THE NADATHARA FARMERS SERVICE CO-OPERATIVE BANK LTD. NO.3499 vs. THE INCOME TAX OFFICER

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WP(C)/38278/2022HC KeralaKLHC01082479202229 November 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while hearing the writ petition, noted that the petitioner had already filed an appeal (Ext.P4) against the assessment order (Ext.P2) before the Income Tax Appellate Tribunal, and this appeal was pending consideration. The Court did not decide on the merits of the petitioner's claim regarding Section 80P or the applicability of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. Instead, the Court deemed it fit to dispose of the writ petition by directing the Income Tax Appellate Tribunal (referred to as the 2nd respondent) to consider and pass appropriate orders on the pending appeal expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. Furthermore, the Court directed that no coercive steps shall be initiated against the petitioner pursuant to the assessment order until the disposal of the appeal. The primary finding is procedural: to expedite the resolution of the appeal.

What were the facts?

The petitioner, The Nadathara Farmers Service Co-operative Bank Ltd. No. 3499, a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969, is challenging an assessment order (Ext.P2). The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner appealed this order (Ext.P4) before the Commissioner of Income Tax (Appeals), arguing 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 and renders the assessment incorrect. This writ petition was filed as the appeal was pending before the Income Tax Appellate Tribunal (referred to as the 2nd respondent in the petition, though the judgment clarifies it's the Tribunal).

What were the issues?

1. Whether the assessment order, which rejected the deduction under Section 80P on the ground of insufficient evidence regarding the petitioner's status as a Primary Agricultural Credit Society, is valid in light of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485. Assessee's Contention: The petitioner argues 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 and renders the assessment order incorrect. The petitioner has already preferred an appeal (Ext.P4) before the Income Tax Appellate Tribunal. Revenue's Contention: The judgment does not record any specific contentions from the revenue in this writ petition. The assessment order itself rejected the deduction under Section 80P on the ground that the petitioner did not satisfy 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. TUESDAY, THE 29TH DAY OF NOVEMBER 2022 / 8TH AGRAHAYANA, 1944 WP(C) NO. 38278 OF 2022 PETITIONER: THE NADATHARA FARMERS SERVICE CO-OPERATIVE BANK LTD. NO.3499 AGED 54 YEARS NADATHARA P.O., THRISSUR DISTRICT, REPRESENTED BY ITS MANAGING DIRECTOR-IN-CHARGE., PIN - 680751 BY ADVS. M.SASINDRAN SREEHARI INDUKALADHARAN RESPONDENTS: 1 THE INCOME TAX OFFICER AAYAKAR BHAVAN, MUNICIPAL OFFICE ROAD THRISSUR, KERALA, PIN - 680001 2 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEALS CENTRE (NFAC) NEW DELHI., PIN - 110001 BY ADV JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P. (C) No. 38278 of 2022 ..2.. JUDGMENT Dated this the 29th day of November, 2022 Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Ext.P2 order of assessment was issued against the petitioner. 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 2nd 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 W.P. (C) No. 38278 of 2022 ..3.. appeal as Ext.P4 and the same is pending consideration before the Income Tax Appellate Tribunal (2nd respondent), I deem it fit that this writ petition be disposed of directing the Tribunal to consider the appeal in a time bound manner. 4. Accordingly, there will be a direction to the 2nd respondent to consider and pass appropriate orders on Ext.P4 appeal, as expeditiously as possible within a period of 2 months from the date of receipt of a copy

of this judgment.

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P2 order of assessment. The writ petition is disposed of as above. GOPINATH P. JUDGE RMV

W.P. (C) No. 38278 of 2022 ..4.. APPENDIX OF WP(C) 38278/2022 PETITIONER EXHIBITS Exhibit P1 AOF THE CERTIFICATE OF REGISTRATION DATED 30-12-2016 ISSUED BY THE DEPUTY REGISTRAR OF CO- OPERATIVE SOCIETIES, THRISSUR Exhibit P2 AOF THE ASSESSMENT ORDER FOR THE YEAR 2020-2021 DATED 23.09.2022 Exhibit P3 AOF THE DEMAND NOTICE NO.ITBA/AST/S/156/2022-23/1045879350(1) DATED 23.09.2022 Exhibit P4 AOF THE APPEAL MEMORANDUM FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 21.10.2022 Exhibit P4(a) AOF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT DATED 21.10.2022 Exhibit P5 AOF THE JUDGMENT DATED 19.07.2019 IN W.A.NO.1639/2019 RESPONDENTS' EXHIBITS:NILP.A.TO JUDGE

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