OORUTTAMBALAM SERVICE CO-OPERATIVE BANK LTD vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/2039/2023HC KeralaKLHC01005016202323 January 2023Author: HONOURABLE MR. JUSTICE T.R.RAVI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala disposed of the writ petition by issuing a direction to the Appellate Authority (3rd respondent) to consider and pass orders on the petitioner's appeal (Ext.P2) in a time-bound manner. The Court noted that the petitioner had already preferred an appeal against the assessment order. The Court also directed that no coercive steps shall be initiated against the petitioner pursuant to Ext.P1 assessment order until the disposal of the appeal. The Court did not decide on the merits of the deduction claim under Section 80P or the validity of the assessment order itself, as the primary relief granted was to expedite the appellate process. The ratio decidendi is that when an appeal is pending, and a relevant Supreme Court judgment exists, the appellate authority should be directed to decide the appeal expeditiously, and coercive steps should be stayed.

What were the facts?

The petitioner, Ooruttambalam Service Co-operative Bank Ltd., a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969, is challenging an assessment order (Ext.P1). The Assessing Officer rejected the petitioner's claim for deduction under Section 80P of the Income Tax Act, 1961. The reason cited was the lack of evidence demonstrating that the petitioner met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner has filed an appeal (Ext.P2) against this assessment order. The petitioner contends that the assessment order was passed without considering the impact of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485.

What were the issues?

1. Whether the assessment order rejecting the claim for deduction under Section 80P of the Income Tax Act, 1961, was valid, considering the petitioner's status as a Primary Agricultural Credit Society. Assessee's Contentions: The petitioner argues that the assessment order was issued without considering the binding judgment of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485. They implicitly contend that this judgment supports their claim for deduction under Section 80P. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in response to the writ petition. The assessment order itself rejected the deduction on the ground that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act.

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 23RD DAY OF JANUARY 2023 / 3RD MAGHA, 1944 WP(C) NO. 2039 OF 2023 PETITIONER: 1 OORUTTAMBALAM SERVICE CO-OPERATIVE BANK LTD NO T-916, OORUTTAMBALAM P.O THIRUVANANTHAPURAM, PIN - 695507 REPRESENTED BY ITS SECRETARY SYAMJI S L BY ADVS. K.P.PRADEEP SANAND RAMAKRISHNAN HAREESH M.R. T.T.BIJU T.THASMI M.J.ANOOPA SANU S MALAKEEL RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI, PIN - 110001 REPRESENTED BY ITS CHAIRMAN 2 ASSESSMENT UNIT INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN - 110003 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN - 110003 SRI. CHRISTOPHER ABRAHAM, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.2039 of 2023 2 T.R.RAVI, J. -------------------------------------------- W.P.(C.) No.2039 of 2023 --------------------------------------------- Dated this the 23rd day of January, 2023

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative 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 of the Income Tax Act 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. The petitioner has preferred Ext.P2 appeal.

2.

The petitioner 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 and submits that the assessment order has been issued without considering the effect of the judgment. Since the petitioner has already preferred an appeal, interest of justice will be met if a direction is issued to the Appellate Authority to consider and pass orders on Ext.P2 appeal in a time bound manner. The writ petition is hence disposed of with a direction to the 3rd respondent to consider and pass orders on Ext.P2 appeal as expeditiously as possible. No coercive steps shall be initiated against the petitioner pursuant to Ext.P1 assessment order till the disposal of the appeal. T.R.RAVI JUDGE SKP/23-01

Appendix — schedule of exhibits
APPENDIX OF WP(C) 2039/2023 PETITIONER’S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/143(3)/2022-23/1048180718(1) DATED 22-12-2022 ISSUED FOR THE YEAR 2021-22 BY THE 2NDRESPONDENT TO THE PETITIONER EXHIBIT P2 TRUE COPY OF THE APPEAL DATED 27-12-2022 FILED FOR THE YEAR 2021-22 BEFORE THE3RDRESPONDENT BY THE PETITIONER EXHIBIT P3 TRUE COPY OF THE DEMAND NOTICE NO. ITBA/AST/S/156/2022-23/1048180834(1) DATED 22- 12-2022 ISSUED FOR THE YEAR 2021-22 BY THE 2ND RESPONDENT EXHIBIT P4 TRUE COPY OF THE JUDGMENT DATED 23-02-2022 IN WPC NO 6109 OF 2022 RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A. TO JUDGE

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