VELUR SERVICE CO-OPERATIVE BANK LTD NO.465 vs. THE INCOME TAX OFFICER

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WP(C)/37993/2022HC KeralaKLHC01081852202225 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 the merits of the case. Instead, it noted that the petitioner had already preferred an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) (3rd respondent), which was pending. Therefore, 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 pending appeal expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. The Court also directed that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The principle that can be cited is that when an appeal is pending before the appellate authority, the High Court may direct expeditious disposal of the appeal and grant interim protection.

What were the facts?

The petitioner, Velur Service Co-operative Bank Ltd. No. 465, a Primary Agricultural Credit Society, received an assessment order (Ext.P1) from the Income Tax Officer (1st respondent). The assessment order 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 challenged this assessment order before the Commissioner of Income Tax (Appeals) (3rd respondent), arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 now governed the matter and rendered the assessment incorrect. The petitioner had already filed an appeal (Ext.P3) which was pending.

What were the issues?

1. Whether the assessment order rejecting the claim for deduction under Section 80P on the ground of insufficient evidence regarding the petitioner's status as a Primary Agricultural Credit Society is correct, in light of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485? (Question of law and fact, turning on Section 80P of the Income Tax Act, 1961 and the Kerala Co-operative Societies Act, 1969). Assessee's contention: The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 governs the field and renders the assessment order incorrect. Revenue's contention: The judgment records no specific contention from the revenue regarding this issue at this stage.

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. FRIDAY, THE 25TH DAY OF NOVEMBER 2022 / 4TH AGRAHAYANA, 1944 WP(C) NO. 37993 OF 2022 PETITIONER: VELUR SERVICE CO-OPERATIVE BANK LTD NO.465 VELUR P.O, THRISSUR-680601 REPRESENTED BY ITS SECRETARY PIN - 680601 BY ADV C.A.JOJO RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-2(4), AYAKAR BHAVAN, NEAR SAKTHAN STAND, THRISSUR-68001 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 ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.37993 of 2022 2 JUDGMENT Dated this the 25th day of November, 2022 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 canvas 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 WPC No.37993 of 2022 3 appeal as Ext.P3 and the same is pending consideration before the Commissioner of Income Tax (Appeals) (3rd respondent), I deem it fit that this writ petition be disposed of directing the Commissioner of Income Tax (Appeals) 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 initiated against the petitioner pursuant to Ext.P1 assessment order. The writ petition is disposed of as above. GOPINATH P. JUDGE RMV

WPC No.37993 of 2022 4 APPENDIX OF WP(C) 37993/2022 PETITIONER EXHIBITS Exhibit P1 AOF THE ASSESSMENT ORDER FOR AY 2020-21 DATED 26.09.2022 ISSUED BY THE 2ND RESPONDENT. Exhibit P2 AOF THE DEMAND NOTICE U/S 156 DATED 26.2022 ISSUED BY THE 2ND RESPONDENT Exhibit P3 AOF THE APPEAL FOR AY 2021-22 BEFORE THE 3RD RESPONDENT DATED 22.10.2022 Exhibit P4 AOF THE STAY PETITION FOR AY 2021-22 BEFORE THE 3RD RESPONDENT DATED 22.10.2022 Exhibit P5 AOF THE JUDGMENT IN WP(C) NO.36879 OF 2022 DATED 25.10.2022 RESPONDENTS' EXHIBITS:NILP.A.TO JUDGE

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