POOVACHAL RURAL HOUSING CO-OPERATIVE SOCIETY LTD. vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/32634/2022HC KeralaKLHC01069311202214 October 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the first respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the petitioner's appeal (Ext.P3) after affording an opportunity of hearing. The Court further directed that any demand arising from the rectification order (Ext.P1) and the demand notice (Ext.P2) shall be kept in abeyance until orders are passed on the appeal. The Court did not decide the merits of the Section 80P claim but ensured that coercive steps would be withheld pending the statutory appeal's disposal. The principle is that statutory appeals should be decided expeditiously, and coercive recovery should be stayed during the pendency of such appeals, especially when a favorable precedent is cited.

What were the facts?

The petitioner, Poovachal Rural Housing Co-operative Society Ltd., is aggrieved by an order of rectification of assessment for the assessment year 2015-16 and a subsequent demand notice. The petitioner had filed an appeal against these orders along with an application for stay. The petitioner claims exemption under Section 80P of the Income Tax Act. The petitioner relies on the Supreme Court decision in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another, 2021 (1) KHC 303 (SC), which they contend covers the issue in their favour. The High Court considered the facts and the pendency of similar matters.

What were the issues?

1. Whether the petitioner is entitled to exemption under Section 80P of the Income Tax Act for the assessment year 2015-16? Assessee's Contention: The petitioner argues that the issue of exemption under Section 80P is covered in their favor by the Supreme Court decision in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another, 2021 (1) KHC 303 (SC). Revenue's Contention: The judgment does not record any specific contention from the revenue regarding this issue. However, the revenue issued the rectification order and demand notice, implying disagreement with the assessee's claim for exemption.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 14TH DAY OF OCTOBER 2022 / 22ND ASWINA, 1944 WP(C) NO. 32634 OF 2022 PETITIONER: 1 POOVACHAL RURAL HOUSING CO-OPERATIVE SOCIETY LTD. NO.T 355, POOVACHAL P.O., THIRUVANANTHAPURAM DISTRICT, PIN - 695 575, REPRESENTED BY ITS SECRETARY, PADMAKUMAR M.A.,AGED 53 YEARS, S/O.APPUKUTTAN NAIR, RESIDING AT 'PUNYAM', MINI NAGAR, KATTAKKODE P.O., THIRUVANANTHAPURAM DISTRICT, PIN - 695575 BY ADV BABU S. NAIR RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), NEW DELHI, PIN - 110002 2 THE JOINT COMMISSIONER OF INCOME TAX NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI, PIN - 110002 ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT Dated this the 14th day of October, 2022 Aggrieved by Ext.P1 order of rectifying the assessment for the year 2015-16 and Ext.P2 demand notice, the petitioner filed Ext.P3 appeal along with Ext.P4 application for stay. The petitioner claims exemption under Section 80P of the Income Tax Act. It is submitted that the issue is covered in favour of the petitioner by Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another; 2021 (1) KHC 303 (SC).

2.

Having regard to the above facts and considering the fact that similar matters have been disposed of by this court directing any coercive steps to be kept in abeyance till a decision is taken on statutory appeals, this writ petition is disposed of directing the 1st respondent to consider and pass orders on Ext.P3 appeal after affording an opportunity of hearing to the petitioner. It is directed that any demand pursuant to Exts.P1 and P2 shall be kept in abeyance till orders as passed on Ext.P3 appeal. GOPINATH P. JUDGE SKP/14-10

Appendix — schedule of exhibits
APPENDIX OF WP(C) 32634/2022 PETITIONER'S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT DATED, 21-3-2022 EXHIBIT P2 A TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE 2ND RESPONDENT DATED, 21-3-2022 EXHIBIT P3 TRUE COPY OF THE APPEAL SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED, 24- 9-2022 EXHIBIT P4 A TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT DATED, 24-9-2022 EXHIBIT P5 A TRUE COPY OF THE ACKNOWLEDGMENT ISSUED BY THE FIRST RESPONDENT DATED, 24-9-2022 RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A.TO JUDGE

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