THE VATTANATHARA SERVICE CO-OPERATIVE BANK LTD. vs. THE ADDITIONAL/JOINT/DEPUTY ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER

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WP(C)/37541/2022HC KeralaKLHC01080823202224 November 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 merits of the case. Instead, it directed the Appellate Authority (the 2nd respondent, National Faceless Appeal Centre) to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P2) expeditiously. The Court acknowledged that the appeal was already preferred against the assessment order (Ext.P1). As an interim measure, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order until the disposal of the appeal. The core of the decision is procedural, focusing on the timely resolution of the appeal rather than adjudicating the tax dispute itself.

What were the facts?

The petitioner, Vattanathra Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, received an assessment order dated September 19, 2022. 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 filed an appeal against this assessment order before the National Faceless Appeal Centre, Delhi. The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax now governs such cases and renders the assessment incorrect. The High Court of Kerala considered the pending appeal.

What were the issues?

1. Whether the assessment order dated September 19, 2022, 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 contended that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another [2021 (1) KLT 485] governs the field and that this judgment renders the assessment order incorrect. The petitioner argued that the assessment order failed to consider this binding precedent. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in response to the writ petition. However, the assessment order itself indicates the revenue's position 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. THURSDAY, THE 24TH DAY OF NOVEMBER 2022 / 3RD AGRAHAYANA, 1944 WP(C) NO. 37541 OF 2022 PETITIONER: THE VATTANATHRA SERVICE CO-OPERATIVE BANK LTD., NO: 499, V1/338, VATTANATHRAPOST, ALAGAPPA NAGAR, THRISSUR – 680 302, REPRESENTED BY ITS SECRETARY, MINI.K.R. BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENTS: 1 THE ADDITIONAL/JOINT/DEPUTY ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI – 110 001. 2 NATIONAL FACELESS APPEAL CENTRE, DELHI – 110 001, REPRESENTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 37541 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 19.09.2022. 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 2nd respondent, petitioner has sought to canvas that the judgment of the Supreme Court in Mavilayi Service Co- operative Bank Ltd. and others v. Commissioner of Income Tax and another [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.P2 and the same is pending consideration before the 2nd 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. 37541 OF 2022 3

4.

Accordingly, there will be a direction to the 2nd respondent to consider and pass appropriate orders on Ext.P2, 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. The writ petition is disposed of as above. GOPINATH P. JUDGE DK

WP(C) NO. 37541 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 37541/2022 PETITIONER EXHIBITS Exhibit P1 COPYOF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2020-21 DTD. 19- 09-2022 Exhibit P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 18-10-2022 Exhibit P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD,. 18-10-2022

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