THE KANNADI SERVICE CO-OPERATIVE BANK LTD vs. COMMISSIONER OF INCOME TAX

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WP(C)/21115/2022HC KeralaKLHC01043511202229 June 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 appeal. Instead, it disposed of the writ petition by directing the Appellate Authority (Commissioner of Income Tax, Appeals) to consider and pass appropriate orders on the pending appeal (Ext.P3) expeditiously. The Court also granted interim relief, stating that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) and demand notices (Exts.P2 and P4) until the disposal of the appeal. The primary focus was on ensuring a time-bound disposal of the appeal, rather than adjudicating the correctness of the assessment order or the applicability of the Supreme Court judgment at this stage. No specific issue was expressly left undecided by the High Court, as it deferred the decision to the appellate authority.

What were the facts?

The petitioner, The Kannadi Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. The Income Tax Officer (respondent 2) passed an assessment order on 24.12.2018, rejecting the petitioner's claim for deduction under Section 80P. The ground for rejection was the alleged lack of evidence that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as per the Kerala Co-operative Societies Act. The petitioner filed an appeal against this assessment order before the Commissioner of Income Tax (Appeals) (respondent 1). The petitioner argued that the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax now governs the field and renders the assessment incorrect. The appeal is pending before the appellate authority.

What were the issues?

1. Whether the assessment order dated 24.12.2018, which rejected the petitioner's claim for deduction under Section 80P on the ground of insufficient evidence regarding its status as a Primary Agricultural Credit Society, is legally sustainable? Assessee's Contention: The assessee contends 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 assessment is incorrect. The assessee relies on this Supreme Court decision. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in this writ petition. The assessment order itself rejected the deduction on the ground of lack of evidence.

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. WEDNESDAY, THE 29TH DAY OF JUNE 2022 / 8TH ASHADHA, 1944 WP(C) NO. 21115 OF 2022 PETITIONER/S: THE KANNADI SERVICE CO-OPERATIVE BANK LTD NO. F. 1572, KANNADI P.O, PALAKKAD DISTRICT, PIN - 678701, REPRESENTED BY ITS SECRETARY. BY ADV O.D.SIVADAS RESPONDENT/S: 1 COMMISSIONER OF INCOME TAX, (APPEALS), AYAKAR BHAVAN, SHAKTAN NAGAR, THRISSUR, PIN - 680001. 2 THE INCOME TAX OFFICER WARD 2, AAYKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD, PIN - 678014. SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 21115 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 24.12.2018. 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.

WP(C) NO. 21115 OF 2022 3

4.

Accordingly, there will be a direction to the 1st 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 demands.

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

WP(C) NO. 21115 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 21115/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 24.12.2018 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2016-17. Exhibit P2 TRUE COPY OF THE NOTICE DATED 24.12.2018 ISSUED BY THE 2ND RESPONDENT OF UNDER SECTION 156 OF THE INCOME TAX ACT FOR ASSESSMENT YEAR 2016-17. Exhibit P3 TRUE COPY OF THE APPEAL DATED 21.01.2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2016-17. Exhibit P4 TRUE COPY OF THE PROCEEDING DATED 09.06.2022 ISSUED BY THE 2ND RESPONDENT IN RELATION TO THE ASSESSMENT YEAR 2016-17. Exhibit P5 TRUE COPY OF THE JUDGMENT DATED 06.09.2021 IN WP(C) NO. 18004 OF 2021 RENDERED BY THIS HON'BLE COURT.

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