THIROOR SERVICE CO-OPERATIVE BANK LTD NO. 4140 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/1105/2023HC KeralaKLHC01002662202313 January 2023Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the merits of the case. Instead, it disposed of the writ petition by directing the 1st respondent, the Commissioner of Income Tax (Appeals), to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P3) expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. The Court also ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The principle that can be cited from this judgment is the High Court's power to direct expeditious disposal of pending appeals and to grant interim protection against coercive steps.

What were the facts?

The petitioner, Thiroor Service Co-operative Bank Ltd. No. 4140, a Primary Agricultural Credit Society, is challenging an assessment order (Ext.P1) issued by the Income Tax Officer (3rd respondent). The assessment order 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, 1969. The petitioner had filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) (1st respondent), arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 now governs the issue and renders the assessment incorrect. The writ petition was filed before the High Court of Kerala.

What were the issues?

1. Whether the assessment order rejecting the deduction under Section 80P of the Income Tax Act, 1961, is legally sustainable, considering the petitioner's status as a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act, 1969. Assessee's contentions: The petitioner argues that the assessment order is incorrect because the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 governs the field and supports their claim for deduction. They contend that they satisfy the ingredients of a Primary Agricultural Credit Society. Revenue's contentions: The judgment does not record any specific contentions made by the revenue before the High Court in this writ petition. However, the assessment order itself indicates the revenue's stance that there was no evidence to show the petitioner satisfied 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 GOPINATH P. FRIDAY, THE 13TH DAY OF JANUARY 2023 / 23RD POUSHA, 1944 WP(C) NO. 1105 OF 2023 PETITIONER: THIROOR SERVICE CO-OPERATIVE BANK LTD NO. 4140 THIROOR, MULANKUNNATHUKAVU P.O., THRISSUR REPRESENTED BY ITS SECRETARY, PIN - 680581 BY ADV P.C.SASIDHARAN RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, ROOM NO. 356, CR BUILDING, IP ESTATE, DELHI, PIN - 110002 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX O/O THE PRINCIPAL COMMISSIONER OF INCOME TAX, AYAKAR BHAVAN, MANANCHIRA, KOZHIKODE, PIN - 673001 3 THE INCOME TAX OFFICER WARD NO 2(1), AAYANKAR BHAVAN, INCOME TAX OFFICE, SHAKTHAN THAMPURAN NAGAR, THRISSUR , PIN - 680001 BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.01.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P. (C) No. 1105 of 2023 ..2..

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 was rejected on the ground that there was no evidence to show that 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 1st respondent, petitioner has sought to canvass that the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 now governs the field thereby rendering the assessment itself as incorrect.

3.

Since the petitioner has already preferred an ..3.. appeal as Ext.P3 and the same is pending consideration before the Commissioner of Income Tax Appeals (1st respondent), I deem it fit that this writ petition be disposed of directing the 1st respondent to consider the appeal in a time bound manner.

4.

Accordingly, there will be a direction to the 1st 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 assessment order. The writ petition is disposed of as above. GOPINATH P. JUDGE RMV ..4..

Appendix — schedule of exhibits
APPENDIX OF WP(C) 1105/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DURING THE ASSESSMENT YEAR 2020-21 Exhibit P2 TRUE COPY OF THE DEMAND NOTICE DATED 26.09.2022 Exhibit P3 TRUE COPY OF THE APPEAL DATED 20.10.2022 Exhibit P4 TRUE COPY OF THE ACKNOWELDGMENT RECEIPT OF INCOME TAX FORMS SHOWING THE FILING OF APPEAL ON 20.10.2022 Exhibit P5 TRUE COPY OF THE STAY PETITION DATED 20.10.2022 Exhibit P6 TRUE COPY OF THE ORDER ISSUED BY THE THIRD RESPONDENT DATED 03.11.2022 Exhibit P7 TRUE COPY OF THE STAY PETITION DATED 08.11.2022 Exhibit P8 TRUE COPY OF THE JUDGMENT IN WPC NO. 26935/2021 DATED 30.11.2021 Exhibit P9 TRUE COPY OF THE JUDGMENT IN WA NO. 1536/2019 DATED 01.07.2019 OF THIS HONOURABLE COURT Exhibit P10 TRUE COPY OF THE JUDGMENT IN WPC NO. 14282/2021 DATED 19.07.2021 OF THIS HONOURABLE COURT Exhibit P11 TRUE COPY OF THE JUDGMENT DATED 27.10.2022 IN WPC NO. 34067/2022 OF THIS HONOURABLE COURT RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A.TO JUDGE

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