THE NATTIKA SERVICE CO-OPERATIVE BANK LTD NO.R.308 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/34067/2022HC KeralaKLHC01072697202227 October 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 filed an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals), which was pending. Therefore, the High Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the pending appeal in a time-bound manner. The Court directed the Commissioner of Income Tax (Appeals) to consider and pass appropriate orders on Ext.P3 expeditiously. Furthermore, the Court ordered that no coercive steps would be initiated against the petitioner pursuant to the assessment order until the appeal was disposed of. No specific issue was left undecided, as the court deferred to the appellate process.

What were the facts?

The petitioner, The Nattika Service Co-Operative Bank Ltd., a Primary Agricultural Credit Society, received an assessment order dated August 30, 2022. The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria for a Primary Agricultural Credit Society under the Kerala Co-Operative Societies Act. The petitioner challenged this assessment order 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 now governs the field and renders the assessment incorrect. The appeal is currently pending.

What were the issues?

1. Whether the assessment order dated August 30, 2022, rejecting the petitioner's claim for deduction under Section 80P, is legally sustainable, 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 Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485] is now the governing precedent, and based on this judgment, the assessment order is incorrect. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the assessee's arguments before the High Court. The assessment order itself rejected the deduction on the ground that the petitioner did not satisfy 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 27TH DAY OF OCTOBER 2022 / 5TH KARTHIKA, 1944 WP(C) NO. 34067 OF 2022 PETITIONER/S: THE NATTIKA SERVICE CO-OPERATIVE BANK LTD NO.R.308 P.O.NATTIKA, THRISSUR - 680566, REPRESENTED BY ITS SECRETARY., PIN - 680566 BY ADV P.C.SASIDHARAN RESPONDENT/S: 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 JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 34067 OF 2022 2

JUDGMENT

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 on 30.08.2022. 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 1st 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 1st respondent, I deem it fit that this writ petition be disposed of, directing the Appellate Authority to consider the appeal in a time bound manner.

WP(C) NO. 34067 OF 2022 3

4.

Accordingly, there will be a direction to the 1st respondent to consider and pass appropriate orders on Ext.P3 as expeditiously as possible.

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P3 assessment order.

The writ petition is disposed of as above. GOPINATH P. JUDGE ajt

WP(C) NO. 34067 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 34067/2022 PETITIONER EXHIBITS Exhibit P1 EXHIBIT-P1: TRUE COPY OF THE ASSESSMENT ORDER DATED 30/08/2022 FOR THE ASSESSMENT YEAR 2020-2021 ISSUED BY THE 1ST RESPONDENT. Exhibit P2 EXHIBIT-P2: TRUE COPY OF THE DEMAND NOTICE DATED 30/08/2022 ISSUED BY THE 1ST RESPONDENT. Exhibit P3 EXHIBIT-P3: TRUE COPY OF THE APPEAL DATED 29/9/2022 PREFERRED BEFORE THE 1ST RESPONDENT BY THE PETITIONER Exhibit P4 EXHIBIT-P4:TRUE COPY OF THE ACKNOWLEDGEMENT OF RECEIPT OF FORM SHOWING THE DATE OF FILING AS 29/9/2022 Exhibit P5 EXHIBIT-P5: TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER DATED 29/9/2022 Exhibit P6 EXHIBIT-P6: TRUE COPY OF THE JUDGMENT DATED 1/7/2019 IN W.A.1536 OF 2019 Exhibit P7 EXHIBIT P7:- TRUE COPY OF THE JUDGMENT IN W.P(C) NO.22073/2021 DATED 13/10/2021 Exhibit P8 EXHIBIT P8:- TRUE COPY OF THE JUDGMENT IN W.P(C) NO. 24804/2021 DATED 11-11-2021

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