VALLACHIRA SERVICE CO-OPERATIVE SOCIETY LTD.NO.527 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/37758/2022HC KeralaKLHC01081315202225 November 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while acknowledging the pendency of the petitioner's appeal (Ext.P3) before the Income Tax Appellate Tribunal (1st respondent), deemed it appropriate to dispose of the writ petition by directing the Tribunal to consider the appeal. The Court directed the 1st respondent (Income Tax Appellate Tribunal) to consider and pass appropriate orders on Ext.P3 appeal expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered 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 Section 80P deduction claim itself, but rather focused on expediting the appellate process.

What were the facts?

The petitioner, Vallachira Service Co-operative Society Ltd. No. 527, a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969, received an assessment order (Ext.P1). The assessment order rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner satisfied the criteria for a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner challenged this assessment order before the Commissioner of Income Tax (Appeals) (1st respondent). The petitioner argued that the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 now governs the field and renders the assessment incorrect. The petitioner had already preferred an appeal (Ext.P3) which was pending before the Income Tax Appellate Tribunal (1st respondent). This writ petition was filed seeking a direction for the Tribunal to consider the appeal.

What were the issues?

1. Whether the assessment order rejecting the petitioner's claim for deduction under Section 80P is incorrect in light of the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485. (Question of law) Assessee's contentions: The assessee contended that the assessment order was incorrect because the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 now governs the field, implying that their claim for deduction under Section 80P should have been allowed. Revenue's contentions: The judgment does not record any specific contentions made by the revenue in this writ petition. However, the assessment order itself rejected the deduction under Section 80P on the ground that the petitioner did not 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 GOPINATH P. FRIDAY, THE 25TH DAY OF NOVEMBER 2022 / 4TH AGRAHAYANA, 1944 WP(C) NO. 37758 OF 2022 PETITIONER: VALLACHIRA SERVICE CO-OPERATIVE SOCIETY LTD.NO.527 VALLACHIRA.P.O, THRISSUR 680562 REPRESENTED BY ITS SECRETARY. , PIN - 680562 BY ADV P.C.SASIDHARAN RESPONDENTS: 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 WARD 1 & TPS, CITY PLAZA, INCOME TAX OFFICE, WEST NADA, GURUVAYOOR, KERALA - 680 101., PIN - 680101 BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA ADV. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P. (C) No. 37758 of 2022 ..2.. JUDGMENT Dated this the 25th day of November, 2022 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 W.P. (C) No. 37758 of 2022 ..3.. appeal as Ext.P3 and the same is pending consideration before the Income Tax Appellate Tribunal (1st respondent), I deem it fit that this writ petition be disposed of directing the Tribunal 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 appeal, 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

W.P. (C) No. 37758 of 2022 ..4.. APPENDIX OF WP(C) 37758/2022 PETITIONER EXHIBITS Exhibit P1 EXHIBIT P1:- THEOF THE ASSESSMENT ORDER DURING THE ASSESSMENT YEAR 2020-2021 DATED 22/09/2022 Exhibit P2 EXHIBIT P2:- THEOF THE DEMAND NOTICE DATED 22/09/2022 Exhibit P3 EXHIBIT P3:- THEOF THE APPEAL DATED 20/10/2022 Exhibit P4 EXHIHBIT P4:- THEOF THE ACKNOWLEDGEMENT RECEIPT OF INCOME TAX FORMS SHOWING THE FILING OF THE APPEAL ON 20/10/2022 Exhibit P5 EXHIBIT P5:- THEOF THE STAY PETITION DATED 19/10/2022 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT Exhibit P6 EXHIBIT P6:- THEOF THE JUDGMENT IN W.A.NO.1536 OF 2019 DATED 1/7/2019 Exhibit P7 EXHIBIT P7:- THEOF THE JUDGMENT IN W.P(C) NO.14282/2021 DATED 19/7/2021 Exhibit P8 EXHIBIT P8:- THEOF THE JUDGMENT IN W.P(C) NO. 34067/2022 DATED 27/10/2022 RESPONDENTS' EXHIBITS:NILP.A.TO JUDGE

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