M/S. MANNARKKAD TALUK CO-OPERATIVE EMPLOYEES CO-OP. SOCIETY LTD. vs. THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER

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WP(C)/30668/2022HC KeralaKLHC01065133202227 September 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the merits of the assessment order or the appeal. Instead, it directed the Appellate Authority (2nd respondent) to consider and pass orders on the petitioner's application for condonation of delay (Ext.P3) and the stay application (Ext.P4) within two months from the date of receiving a certified copy of the judgment. The Appellate Authority was instructed to hear the petitioner before passing orders. It was clarified that an order on the stay petition on merits would only be passed if the delay in filing the appeal is condoned. Until the disposal of the delay and stay petitions, no coercive steps would be initiated against the petitioner based on the assessment order. The High Court explicitly left the substantive issues of the appeal undecided.

What were the facts?

The petitioner, Mannarkkad Taluk Co-operative Employees Co-op. Society Ltd., a Primary Agricultural Credit Society, received an assessment order dated March 29, 2022. The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was insufficient evidence to establish it met the criteria for a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act. The petitioner challenged this order before the National Faceless Appeal Centre, Delhi, arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governed the matter and rendered the assessment incorrect. The petitioner had filed an appeal (Ext.P2), a stay application (Ext.P4), and an application for condonation of delay (Ext.P3) of 137 days, which were pending.

What were the issues?

1. Whether the assessment order dated March 29, 2022, rejecting the deduction under Section 80P is sustainable in light of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax? (Question of law) Assessee's Contentions: The petitioner contended that the assessment order was incorrect as the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the field and supports their claim for deduction under Section 80P. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in response to the issues raised by the petitioner. The focus of the High Court's order was on the procedural aspect of the pending appeal.

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. TUESDAY, THE 27TH DAY OF SEPTEMBER 2022 / 5TH ASWINA, 1944 WP(C) NO. 30668 OF 2022 PETITIONER/S: THE MANNARKKAD TALUK CO-OPERATIVE EMPLOYEES CO-OP. SOCIETY LTD.NO. P 629, MANNARKKAD, PALAKKAD, REPRESENTED BY ITS SECRETARY, P.K. MOHANDAS, , PIN - 678582 BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENT/S: 1 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE DELHI , PIN - 110001 2 NATIONAL FACELESS APPEAL CENTRE NATIONAL FACELESS APPEAL CENTRE, DELHI , REPRESENTED BY THE COMMISSIONER OF INCOME TAX (APPEALS). , PIN - 110001 ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.09.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 30668 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 29.03.2022. 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 2nd 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.P2 along with Ext.P4 application for stay and an application for condonation of delay (Ext.P3) of 137 days, and the same is pending consideration before the 2nd respondent, I deem it fit that this writ petition be disposed of, directing the Appellate Authority to consider the delay petition and the stay

WP(C) NO. 30668 OF 2022 3 petition in a time bound manner.

4.

Having regard to the facts and circumstances of the case, this writ petition is disposed of, directing the 2nd respondent to consider and pass orders on Ext.P3 application for condonation of delay and also on Ext.P4 application for stay filed in Ext.P2 appeal, after affording to the petitioner an opportunity of hearing, within a period of two months from the date of receipt of a certified copy of this judgment. It is made clear that orders need to be passed on the stay petition on merits, only if the the delay in filing the appeal is condoned.

5.

Till the disposal of the delay petition and stay petition, 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 ajt

WP(C) NO. 30668 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 30668/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2016-17 DTD. 29-03- 2022 Exhibit P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 12-09-2022 Exhibit P3 COPY OF DELAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD,. 12-09-2022 Exhibit P4 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 06-09-2022

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