THE POLPULLY SERVICE CO-OPERATIVE BANK LIMITED vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/21495/2022HC KeralaKLHC01044232202201 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 on the merits of the assessment order or the appeal. Instead, the Court deemed it fit to dispose of the writ petition by directing the Appellate Authority (the 1st respondent) to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P2) expeditiously. The Court also granted interim relief by ordering that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) and the demand notice (Ext.P3) until the disposal of the appeal. The core of the decision is procedural: to ensure the pending appeal is heard and decided in a time-bound manner, thereby providing an avenue for the petitioner to address their grievances regarding the assessment.

What were the facts?

The petitioner, The Polpully Service Co-operative Bank Limited, a Primary Agricultural Credit Society, challenged an assessment order dated 22.03.2016. The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria for a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act. The petitioner appealed this order to the Commissioner of Income Tax (Appeals). While the appeal was pending, the petitioner filed a writ petition before the High Court of Kerala, arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax now governs the field and renders the assessment incorrect. The High Court directed the Appellate Authority to consider the pending appeal expeditiously and ordered that no coercive steps be taken against the petitioner until the appeal is disposed of.

What were the issues?

1. Whether the assessment order dated 22.03.2016, which rejected the petitioner's claim for deduction under Section 80P on the grounds that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act, is legally sustainable? (Question of law and fact, concerning Section 80P of the Income Tax Act, 1961 and the Kerala Co-operative Societies Act, 1969). Assessee's Contention: The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485] governs the field and renders the assessment order incorrect. The petitioner relied on this Supreme Court decision. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the writ petition. The original assessment order was passed by the Income Tax Officer, Ward 2, Palakkad, and the appeal was filed before the Commissioner of Income Tax (Appeals).

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. 21495 OF 2022 PETITIONER/S: THE POLPULLY SERVICE CO-OPERATIVE BANK LIMITED NO. F 1198, POLPULLY, PALAKKAD DISTRICT PIN - 678522, 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. ADV. 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. 21495 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 22.03.2016. 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.P2 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.

WP(C) NO. 21495 OF 2022 3

4.

Accordingly, there will be a direction to the 1st 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 and Ext.P3 demand notice.

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

WP(C) NO. 21495 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 21495/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 22.03.2016 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2010-11. Exhibit P2 TRUE COPY OF THE APPEAL DATED 18.04.2016 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2010-11. Exhibit P3 TRUE COPY OF THE PROCEEDING DATED 9.6.2022 ISSUED BY THE 2ND RESPONDENT IN RELATION TO THE ASSESSMENT YEAR 206-17. Exhibit P4 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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