THE CHAVAKKAD SERVICE CO-OPERATIVE BANK LTD.NO.F.9991 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/36542/2022HC KeralaKLHC01078441202217 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 disposed of the writ petition by directing the Income Tax Appellate Tribunal (1st respondent) to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P3) expeditiously, within a period of 2 months from the date of receipt 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 primary finding of the Court was procedural: the appeal pending before the Tribunal should be decided promptly. The substantive issues regarding the Section 80P deduction and the applicability of the Supreme Court judgment were left for the Tribunal to decide.

What were the facts?

The petitioner, The Chavakkad Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, filed a writ petition challenging an assessment order (Ext.P1). The assessment order rejected the petitioner's claim for deduction under Section 80P of the Income Tax Act, 1961. The reason for rejection was the absence of evidence demonstrating that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act, 1969. The petitioner contended that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 now governs this area of law and renders the assessment incorrect. The petitioner had already filed an appeal (Ext.P3) against the assessment order, which was pending before the Income Tax Appellate Tribunal (1st respondent).

What were the issues?

1. Whether the assessment order rejecting the claim for deduction under Section 80P, based on the absence of evidence for satisfying the ingredients of a Primary Agricultural Credit Society, is legally sustainable, particularly in light of the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485? (Question of law and fact, concerning Section 80P of the Income Tax Act, 1961). 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 incorrect. The petitioner relied on this Supreme Court judgment. Revenue's contention: The judgment does not record any specific contentions made by the revenue in this writ petition. However, the assessment order itself indicates the revenue's position that there was no evidence to show the petitioner satisfied the ingredients of a Primary Agricultural Credit Society.

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 17TH DAY OF NOVEMBER 2022 / 26TH KARTHIKA, 1944 WP(C) NO. 36542 OF 2022 PETITIONER: 1 THE CHAVAKKAD SERVICE CO-OPERATIVE BANK LTD.NO.F.9991 BEACH ROAD. P.O, CHAVAKKAD, THRISSUR- 680 506, REPRESENTED BY ITS SECRETARY., PIN - 680506 BY ADV P.C.SASIDHARAN RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, ROOM NO.356 C.R. BUILDING, IP ESTATE, DELHI- 110 002., PIN - 110002 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX O/O THE PRINCIPAL COMMISSIONER OF INCOME TAX, AYAKAR BHAVAN, MANANCHIRA, KOZHIKODE, KERALA - 673001. , PIN - 673001 3 THE INCOME TAX OFFICER WARD 1 & TPS, CITY PLAZA, INCOME TAX OFFICE, WEST NADA, GURUVAYOOR, KERALA - 680 101., PIN - 680101 BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.36542 of 2022 2 JUDGMENT Dated this the 17th 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 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. WPC No.36542 of 2022 3 3. Since the petitioner has already preferred an appeal as Ext.P3 and the same is pending consideration before the Income Tax Appellate Tribunal (1st 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 1st 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. The writ petition is disposed of as above. GOPINATH P. JUDGE SKP/17-11

WPC No.36542 of 2022 4 APPENDIX OF WP(C) 36542/2022 PETITIONER’S EXHIBITS: EXHIBIT P1 THEOF THE ASSESSMENT ORDER DURING THE ASSESSMENT YEAR 2020-2021 DATED 26/09/2022 EXHIBIT P2 THEOF THE DEMAND NOTICE DATED 26/09/2022 EXHIBIT P3 THEOF THE APPEAL DATED 22/10/2022 EXHIBIT P4 THEOF THE ACKNOWLEDGEMENT RECEIPT OF INCOME TAX FORMS SHOWING THE FILING OF THE APPEAL ON 22/10/2022 EXHIBIT P5 THEOF THE STAY PETITION DATED 22/10/2022 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXHIBIT P6 THEOF THE JUDGMENT IN W.A.NO.1536 OF 2019 DATED 1/7/2019 EXHIBIT P7 EXHIBIT P7:- THEOF THE JUDGMENT IN W.P(C) NO.14282/2021 DATED 19/7/2021 EXHIBIT P8 EXHIBIT P8:-OF THE JUDGMENT DATED 27.10.2022 IN WPC NO. 34067/2022 OF THIS HONOURABLE COURT RESPONDENTS' EXHIBITS:NILP.A.TO JUDGE

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