THE ARTHAT ANJOOR SERVICE CO-OPERATIVE SOCIETY LTD. NO. R.106 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/27356/2022HC KeralaKLHC01057889202224 August 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 appeal. Instead, it directed the Commissioner of Income Tax (Appeals), the first respondent, to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P3) expeditiously. The Court also ordered that no coercive steps would be initiated against the petitioner pursuant to the assessment order (Ext.P1) and demand notice (Ext.P2) until the appeal was disposed of. The specific legal questions regarding the applicability of Section 80P and the Supreme Court's judgment were not adjudicated upon by the High Court in this writ petition, as the primary focus was on expediting the appellate process.

What were the facts?

The petitioner, Arthat Anjoor Service Co-operative Society Ltd., a Primary Agricultural Credit Society, is challenging an assessment order dated March 23, 2022, for the assessment year 2015-16. The Income Tax Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria of a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act. The petitioner appealed this order to 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 governs the situation and renders the assessment incorrect. The writ petition was filed before the High Court of Kerala because the appeal was pending.

What were the issues?

1. Whether the assessment order dated March 23, 2022, for AY 2015-16, which rejected the petitioner's claim for deduction under Section 80P, is legally sustainable, considering 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 argued that the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax dictates that Primary Agricultural Credit Societies are entitled to deduction under Section 80P, rendering the assessment order incorrect. Revenue's Contentions: The judgment does not record any specific contentions from the revenue in response to the petitioner's arguments before the High Court. The revenue's position was reflected in the assessment order.

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. WEDNESDAY, THE 24TH DAY OF AUGUST 2022 / 2ND BHADRA, 1944 WP(C) NO. 27356 OF 2022 PETITIONER/S: THE ARTHAT ANJOOR SERVICE CO-OPERATIVE SOCIETY LTD. NO. R.106 P.O. ARTHAT, THRISSUR - 680 521 REPRESENTED BY ITS SECRETARY., PIN - 680521 BY ADV P.C.SASIDHARAN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, ROOM NO.356 C.R. BUILDINGS, 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 I & TPS, INCOME TAX OFFICE, CITY PLAZA, WEST NADA, GURUVAYOOR- 680 101., PIN - 680101 BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 27356 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 for the year 2015-16 was issued against the petitioner on 23.03.2022. 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 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. 27356 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.P1 assessment order and Ext.P2 demand notice.

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

WP(C) NO. 27356 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 27356/2022 PETITIONER EXHIBITS Exhibit P1 THE TRUE COPY OF THE ASSESSMENT ORDER DATED 23/03/2022 Exhibit P2 THE TRUE COPY OF THE DEMAND NOTICE FOR THE ASSESSMENT YEAR 2008-2009 DATED 23.03.2022 Exhibit P3 THE TRUE COPY OF THE APPEAL DATED 03/08/2022 Exhibit P4 THE TRUE COPY OF THE ACKNOWLEDGMENT OF RECEIPT OF FORM SHOWING THE DATE OF FILING AS 03/08/2022 Exhibit P5 THE TRUE COPY OF THE STAY PETITION DATED 22- 08-2022 Exhibit P6 THE TRUE COPY OF THE JUDGMENT IN W.P(C) NO. 14282/2021 DATED 19/07/2021 OF THIS HONOURABLE COURT Exhibit P7 THE TRUE COPY OF THE JUDGMENT IN W.P(C) NO. 14314/2022 DATED 22-04-2022

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