ANNAKARA SERVICE CO-OPERATIVE SOCIETY LTD NO. F 549 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/39277/2022HC KeralaKLHC01085046202206 December 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the substantive issues of the appeal. 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. The Court also ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) and demand notice (Ext.P2) until the disposal of the appeal. The principle derived from this judgment is that when an appeal is pending before the appellate authority, a writ petition seeking to quash an assessment order can be disposed of by directing a time-bound disposal of the appeal, with a stay on coercive recovery measures.

What were the facts?

The petitioner, Annakara Service Co-operative Society Ltd. No. F 549, a Primary Agricultural Credit Society, received an assessment order (Ext.P1) dated August 30, 2022, for assessment year 2020-21. The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner appealed this order (Ext.P3) to the Commissioner of Income Tax (Appeals), the 1st respondent, arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax rendered the assessment incorrect. The High Court of Kerala, considering the pending appeal, directed the Appellate Authority to decide the appeal expeditiously and restrained coercive steps until disposal.

What were the issues?

1. Whether the assessment order dated August 30, 2022, rejecting the deduction under Section 80P for assessment year 2020-21, is legally sustainable, considering the petitioner's status as a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act. 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 governs the field and supports its claim for deduction. The petitioner contends that it satisfies the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in this writ petition. The revenue's position was presumably presented in the assessment order.

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. TUESDAY, THE 6TH DAY OF DECEMBER 2022 / 15TH AGRAHAYANA, 1944 WP(C) NO. 39277 OF 2022 PETITIONER/S: ANNAKARA SERVICE CO-OPERATIVE SOCIETY LTD NO. F 549 PERUVALLUR, THRISSUR 680 508 REPRESENTED BY ITS SECRETARY , PIN - 680508 BY ADV P.C.SASIDHARAN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, ROOM NO. 356, C.R. BUILDING, IP ESTATE, DELHI- 110002., PIN - 110002 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX O/O THE PRINCIPAL COMMISSIONER OF INCOME TAX, AYAKAR BHAVAN, MANANCHIRA, KOZHIKODE, KERALA - 673001. , PIN - 673001 3 THE INCOME TAX OFFICER (TDS) OFFICE OF THE INCOME TAX OFFICER (TDS), AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSUR - 680 001., PIN - 680001 BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 39277 OF 2022 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 on 30.08.2022 for the assessment year 2020-21. 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 appeal as Ext.P3 and the same is pending consideration before the 1st respondent, I deem it fit that this writ petition be disposed of directing the Appellate Authority to consider the appeal in a time bound manner.

WP(C) NO. 39277 OF 2022 3

4.

Accordingly, there will be a direction to the 1st respondent to consider and pass appropriate orders on Ext.P3 appeal as expeditiously as possible.

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P1 assessment order and Ext.P2 demand notice.

The writ petition is disposed of as above. GOPINATH P. JUDGE ajt

WP(C) NO. 39277 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 39277/2022 PETITIONER EXHIBITS Exhibit P1 THE TRUE COPY OF THE ASSESSMENT ORDER DURING THE ASSESSMENT YEAR 2020-2021 DATED 30/08/2022 Exhibit P2 THE TRUE COPY OF THE DEMAND NOTICE DATED 30/08/2022 Exhibit P3 THE TRUE COPY OF THE APPEAL DATED 30/09/2022 Exhibit P4 THE TRUE COPY OF THE ACKNOWLEDGEMENT RECEIPT OF INCOME TAX FORMS SHOWING THE FILING OF THE APPEAL ON 30/09/2022 Exhibit P5 THE TRUE COPY OF THE STAY PETITION DATED 29/09/2022 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT Exhibit P6 THE TRUE COPY OF THE JUDGMENT IN W.A.NO.1536 OF 2019 DATED 1/7/2019 Exhibit P7 THE TRUE COPY OF THE JUDGMENT IN W.P(C) NO.14282/2021 DATED 19/7/2021 Exhibit P8 THE TRUE COPY OF THE JUDGMENT IN W.P(C) NO. 34067/2022 DATED 27/10/2022

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