THE KANNADI SERVICE CO-OPERATIVE BANK LIMITED NO. F 1572 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/21469/2022HC KeralaKLHC01044179202201 July 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 (Respondent 1) to consider and pass appropriate orders on the pending appeal (Ext.P3) expeditiously. The Court acknowledged that the appeal was already before the Appellate Authority. The reasoning for this disposal was that the appeal was pending, and therefore, the writ petition could be disposed of by directing the Appellate Authority to act promptly. No coercive steps were to be initiated against the petitioner pursuant to the assessment order and demand notices until the disposal of the appeal. The Court did not express any opinion on the validity of the assessment order or the applicability of the Supreme Court judgment.

What were the facts?

The petitioner, The Kannadi Service Co-operative Bank Limited, a Primary Agricultural Credit Society, received an assessment order dated 24.12.2019 from the Income Tax Officer (Respondent 2). The deduction claimed by the petitioner under Section 80P was rejected on the grounds that it did not satisfy the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner challenged this assessment order before the Commissioner of Income Tax (Appeals) (Respondent 1), arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the situation and renders the assessment incorrect. An appeal (Ext.P3) was already pending before the Appellate Authority.

What were the issues?

1. Whether the assessment order dated 24.12.2019, which rejected the petitioner's claim for deduction under Section 80P on the ground of not satisfying the ingredients of a Primary Agricultural Credit Society, is legally sustainable, considering the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485]? (Question of law and fact, concerning Section 80P of the Income Tax Act). Assessee's Contention: The petitioner argues that the assessment order is incorrect and 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, implying the deduction should have been allowed. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding this issue.

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 1ST DAY OF JULY 2022 / 10TH ASHADHA, 1944 WP(C) NO. 21469 OF 2022 PETITIONER/S: THE KANNADI SERVICE CO-OPERATIVE BANK LIMITED NO. F 1572,KANNADI. P.O. PALAKKAD DISTRICT PIN - 678701, REPRESENTED BY ITS SECRETARY. BY ADV O.D.SIVADAS RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), AYAKAR BHAVAN, SHAKTAN NAGAR, THRISSUR, PIN 680 001. 2 THE INCOME TAX OFFICER, WARD 2, AAYKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD, PIN 678 014. SRI. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 21469 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 24.12.2019. 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 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 appeal as Ext.P3 and the same is pending consideration before the 1st 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.

4.

Accordingly, there will be a direction to the 1st

WP(C) NO. 21469 OF 2022 3 respondent to consider and pass appropriate orders on Ext.P3 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 and Exts.P2 and P4 demand notices.

The writ petition is disposed of as above. GOPINATH P. JUDGE ajt

WP(C) NO. 21469 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 21469/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 24.12.2019 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2017-18. Exhibit P2 TRUE COPY OF THE NOTICE DATED 24.12.2019 ISSUED BY THE 2ND RESPONDENT OF UNDER SECTION 156 OF THE INCOME TAX ACT FOR ASSESSMENT YEAR 2017-18. Exhibit P3 TRUE COPY OF THE APPEAL DATED 24.01.2020 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2017-18. Exhibit P4 TRUE COPY OF THE PROCEEDING DATED 9.6.2022 ISSUED BY THE 2ND RESPONDENT IN RELATION TO THE ASSESSMENT YEAR 2017-18. Exhibit P5 TRUE COPY OF THE JUDGMENT DATED 6.09.2021 IN WP(C).NO. 18004 OF 2021 RENDERED BY THIS HON'BLE COURT.

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