THE KODAKARA FARMERS SERVICE CO-OPERATIVE BANK LTD. vs. THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER

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WP(C)/39106/2022HC KeralaKLHC01084580202206 December 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 (2nd respondent) to consider and pass appropriate orders on the petitioner's appeal (Ext.P2) expeditiously. The Court emphasized that the appellate authority needs to consider the appeal on merits only if it decides to condone the delay of 26 days in filing the appeal. Until the disposal of the appeal, no coercive steps are to be initiated against the petitioner pursuant to the assessment order (Ext.P1). The judgment does not provide a finding on the validity of the Section 80P deduction or the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment.

What were the facts?

The petitioner, The Kodakara Farmers Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. For assessment year 2020-21, the petitioner received an assessment order (Ext.P1) wherein its claim for deduction under Section 80P was rejected. The rejection was based on the ground that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner filed an appeal (Ext.P2) before the appellate authority (2nd respondent) along with an application for condonation of delay of 26 days in filing the appeal (Ext.P3). The petitioner argued that the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another governs the field and renders the assessment incorrect.

What were the issues?

1. Whether the petitioner's claim for deduction under Section 80P of the Income Tax Act, 1961, is valid, considering the rejection by the Assessing Officer on the grounds of not satisfying the ingredients of a Primary Agricultural Credit Society as per the Kerala Co-operative Societies Act. (Question of law and fact, concerning Section 80P of the Income Tax Act, 1961). Assessee's Contentions: The petitioner argued that the assessment order is incorrect, relying on the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another, which they contend governs the present case. Revenue's Contentions: The judgment does not record any specific contentions from the revenue regarding the issues raised by the petitioner.

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. TUESDAY, THE 6TH DAY OF DECEMBER 2022 / 15TH AGRAHAYANA, 1944 WP(C) NO. 39106 OF 2022 PETITIONER: THE KODAKARA FARMERS SERVICE CO-OPERATIVE BANK LTD. R761, XI/535, KODAKARA P.O., MUKUNDAPURAM, THRISSUR – 680 684, REPRESENTED BY ITS MANAGING DIRECTOR, BIJU M.V. BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENTS: 1 THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, DELHI – 110 001. 2 NATIONAL FACELESS APPEAL CENTRE, DELHI – 110 001, REPRESENTED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 3 THE INCOME TAX OFFICER, WARD 1 & TPS, AAYAKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD – 678 014. ADV. JOSE JOSEPH - SC, IT DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 39106 OF 2022 2

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. The petitioner sufferred Ext.P1 order of assessment under the provisions of the Income Tax Act, 1961 for the assessment year 2020-21. The petitioner has filed Ext.P2 appeal along with Ext.P3 applciation for condonation of delay of 26 days in filing the appeal.

2.

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.

3.

While assailing the assessment order before the 1st respondent, petitioner has sought to canvas that the judgment of the Supreme Court in Mavilayi Service Co- operative Bank Ltd. and others v. Commissioner of Income Tax and another [2021 (1) KLT 485] now governs the field thereby rendering the assessment itself as incorrect.

4.

Since the petitioner has already preferred an appeal as Ext.P2 and the same is pending consideration before the 2nd respondent, I deem it fit that this writ petition be disposed of WP(C) NO. 39106 OF 2022 3 directing the Appellate Authority to consider the appeal in a time bound manner.

5.

Accordingly, there will be a direction to the 2nd respondent to consider and pass appropriate orders on Ext.P2, as expeditiously as possible.

6.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P1 assessment order. It is made clear that the appellate authority needs to consider the appeal on merits only if it decides to condone the delay of 26 days in filing the appeal. The writ petition is disposed of as above. GOPINATH P. JUDGE DK

WP(C) NO. 39106 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 39106/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2020-21 DTD. 28-09-2022 Exhibit P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 23-11- 2022 Exhibit P3 COPY OF DELAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 23-11-2022 Exhibit P4 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 23-11-2022

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