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

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WP(C)/38169/2022HC KeralaKLHC01082263202228 November 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 case. Instead, it disposed of the writ petition by issuing a direction to the 3rd respondent (Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on the pending appeal (Ext.P3) expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. The Court also ordered that no coercive steps shall be initiated against the petitioner pursuant to Ext.P1 until the disposal of the appeal. The primary issue regarding the validity of the assessment order and the applicability of the Mavilayi judgment was left to be decided by the appellate authority.

What were the facts?

The petitioner, Peechi Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, is challenging an assessment order (Ext.P1) issued by the Income Tax Officer. The deduction claimed by the petitioner under Section 80P was rejected on the grounds that it did not satisfy the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner had filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals), National Faceless Assessment Centre, which is pending. The petitioner argues that the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the field and renders the assessment incorrect. The High Court of Kerala, in a writ petition, directed the appellate authority to consider the appeal within a time-bound manner and stayed coercive steps until disposal.

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? Assessee's Contention: The assessee argues that the assessment order is incorrect because the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax (2021 (1) KLT 485) governs the field and supports its claim for deduction. The assessee contends that it satisfies the ingredients of a Primary Agricultural Credit Society. Revenue's Contention: The revenue, through the assessment order, rejected the deduction on the ground that the petitioner failed to provide evidence to show it satisfied the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act. No specific arguments from the revenue are recorded in the judgment regarding the Mavilayi judgment.

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. 38169 OF 2022 PETITIONER: PEECHI SERVICE CO-OPERATIVE BANK LTD NO. R 935 PATTIKAD P.O, THRISSUR-680652 REPRESENTED BY ITS SECRETARY-IN-CHARGE , PIN - 680652 BY ADVS. C.A.JOJO S.JIJI RESPONDENTS: 1 THE INCOME TAX OFFICER WARD2 (3), AYAKAR BHAVAN, SAKTHAN STAND, THRISSUR-680001 , PIN - 680001 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.38169/2022 -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) 38169/2022 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2020-21 DATED 23.09.2022 ISSUED BY THE 2ND RESPONDENT ExhibitP2 A TRUE COPY OF THE DEMAND NOTICE FOR AN AMOUNT OF RS.68,06,147/- 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 20.10.2022 Exhibit P4 A TRUE COPY OF THE STAY PETITION FOR AY 2021-22 BEFORE THE 3RD RESPONDENT DATED 20.10.2022 Exhibit P5 A TRUE COPY OF THE JUDGMENT IN WP(C) NO.36879 OF 2022 DATED 22.11.2022

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