THE SOORANAD FARMERS SERVICE CO-OPERATIVE BANK LTD NO 1136 vs. 1. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/25954/2022HC KeralaKLHC01054791202212 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 or the appeal. Instead, the Court deemed it fit to dispose of the writ petition by directing the 3rd respondent, the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, Delhi, to consider and pass appropriate orders on the petitioner's appeal (Ext.P2) expeditiously. The Court mandated that the appeal be disposed of 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 is the need for timely adjudication of appeals pending before appellate authorities, especially when a relevant Supreme Court judgment is cited as governing the field.

What were the facts?

The petitioner, The Sooranad Farmers Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. The Assessing Officer issued an assessment order on April 23, 2021, rejecting the petitioner's claim for deduction under Section 80P. The reason for rejection was the alleged lack of evidence demonstrating that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner challenged this assessment order by filing an appeal before the Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre, Delhi. The petitioner contended that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 governed the matter and rendered the assessment incorrect. The writ petition was filed seeking a direction for the timely disposal of this pending appeal.

What were the issues?

1. Whether the assessment order dated April 23, 2021, rejecting the petitioner's claim for deduction under Section 80P, is legally sustainable, considering the petitioner's status as a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Assessee's Contentions: The petitioner argued that the assessment order was incorrect and that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 governs the present case, implying that the deduction under Section 80P should have been allowed. Revenue's Contentions: The judgment does not record any specific contentions from the revenue in response to the writ petition. The assessment order itself stated that there was no evidence to show that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act.

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. 25954 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 - 110001 2 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 3 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.25954/2022 -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 23-04-2021. 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 3rd 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 3rd respondent, I deem it fit that this writ petition be disposed of directing the 3rd respondent to consider the appeal in a time bound manner.

4.

Accordingly, there will be a direction to the 3rd 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.25954/2022 -3-

Appendix — schedule of exhibits
APPENDIX OF WP(C) 25954/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/144/2021-22/1032624506(1) DATED 23-04-2021 ISSUED FOR THE YEAR 2018-19 BY THE 2NDRESPONDENT TO THE PETITIONER Exhibit P2 TRUE COPY OF THE APPEAL DATED 30-08-2021 FILED FOR THE YEAR 2018-19 BEFORE THE 3RD RESPONDENT BY THE PETITIONER Exhibit P3 TRUE COPY OF THE DEMAND NOTICE ITBA/AST/S/156/2021- 22/1032624514(1) DATED 23-04-2021 ISSUED FOR THE YEAR 2018-19BY THE 2ND RESPONDENT Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 23-02-2022 IN WPC NO 6109 OF 2022

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