THE AYROOR VILLAGE SERVICE CO-OPERATIVE BANK LTD vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/27116/2022HC KeralaKLHC01057394202223 August 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the merits of the appeal. Instead, it directed the 4th respondent, the Commissioner of Income Tax (Appeals), to consider and pass appropriate orders on the petitioner's appeal (Ext.P2) expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. The Court also ordered that no coercive steps shall be initiated against the petitioner pursuant to the demand notice (Ext.P3) until the disposal of the appeal. The principle derived is that when an appeal is pending before the appellate authority, and a writ petition is filed seeking a direction for expeditious disposal, the High Court may direct the appellate authority to decide the appeal within a stipulated time, while also granting a stay on coercive steps.

What were the facts?

The petitioner, The Ayroor Village Service Co-Operative Bank Ltd., a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969, is challenging an assessment order (Ext.P1). The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner has filed an appeal (Ext.P2) before the 4th respondent, the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The petitioner contends that the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 now governs the field and renders the assessment incorrect. The High Court is considering a writ petition (civil) filed by the petitioner.

What were the issues?

1. Whether the assessment order rejecting the deduction under Section 80P is incorrect in light of the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 (Question of law). Assessee's contentions: The petitioner argues that the assessment order is incorrect because the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 governs the present case, implying that their claim for deduction under Section 80P should have been allowed. They rely on this Supreme Court judgment. Revenue's contentions: The judgment does not record any specific contentions from the revenue regarding this issue. The assessment order itself is noted as rejecting 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. TUESDAY, THE 23RD DAY OF AUGUST 2022 / 1ST BHADRA, 1944 WP(C) NO. 27116 OF 2022 PETITIONER: THE AYROOR VILLAGE SERVICE CO-OPERATIVE BANK LTD AYROOR SOUTH RANNY, PATHANAMTHITTA- REPRESENTED BY ITS SECRETARY REENA JOHN , PIN - 689611 BY ADVS. K.P.PRADEEP HAREESH M.R. SANAND RAMAKRISHNAN T.T.BIJU M.J.ANOOPA SANU S MALAKEEL RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI- , REPRESENTED BY ITS CHAIRMAN , PIN - 110001 2 INCOME TAX OFFICER, WARD-1&TPS, THIRUVALLA INCOME TAX DEPARTMENT, INCOME TAX OFFICE, OFFICE OF ADDITIONAL CIT, THIRUVALLA RANGE, TK ROAD THIRUVALLA- , PIN - 689101 3 ADDITIONAL COMMISSIONER OF INCOME TAX, INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI- , PIN - 110003 4 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI- , PIN - 110003 SRI. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.27116/2022 -2-

J U D G M E N T 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. 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 4th 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 and the same is pending consideration before the 4th respondent, I deem it fit that this writ petition be disposed of directing the 4th respondent to consider the appeal in a time bound manner.

4.

Accordingly, there will be a direction to the 4th respondent to consider and pass appropriate orders on Ext.P2, as expeditiously as possible within a period of 2 months from the date of receipt of a copy of this judgment.

.

5.

Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P3 demand notice. The writ petition is disposed of as above. GOPINATH P. JUDGE AMG

W.P (C) No.27116/2022 -3-

Appendix — schedule of exhibits
APPENDIX OF WP(C) 27116/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/144/2019-20/1023330734(1) DATED 28-12-2019 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P2 TRUE COPY OF THE APPEAL DATED 10-02-2020 FILED FOR THE YEAR 2017-18 BEFORE THE 4TH RESPONDENT BY THE PETITIONER Exhibit P3 TRUE COPY OF THE DEMAND NOTICE NO ITBA/AST/S/156/2019-20/1023330832(1) DATED 28-12-2019 ISSUED FOR THE YEAR 2017-18 BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 23-02-2022 IN WPC NO 6109 OF 2022

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