THE ELAPPULLY SERVICE CO-OPERATIVE BANK LIMITED vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/21267/2022HC KeralaKLHC01043778202230 June 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 case. Instead, it noted that the petitioner had already preferred an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) and that this appeal was pending. Therefore, the Court deemed it appropriate to dispose of the writ petition by directing the competent Appellate Authority to consider the pending appeal in a time-bound manner. The Court issued a direction to the 1st respondent/competent Appellate Authority to consider and pass appropriate orders on Ext.P3 expeditiously. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. No specific finding was made on the issues raised, nor was any ratio decidendi established as the appeal was pending.

What were the facts?

The petitioner, The Elappully Service Co-operative Bank Limited, is a Primary Agricultural Credit Society. The Assessing Officer issued an assessment order on 24.12.2019, rejecting the petitioner's claim for deduction under Section 80P. The reason for rejection was the alleged lack of evidence demonstrating that the petitioner satisfied the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner challenged this assessment order before 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 now governs the field and renders the assessment incorrect. The appeal is pending before the appellate authority.

What were the issues?

1. Whether the assessment order dated 24.12.2019, which rejected the petitioner's claim for deduction under Section 80P on the ground that it did not satisfy the ingredients of a Primary Agricultural Credit Society, is legally sustainable, 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 and fact, concerning Section 80P of the Income Tax Act). Assessee's Contention: The petitioner argues that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the present case, implying that the assessment order is incorrect. The petitioner relies on this Supreme Court judgment. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the petitioner's arguments regarding the Supreme Court's judgment. The assessment order itself rejected the deduction based on the absence of evidence for satisfying 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. THURSDAY, THE 30TH DAY OF JUNE 2022 / 9TH ASHADHA, 1944 WP(C) NO. 21267 OF 2022 PETITIONER: THE ELAPPULLY SERVICE CO-OPERATIVE BANK LIMITED NO.F 1193, ELAPPULLY, PALAKKAD DISTRICT, PIN - 678 622, REPRESENTED BY ITS SECRETARY. BY ADV O.D.SIVADAS RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, SHAKTAN NAGAR, THRISSUR, PIN - 680 001. 2 THE INCOME TAX OFFICER, WARD 2, AAYKAR BHAVAN, ENGLISH CHURCH ROAD, PALAKKAD, PIN - 678 014. BY SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 21267 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 24.12.2019. 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 competent Appellate Authority to consider the appeal in a time bound manner.

WP(C) NO. 21267 OF 2022 3

4.

Accordingly, there will be a direction to the 1st respondent / competent Appellate Authority 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. The writ petition is disposed of as above. GOPINATH P. JUDGE DK

WP(C) NO. 21267 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 21267/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 24/12/2019 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2017-18. Exhibit P2 TRUE COPY OF THE NOTICE DATED 24/12/2019 ISSUED BY THE 2ND RESPONDENT OF UNDER SECTION 156 OF THE INCOME TAX ACT FOR ASSESSMENT YEAR 2017-18. Exhibit P3 TRUE COPY OF THE APPEAL DATED 24/01/2020 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2017-18. Exhibit P4 TRUE COPY OF THE PROCEEDING DATED 9/6/2022 ISSUED BY THE 2ND RESPONDENT IN RELATION TO THE ASSESSMENT YEAR 2017-18. Exhibit P5 TRUE COPY OF THE JUDGMENT DATED 6/09/2021 IN WP(C) NO.18004 OF 2021 RENDERED BY THIS HON'BLE COURT.

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