THE POLPULLY SERVICE CO-OPERATIVE BANK LIMITED NO. F 1198 vs. THE COMMISSIONER OF INCOME TAX (APPEALS)

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WP(C)/21104/2022HC KeralaKLHC01043495202229 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 directed the appropriate Appellate Authority 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) until the appeal is disposed of. The core issue of whether the petitioner qualified for the Section 80P deduction based on the Mavilayi Service Co-operative Bank Ltd. judgment was left to be decided by the appellate authority. The judgment's ratio is that when an appeal is pending before the appellate authority, and a writ petition is filed seeking to quash the assessment order, the appropriate course of action is to direct the appellate authority to decide the appeal expeditiously, while granting a stay on coercive steps.

What were the facts?

The petitioner, The Polpully Service Co-operative Bank Limited, a Primary Agricultural Credit Society, challenged an assessment order dated December 26, 2018. The assessment order rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria for a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act. The petitioner appealed this 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 should govern the case. The appeal was pending and had been transferred to the National Faceless Appeal Centre.

What were the issues?

1. Whether the assessment order dated December 26, 2018, which rejected the petitioner's claim for deduction under Section 80P on the grounds of insufficient evidence regarding its status as a Primary Agricultural Credit Society, is correct. (Question of law and fact, concerning Section 80P of the Income Tax Act). Assessee's Contentions: The petitioner contended that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485] governs the field and renders the assessment order incorrect. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in this writ petition. The revenue was represented by its Standing Counsel.

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 29TH DAY OF JUNE 2022 / 8TH ASHADHA, 1944 WP(C) NO. 21104 OF 2022 PETITIONER: THE POLPULLY SERVICE CO-OPERATIVE BANK LIMITED, NO. F 1198, POLPULLY, PALAKKAD DISTRICT, PIN - 678 552, 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 IT DEPT. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 21104 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 26.12.2018. 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 and has now been transferred to the National Faceless Appeal Centre, I deem it fit that this writ petition be disposed of directing the appropriate Appellate Authority to consider the appeal in a time bound manner.

WP(C) NO. 21104 OF 2022 3

4.

Accordingly, there will be a direction to the appropriate 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. 21104 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 21104/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 26/12/2018 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2016-17. Exhibit P2 TRUE COPY OF THE NOTICE DATED 26/12/2018 ISSUED BY THE 2ND RESPONDENT OF UNDER SECTION 156 OF THE INCOME TAX ACT FOR ASSESSMENT YEAR 2016-17. Exhibit P3 TRUE COPY OF THE APPEAL DATED 23/01/2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2016-17. Exhibit P4 TRUE COPY OF THE PROCEEDING DATED 9/6/2022 ISSUED BY THE 2ND RESPONDENT IN RELATION TO THE ASSESSMENT YEAR 2016-17. 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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