KALLIAD SERVICE CO-OPERATIVE BANK LTD vs. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS

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WP(C)/37624/2022HC KeralaKLHC01081006202224 November 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that there was considerable merit in the petitioner's contention. The Court found that since the claim for deduction under Section 80P was decided based on a High Court Full Bench judgment that was subsequently reversed by the Supreme Court in Mavilayi Service Co-operative Bank Ltd v. CIT, the assessment order (Ext.P4) was liable to be set aside. The Court directed the Assessing Officer to pass fresh assessment orders after considering the Supreme Court's judgment and affording the petitioner a further opportunity of hearing. The operative direction was to quash Ext.P4 to enable reconsideration. No specific issue was left undecided.

What were the facts?

The petitioner, Kalliad Service Co-operative Bank Ltd, filed a writ petition before the High Court of Kerala challenging an order of assessment (Ext.P4). The petitioner's claim for deduction under Section 80P of the Income Tax Act, 1961, was decided by the Assessing Officer based on a Full Bench judgment of the High Court. However, this High Court judgment was subsequently reversed by the Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd v. CIT. The petitioner argued that the assessment order, relying on a now-overturned High Court precedent, was erroneous. The respondents are the Additional/Joint/Deputy/Assistant Commissioner of Income Tax and the Principal Commissioner of Income Tax.

What were the issues?

1. Whether the assessment order, which relied on a Full Bench judgment of the High Court that was subsequently reversed by the Supreme Court, is liable to be set aside, concerning the claim for deduction under Section 80P of the Income Tax Act, 1961? Assessee's Contentions: The petitioner contended that the assessment order was passed based on a High Court Full Bench judgment which has since been reversed by the Supreme Court in Mavilayi Service Co-operative Bank Ltd v. CIT. Therefore, the assessment order is flawed and requires reconsideration. Revenue's Contentions: The revenue's contentions are not explicitly recorded in the judgment. The judgment states that the learned counsel appearing for the respondent Department was heard.

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. THURSDAY, THE 24TH DAY OF NOVEMBER 2022 / 3RD AGRAHAYANA, 1944 WP(C) NO. 37624 OF 2022 PETITIONER: KALLIAD SERVICE CO-OPERATIVE BANK LTD, KALLIAD P.O., KANNUR – 670 593, REPRESENTED BY ITS SECRETARY SAJITHA KUMARI M. BY ADVS. S.ARUN RAJ C.T.SUJA ARJUN S.RAJ RESPONDENTS: 1 ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, ASSESSMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI – 110 003. 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, NORTH BLOCK, MANANCHIRA, KOZHIKODE – 673 001. BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 37624 OF 2022 2

JUDGMENT The petitioner has approached this Court being aggrieved by the fact that the claim of the petitioner for deduction under Section 80P of the Income Tax Act, 1961 has been decided on the basis of a full bench judgment of this Court, which has been reversed by the Supreme Court by the judgment reported as Mavilayi Service Co-operative Bank Ltd v. CIT [431 ITR 1 (SC)].

2.

Heard the learned counsel appearing for the respondent Department also.

3.

Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent Department and having perused Ext.P4 order of assessment, I am of the view that there is considerable merit in the contention taken by the learned counsel for the petitioner that since the claim of the petitioner for deduction under Section 80P of the Income Tax Act, 1961 has been decided on the basis of a full bench judgment of this Court, which has been reversed by the Supreme Court through the judgment referred to above, the assessment order is to be set aside and a direction is to be issued to the 1st respondent to pass fresh

WP(C) NO. 37624 OF 2022 3 orders of assessment after taking note of the judgment of the Supreme Court referred to above and also after affording to the petitioner a further opportunity of hearing. The fresh assessment order shall be passed without undue delay. To enable the re-consideration of the matter, as above, Ext.P4 order of assessment is quashed. The writ petition will stand disposed of as above. GOPINATH P. JUDGE DK

WP(C) NO. 37624 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 37624/2022 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE NOTICE DATED 21-02- 2022 UNDER SECTION 142(1) OF THE ACT ISSUED BY THE 1ST RESPONDENT FOR THE AY 2020-21 TO THE PETITIONER Exhibit P2 A TRUE COPY OF REPLY DATED 27-03-2022 E-FILED BY THE PETITIONER IN RESPONSE TO THE NOTICE U/S 142(1) DATED 21-02- 2022 ALONG WITH THE ACKNOWLEDGEMENT Exhibit P3 A TRUE COPY OF THE SHOW CAUSE NOTICE DATED 15-09-2022 ISSUED BY THE 1ST RESPONDENT FOR THE AY 2020-21 Exhibit P4 A TRUE COPY OF THE ASSESSMENT ORDER DATED 22-09-2022 UNDER SECTION 144 R.W.S. 144B OF THE ACT AND THE DEMAND NOTICE ISSUED BY THE 1ST RESPONDENT FOR THE AY 2020-21

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