MANGODE SERVICE COOPERATIVE BANK LIMITED, PALAKKAD, REPRESENTED BY ITS SECRETARY, SMT. SARASWATHI vs. ADDITIONAL /JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, ASSESSMENT UNIT

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WP(C)/2205/2023HC KeralaKLHC01005416202324 January 2023Author: HONOURABLE MR. JUSTICE T.R.RAVI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, in this writ petition, did not decide the merits of the assessment order or the appeal. Instead, it noted that the petitioner had already availed a statutory remedy by filing an appeal (Ext.P2) before the Appellate Authority. Therefore, the Court disposed of the writ petition by directing the Appellate Authority to consider and pass orders on the appeal at the earliest. The Court also granted interim relief to the petitioner by directing that no coercive steps would be taken against it pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The specific finding on the entitlement to deduction under Section 80P was left to be decided by the Appellate Authority.

What were the facts?

The petitioner, Mangode Service Co-operative Bank Limited, a Primary Agricultural Credit Society, filed a writ petition challenging an assessment order (Ext.P1). This order rejected its claim for deduction under Section 80P of the Income Tax Act. The rejection was based on the ground 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 relied on the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax. The petitioner had already filed an appeal (Ext.P2) against the assessment order, which was pending before the second respondent, the Commissioner of Income Tax (Appeals), NFAC, Delhi.

What were the issues?

1. Whether the petitioner, a Primary Agricultural Credit Society, is entitled to deduction under Section 80P of the Income Tax Act, 1961, when the assessment order questions its satisfaction of the ingredients of such a society under the Kerala Co-operative Societies Act, 1969, in light of the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax. Assessee's contention: The petitioner argued that the assessment order was erroneous and relied on the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax to support its claim for deduction under Section 80P. Revenue's contention: The judgment does not record any specific contentions from the revenue regarding the merits of the case. The revenue's position is implicit in the assessment order that rejected the deduction.

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 24TH DAY OF JANUARY 2023 / 4TH MAGHA, 1944 WP(C) NO. 2205 OF 2023 PETITIONER: 1 MANGODE SERVICE COOPERATIVE BANK LIMITED, 01, MANGODE PO CHERPULACHERRY, PALAKKAD - 679 503 KERALA, INDIA REPRESENTED BY ITS SECRETARY, SMT. SARASWATHI K. AGED 58 YEARS BY ADV ALAN PRIYADARSHI DEV RESPONDENTS: 1 ADDITIONAL /JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, ASSESSMENT UNIT, DELHI NATIONAL E-ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), NFAC, DELHI NATIONAL FACELESS APPEAL CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, JAWAHARLAL NEHRU STADIUM, DELHI-110003. SRI. JOSE JOSEPH, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.2205 of 2023 2 T.R. RAVI, J. ----------------------------------------- W.P.(C.) No.2205 of 2023 ----------------------------------------- Dated this the 24th day of January, 2023

JUDGMENT The petitioner is a Primary Agricultural Credit 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 a 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 respondent shall not take any coercive steps against the petitioner pursuant to Ext.P1 assessment order till the disposal of Ext.P2 appeal. T.R.RAVI JUDGE SKP/24-01

Appendix — schedule of exhibits
APPENDIX OF WP(C) 2205/2023 PETITIONER’S EXHIBITS: EXHIBIT-P1 TRUE COPY OF THE ASSESSMENT ORDER AND DEMAND NOTICE FOR AY-2020-21 DATED 25-9-2022 PASSED BY THE 1ST RESPONDENT EXHIBIT-P2 TRUE COPY OF THE MEMORANDUM OF APPEAL FOR AY- 2020-21 DATED 23-10-2022 SUBMITTED BEFORE THE 2ND RESPONDENT EXHIBIT-P3 TRUE COPY OF THE STAY PETITION DATED 22-10-2022 SUBMITTED BEFORE THE 2ND RESPONDENT RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A. TO JUDGE

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