VENGERI SERVICE CO-OPERATIVE BANK LTD vs. PRINCIPAL COMMISSIONER OF INCOME TAX

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WP(C)/29721/2022HC KeralaKLHC01063148202227 September 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the 2nd respondent (Commissioner of Income Tax (Appeals), NFAC) to consider and pass orders on the petitioner's statutory appeal (Ext.P2) after providing an opportunity of hearing. The Court further directed that any demand arising from the assessment order (Ext.P1) shall be kept in abeyance until a decision is taken on the appeal. The Court did not decide the merits of the Section 80P exemption claim but ensured that coercive recovery actions are stayed pending the appellate authority's decision. The principle is that statutory appeals should be given due consideration, and coercive measures should be deferred in cases where a favourable precedent exists and a statutory appeal is pending.

What were the facts?

The petitioner, Vengeri Service Co-operative Bank Ltd., has filed a writ petition before the High Court of Kerala challenging an assessment order (Ext.P1) passed by the 3rd respondent. The petitioner is seeking exemption under Section 80P of the Income Tax Act. The petitioner has also filed a statutory appeal (Ext.P2) before the 2nd respondent against the assessment order. 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 contend covers the issue in their favour. The High Court noted that similar matters have been disposed of by directing coercive steps to be kept in abeyance pending a decision on the statutory appeal.

What were the issues?

1. Whether the petitioner is entitled to exemption under Section 80P of the Income Tax Act, 1961, in light of the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of Income Tax and another? Assessee's Contention: The assessee argues that the issue is covered in their favour by the aforementioned Supreme Court judgment and therefore, they are eligible for the exemption under Section 80P. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in this writ petition. However, the existence of an assessment order and an appeal implies a dispute regarding the assessee's claim for exemption under Section 80P.

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
WP(C) NO. 29721 OF 2022 1 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. 29721 OF 2022 PETITIONER/S: VENGERI SERVICE CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY , VENGERI P.O. KOZHIKODE, PIN - 673010 BY ADVS. M.P.ASHOK KUMAR P.C.GOPINATH BINDU SREEDHAR ASIF N RESPONDENT/S: 1 PRINCIPAL COMMISSIONER OF INCOME TAX OFFICE OF PRINCIPAL COMMISSIONER OF INCOME TAX MANANCHIRA KOZHIKODE, PIN - 673001 2 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN - 110003 3 ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER NATIONAL E-ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM. DELHI, PIN - 110003 BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT 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. 29721 OF 2022 2

JUDGMENT Petitioner has preferred Ext.P2 appeal before the 2nd respondent against Ext.P1 assessment order passed by the 3rd respondent. 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 Ext.P2 statutory appeal, this writ petition is disposed of directing the 2nd respondent to consider and pass orders on Ext.P2 appeal, after affording an opportunity of hearing to the petitioner. It is directed that any demand pursuant to Exts.P1 shall be kept in abeyance till orders are passed on Ext.P2. The writ petition is disposed of as above. GOPINATH P. JUDGE okb/ //// P.S. to Judge

WP(C) NO. 29721 OF 2022 3

Appendix — schedule of exhibits
APPENDIX OF WP(C) 29721/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DT 15/04/2021 PASSED BY THE 3RD RESPONDENT Exhibit P2 TRUE COPY OF THE APPEAL MEMORANDUM DT 16/08/2021 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT Exhibit P3 TRUE COPY OF THE ORDER DT 04/08/2022 PASSED BY THE 1ST RESPONDENT

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