THE PUNNAYURKULAM SERVICE CO-OPERATIVE BANK LTD vs. THE INCOME TAX OFFICER

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WP(C)/38127/2022HC KeralaKLHC01082156202228 November 2022Author: HONOURABLE MR. JUSTICE SHAJI P.CHALY4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the merits of the appeal. Instead, it noted that the petitioner had already preferred an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals), which was pending. Consequently, the Court deemed it appropriate to dispose of the writ petition by directing the Commissioner of Income Tax (Appeals) to consider and pass appropriate orders on the appeal expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The issue of the validity of the assessment order and the deduction under Section 80P was therefore left undecided by the High Court in this writ petition.

What were the facts?

The petitioner, The Punnaurkulam Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, received an assessment order (Ext.P1). The Income Tax Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner appealed this assessment order (Ext.P3) 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 such cases and renders the assessment incorrect. This writ petition was filed challenging the assessment order and seeking a time-bound disposal of the pending appeal.

What were the issues?

1. Whether the assessment order rejecting the deduction under Section 80P is valid, considering the petitioner's status as a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act (Question of law and fact, concerning Section 80P of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that the assessment order was incorrect, relying on the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485, which they contended governs the present case. Revenue's Contention: The revenue, through the assessment order, rejected the deduction under Section 80P on the grounds that the petitioner failed to provide evidence of satisfying 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. MONDAY, THE 28TH DAY OF NOVEMBER 2022 / 7TH AGRAHAYANA, 1944 WP(C) NO. 38127 OF 2022 PETITIONER: THE PUNNAYURKULAM SERVICE CO-OPERATIVE BANK LTD NO. P 417 PUNNAYURKULAM P.O, THRISSUR-679561 REPRESENTED BY ITS SECRETARY , PIN - 679561 BY ADV C.A.JOJO RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 1 & TPS GURUVAYOOR, CITY PLAZA, WEST NADA, THRISSUR-680101, PIN - 680101 2 INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110001., PIN - 110001 3 THE COMMISSIONER OF INCOME TAX ( APPEALS) NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110001., PIN - 110001 OTHER PRESENT: ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.38127/2022 -2-

J U D G M E N T 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. 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 3rd 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 Income Tax Appellate Tribunal (3rd 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 3rd respondent to consider and pass appropriate orders on Ext.P3, 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 -3- initiated against the petitioner pursuant to Exts.P1. The writ petition is disposed of as above. GOPINATH P. JUDGE TR -4-

Appendix — schedule of exhibits
APPENDIX OF WP(C) 38127/2022 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2020-21 DATED 23.09.2022 ISSUED BY THE 2ND RESPONDENT Exhibit P2 A TRUE COPY OF THE DEMAND NOTICE FOR AN AMOUNT OF RS.11,95,083/- U/S 156 DATED 23.09.2022 ISSUED BY THE 2ND RESPONDENT Exhibit P3 A TRUE COPY OF THE APPEAL FOR AY 2021-22 BEFORE THE 3RD RESPONDENT DATED 21.10.2022 Exhibit P4 A TRUE COPY OF THE STAY PETITION FOR AY 2021-22 BEFORE THE 3RD RESPONDENT DATED 21.10.2022 Exhibit P5 A TRUE COPY OF THE JUDGMENT IN WP(C) NO.36879 OF 2022 DATED 22.11.2022

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