PULLUKULANGARA SERVICE COOPERATIVE BANK LTD vs. THE COMMISSIONER OF INCOME TAX

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WP(C)/26145/2022HC KeralaKLHC01055149202216 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 case. Instead, it directed the Appellate Authority (the 1st respondent, Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on the pending appeals (Exts.P1, P3, and P5) and stay petitions (Exts.P2, P4, and P6) expeditiously. The Court also ordered that no coercive steps would be initiated against the petitioner pursuant to the assessment orders and demand notices (Exts.P7, P8, and P9) until the disposal of the appeals. The specific finding on the Section 80P deduction and the applicability of the Mavilayi judgment were left to be decided by the appellate authority.

What were the facts?

The petitioner, Pullukulangara Service Cooperative Bank Ltd., a Primary Agricultural Credit Society, is challenging assessment orders for assessment years 2014-2015, 2015-2016, and 2017-2018. The Assessing 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 argued 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. Appeals and stay petitions were filed with the Commissioner of Income Tax (Appeals) and were pending.

What were the issues?

1. Whether the assessment orders rejecting the deduction under Section 80P are incorrect, considering the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax (2021 (1) KLT 485)? (Question of law) Assessee's contention: The petitioner argued that the judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the field and that the assessment orders are consequently incorrect. Revenue's contention: The judgment does not record any specific contentions from the revenue regarding this issue. The assessment order itself rejected the deduction on the grounds that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act.

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 16TH DAY OF AUGUST 2022 / 25TH SRAVANA, 1944 WP(C) NO. 26145 OF 2022 PETITIONER/S: PULLUKULANGARA SERVICE COOPERATIVE BANK LTD AGED 50 YEARS NO. 299 KAYAMKULAM P.O, ALAPPUZHA REPRESENTED BY ITS SECRETARY P.K SUBASH , PIN - 690502 BY ADVS. GOKUL D. SUDHAKARAN R.HARIKRISHNAN (KAMBISSERIL) NEERAJ NARAYAN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), PANAMPILLY NAGAR, ERNAKULAM , PIN - 682036 2 THE DEPUTY COMMISSIONER OF INCOME TAX DEPARTMENT OF INCOME TAX CENTRAL CIRCLE, KOTTAYAM , PIN - 686001 3 THE ASSISTANT COMMISSIONER OF INCOME TAX DEPARTMENT OF INCOME TAX CENTRAL CIRCLE, KOTTAYAM , PIN - 686001 4 THE INCOME TAX OFFICER NATIONAL FACE LESS ASSESSMENT CENTER DELHI , PIN - 110054 5 THE INCOME TAX OFFICER WARD NO. 2, ALAPPUZHA, PIN - 688001 SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 26145 OF 2022 2

JUDGMENT

Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. The assessment orders for the assessment years 2014-2015, 2015-2016 and 2017-2018 were issued against the petitioner. In the assessment orders, 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 orders in Appeal, the 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 the appeals as Exts.P1, P3 and P5 along with stay petitions as Exts.P2,, P4 and P6 and the same are pending consideration before the 1st respondent, I deem it fit that this writ petition be disposed of directing the Appellate Authority to consider

WP(C) NO. 26145 OF 2022 3

the appeal in a time bound manner.

4.

Accordingly, there will be a direction to the competent among the respondents to consider and pass appropriate orders on Exs.P1, P3 and P5 as expeditiously as possible.

5.

Till the disposal of the appeals, no coercive steps shall be initiated against the petitioner pursuant to to the assessment orders and Exts.P7, P8 and P9 demand notices.

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

WP(C) NO. 26145 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 26145/2022 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE APPEAL FILED UNDER SECTION 35 OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2014-2015 DATED 06.07.2022 Exhibit P2 A TRUE COPY OF THE STAY PETITION DATED 26.07.2022 FOR THE ASSESSMENT YEAR 2014-2015 Exhibit P3 A TRUE COPY OF THE APPEAL FILED UNDER SECTION 35 OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2015-2016 DATED 06.07.2022 Exhibit P4 A TRUE COPY OF THE STAY PETITION DATED 26.07.2022 FOR THE ASSESSMENT YEAR 2014-2015 Exhibit P5 A TRUE COPY OF THE APPEAL FILED UNDER SECTION 35 OF THE INCOME TAX ACT FOR THE ASSESSMENT YEAR 2017-2018 DATED 2.01.2022 Exhibit P6 A TRUE COPY OF THE STAY PETITION DATED 26.07.2022 FOR THE ASSESSMENT YEAR 2017-2018 Exhibit P7 A TRUE COPY OF THE DEMAND NOTICE DATED 16.03.2022 ISSUED BY THE 5TH RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2014- 2015 Exhibit P8 A TRUE COPY OF THE DEMAND NOTICE DATED 26.03.2022 ISSUED BY THE 5TH RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2015- 2016 Exhibit P9 A TRUE COPY OF THE DEMAND NOTICE DATED 21.12.2019 ISSUED BY THE 5TH RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2017- 2018

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