PETITIONER: THE CHENDAMAGALAM SERVICE CO-OPERATIVE BANK LTD. NO.132 REPRESENTED BY ITS SECRETARY IN CHARGE, CHENDAMAGALAM P.O, ERNAKULAM DISTRICT, PIN – 683 521 BY ADVS. M.M.MONAYE M.PAUL VARGHESE K.V.SANOSH ANJANA SUGUNAN RESPONDENTS: 1 ASSESSING OFFICER/INCOME TAX OFFICER, ASSESSING UNIT INCOME TAX DEPARTMENT NATIONAL E-ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL STADIUM, DELHI , PIN – 110 003 2 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC) INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, JAWAHARLAL STADIUM, DELHI , PIN – 110 003 3 PRINCIPAL COMMISSIONAR OF INCOME TAX, KERALA, C.R. BUILDING, I.S. PRESS ROAD, KOCHI, PIN – 682 018 4 THE INCOME TAX OFFICER WARD - 2, TPS, KAP COMMERCIAL COMPLEX , O/O ADDITIONAL COMMISSIONER OF INCOME TAX ALUVA RANGE, R.S. ROAD, ALUVA, PIN – 683 101 SRI. JOSE JOSEPH, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 2937 OF 2023 2 T.R.RAVI, J. ---------------------------------------- WP (C) No.2937 of 2023 ------------------------------------------- Dated this the 30th day of January, 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 to submit that the assessment itself is incorrect.

3.

Since the petitioner has already preferred an appeal as Ext.P3 along with the application to condone the delay in filing

the appeal and the same is pending consideration before the WP(C) NO. 2937 OF 2023 3 2nd respondent, I deem it fit that this writ petition be disposed of directing the 2nd respondent to consider the appeal in a time bound manner.

4.

Accordingly, there will be a direction to the 2nd respondent to consider and pass appropriate orders on Ext.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. It is made clear that the appellate authority needs to consider the appeal on merits only if he decides to condone the delay in filing the appeal. T.R.RAVI sn JUDGE

WP(C) NO. 2937 OF 2023 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 2937/2023 PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 19.09.2022 FOR THE AY 2020-21 Exhibit P2 TRUE COPY OF THE DEMAND NOTICE DATED 19.09.2022 Exhibit P3 TRUE COPY OF THE MEMORANDUM OF APPEAL IN FORM 35 DATED 28.11.2022. Exhibit P4 TRUE COPY OF THE THE ACKNOWLEDGMENT RECEIPT DATED 28.11.2022.. Exhibit P5 TRUE COPY OF THE PETITION FOR STAY DATED 28.11.2022, FILED BY THE PETITIONER. Exhibit P6 TRUE COPY OF THE THE E PROCEEDINGS RESPONSE ACKNOWLEDGMENT NUMBERED AS 827075311301122 Exhibit P7 TRUE COPY OF THE JUDGMENT IN WPC 41580 OF 2022 DATED 21.12.2022 RESPONDENT'S EXHIBITS : NIL //TRUE COPY// PA TO JUDGE

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