THE SOORANAD FARMERS SERVICE CO-OPERATIVE BANK LTD NO 1136 vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/25975/2022HC KeralaKLHC01054830202212 August 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the merits of the assessment order or the applicability of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. Instead, the Court deemed it fit to dispose of the writ petition by directing the 4th respondent, the Commissioner of Income Tax (Appeals), to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P2) expeditiously, within a period of 2 months from the date of receipt of a certified copy of the judgment. Furthermore, the Court 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 core principle established by this order is the court's power to direct expeditious disposal of appeals and grant interim protection pending such disposal, without delving into the substantive issues of the appeal itself.

What were the facts?

The petitioner, Sooranad Farmers Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. An assessment order dated November 27, 2019, was passed against the petitioner, rejecting its claim for deduction under Section 80P. The Assessing Officer's reasoning was that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as contemplated by the Kerala Co-operative Societies Act. The petitioner challenged this assessment order before the Commissioner of Income Tax (Appeals), the 4th 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 field and renders the assessment incorrect. The writ petition was filed seeking a direction for the expeditious disposal of the pending appeal.

What were the issues?

1. Whether the assessment order dated November 27, 2019, rejecting the petitioner's claim for deduction under Section 80P, is valid, considering the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485? Assessee's Contentions: The petitioner contended that the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 governs the present case and 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 this writ petition. The focus of the writ petition was on seeking a time-bound disposal of the appeal.

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 12TH DAY OF AUGUST 2022 / 21ST SRAVANA, 1944 WP(C) NO. 25975 OF 2022 PETITIONER: THE SOORANAD FARMERS SERVICE CO-OPERATIVE BANK LTD NO 1136 VAYANASALA JUNCTION, SOORANADU P.O, KOLLAM- REPRESENTED BY ITS SECRETARY THUSHANTH V , PIN - 690522 BY ADVS. K.P.PRADEEP HAREESH M.R. SANAND RAMAKRISHNAN T.T.BIJU T.THASMI M.J.ANOOPA SANU S MALAKEEL RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI-, REPRESENTED BY ITS CHAIRMAN , PIN - 11000 2 INCOME TAX OFFICER, WARD-4, KOLLAM, INCOME TAX DEPARTMENT, AAYAKAR BHAVAN INCOME TAX OFFICE, NEAR KARBALA JUNCTION, RAILWAY STATION ROAD, KOLLAM, PIN - 691001 3 ADDITIONAL COMMISSIONER OF INCOME TAX INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI , PIN - 110003 4 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI , PIN - 110003 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.25975/2022 -2-

J U D G M E N T 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 27-11-2019. 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 4th 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.P2 and the same is pending consideration before 4th respondent, I deem it fit that this writ petition be disposed of directing the 4th respondent to consider the appeal in a time bound manner.

4.

Accordingly, there will be a direction to the 4th respondent to consider and pass appropriate orders on Ext.P2, as expeditiously as possible within a period of 2 months from the date of receipt of a certified copy of a this judgment. .

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Exts.P1. The writ petition is disposed of as above. GOPINATH P. JUDGE AMG

W.P (C) No.25975/2022 -3-

Appendix — schedule of exhibits
APPENDIX OF WP(C) 25975/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE STATEMENT OF COMPUTATION OF INCOME NO ITBA/AST/S/215/2019-20/102118475(1) DATED 27-11- 2019 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P2 TRUE COPY OF THE APPEAL DATED 16-03-2020 FILED FOR THE YEAR 2017-18 BEFORE THE 4THRESPONDENT BY THE PETITIONER Exhibit P3 TRUE COPY OF THE DEMAND NOTICE ITBA/AST/S/156/2019- 20/1021184741(1) DATED 27-11-2019 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 23-02-2022 IN WPC NO 6109 OF 2022

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