NADAKKAL SERVICE CO-OPERATIVE BANK LTD. vs. THE COMMISSIONER OF INCOME TAX(APPEALS)

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WP(C)/21146/2022HC KeralaKLHC01043558202229 June 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 assessment order or the appeal. Instead, the Court deemed it fit to dispose of the writ petition by directing the Appellate Authority (the 1st respondent, Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on the pending appeal (Ext.P3) expeditiously. The Court also granted a stay on coercive steps against the petitioner pursuant to the assessment order (Ext.P1) and demand notices (Exts.P2 and P4) until the disposal of the appeal. No specific finding was made on the issues raised by the petitioner regarding Section 80P or the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment. The operative direction is to expedite the appeal process.

What were the facts?

The petitioner, M/s. Nadakkal Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, is challenging an assessment order dated 28.09.2021. The assessment order rejected the petitioner's claim for deduction under Section 80P, stating that there was no evidence to show it met the criteria of a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act. The petitioner contends 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. An appeal (Ext.P3) was filed before the Commissioner of Income Tax (Appeals), the 1st respondent, and is pending. The petitioner filed a writ petition seeking a time-bound disposal of their appeal and a stay on coercive steps.

What were the issues?

1. Whether the assessment order dated 28.09.2021, which rejected the deduction under Section 80P on the grounds that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society, is legally sustainable, considering the judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485]? (Question of law and fact turning on Section 80P of the Income Tax Act, 1961 and the Kerala Co-operative Societies Act, 1969). Assessee's Contention: The petitioner argues that the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the field, implying the assessment is incorrect. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the writ petition, other than the fact that they are respondents.

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. 21146 OF 2022 PETITIONER/S: M/S.NADAKKAL SERVICE CO-OPERATIVE BANK LTD. KALLUVATHUKKAL P.O., KOLLAM - 691 578 REPRESENTED BY ITS SECRETARY. BY ADVS. C.A.JOJO SHAFFIE THOMAS RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX(APPEALS) NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI - 110 001. 2 THE INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI - 110 001. 3 INCOME TAX OFFICER WARD-4, KOLLAM, AYAKAR BHAVAN, KOLLAM - 691 001. SRI. JOSE JOSEPH, SC 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. 21146 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 28.09.2021. 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 3rd 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. 21146 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 Exts.P2 and P4 demand notices.

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

WP(C) NO. 21146 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 21146/2022 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2018-19 DATED 28/09/2021 ISSUED BY THE SECOND RESPONDENT. Exhibit P2 A TRUE COPY OF THE DEMAND NOTICE U/S 156 DATED 28/09/2021 ISSUED BY THE FIRST RESPONDENT. Exhibit P3 A TRUE COPY OF THE APPEAL FOR AY 2018-19 BEFORE THE 1ST RESPONDENT DATED 22/10/2021. Exhibit P4 A TRUE COPY OF THE DEMAND LETTER FOR 20% OF TAX, ISSUED BY THE 3RD RESPONDENT DATED 13/06/2022. Exhibit P5 A TRUE COPY OF THE PETITION NOT TO TREAT THE ASSESSEE AS A DEFAULTER, SUBMITTED BEFORE THE 3RD RESPONDENT DATED 20/06/2022.

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