POOVACHAL RURAL HOUSING CO-OPERATIVE SOCIETY LTD. vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/32618/2022HC KeralaKLHC01069281202214 October 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while not deciding the merits of the appeal, disposed of the writ petition by directing the Commissioner of Income Tax (Appeals) to consider and pass orders on the petitioner's appeal (Ext.P3) after providing an opportunity of hearing. Crucially, the Court directed that any demand arising from the rectification order (Ext.P1) and the demand notice (Ext.P2) shall be kept in abeyance until a decision is taken on the statutory appeal. This approach is consistent with how the Court has dealt with similar matters, aiming to prevent coercive steps against the assessee pending the resolution of their statutory appeals. The principle is to allow the statutory appellate authority to decide the appeal on merits without the assessee facing immediate recovery actions.

What were the facts?

The petitioner, Poovachal Rural Housing Co-operative Society Ltd., is aggrieved by an order of rectification of assessment for the assessment year 2014-15 and a subsequent demand notice. The petitioner claims exemption under Section 80P of the Income Tax Act. They filed an appeal against the rectification order and a stay application before the Commissioner of Income Tax (Appeals). The petitioner relies on the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another, which they believe supports their claim. The High Court of Kerala considered the facts and the pendency of similar matters before it.

What were the issues?

1. Whether the petitioner is entitled to exemption under Section 80P of the Income Tax Act for the assessment year 2014-15, considering the rectification order and demand notice. Assessee's Contentions: The petitioner contends that the issue is covered in their favour by the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another; 2021 (1) KHC 303 (SC). They have filed a statutory appeal against the rectification order and a stay application. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in this writ petition.

Which sections of the Income-tax Act were involved?

Section 80P

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 14TH DAY OF OCTOBER 2022 / 22ND ASWINA, 1944 WP(C) NO. 32618 OF 2022 PETITIONER: 1 POOVACHAL RURAL HOUSING CO-OPERATIVE SOCIETY LTD. NO.T 355, POOVACHAL P.O., THIRUVANANTHAPURAM DISTRICT, PIN - 695 575 REPRESENTED BY ITS SECRETARY, PADMAKUMAR M.A.,AGED 53 YEARS, S/O.APPUKUTTAN NAIR, RESIDING AT 'PUNYAM', MINI NAGAR, KATTAKKODE P.O., THIRUVANANTHAPURAM DISTRICT, PIN - 695575 BY ADV BABU S. NAIR RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), NEW DELHI, PIN - 110002 2 THE INCOME TAX OFFICER WARD 2(1), ROOM NO.A-104, AYAKKAR BHAVAN, 1ST FLOOR, KOWDIYAR P.O., THIRUVANANTHAPURAM, PIN - 695003 ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 14.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT Dated this the 14th day of October, 2022 Aggrieved by Ext.P1 order of rectifying the assessment for the year 2014-15 and Ext.P2 demand notice, the petitioner filed Ext.P3 appeal along with Ext.P4 application for stay. The petitioner claims exemption under Section 80P of the Income Tax Act. It is submitted that the issue is covered in favour of the petitioner by Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another; 2021 (1) KHC 303 (SC).

2.

Having regard to the above facts and considering the fact that similar matters have been disposed of by this court directing any coercive steps to be kept in abeyance till a decision is taken on statutory appeals, this writ petition is disposed of directing the 1st respondent to consider and pass orders on Ext.P3 appeal after affording an opportunity of hearing to the petitioner. It is directed that any demand pursuant to Exts.P1 and P2 shall be kept in abeyance till orders as passed on Ext.P3 appeal. GOPINATH P. JUDGE SKP/14-10

Appendix — schedule of exhibits
APPENDIX OF WP(C) 32618/2022 PETITIONER'S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE ASSESSMENT ORDER ISSUED TO THE PETITIONER BY THE 2ND RESPONDENT DATED, 20- 9-2022 EXHIBIT P2 A TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE 2ND RESPONDENT DATED, 20-9-2022 EXHIBIT P3 TRUE COPY OF THE APPEAL SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED, 4- 10-2022 EXHIBIT P4 A TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT DATED, 4-10-2022 EXHIBIT P5 A TRUE COPY OF THE ACKNOWLEDGMENT ISSUED BY THE FIRST RESPONDENT DATED, 4-10-2022 RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A.TO JUDGE

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