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

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WP(C)/29799/2021HC KeralaKLHC01074012202121 December 2021Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS5 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 (4th respondent) to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P3) expeditiously. The Court also ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P2) until the disposal of the appeal. The primary focus of the judgment was procedural, ensuring the appeal is heard and decided in a time-bound manner, and providing interim protection to the assessee. No specific finding on the Section 80P deduction or the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment was made by the High Court in this writ petition.

What were the facts?

The petitioner, Ooruttambalam Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. The Assessing Officer issued an assessment order on May 27, 2020, rejecting the petitioner's claim for deduction under Section 80P. The rejection was based on the ground that the petitioner did not satisfy 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). The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax now governs the issue and renders the assessment incorrect. The appeal is currently pending before the Appellate Authority.

What were the issues?

1. Whether the assessment order dated May 27, 2020, rejecting the petitioner's claim for deduction under Section 80P is legally sustainable, considering the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax. Assessee's Contentions: The petitioner contends that the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the present case and that the assessment order, which rejected the deduction under Section 80P, is therefore incorrect. The petitioner relies on this Supreme Court judgment. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in this writ petition. The assessment order's reasoning, as stated in the facts, was 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 BECHU KURIAN THOMAS TUESDAY, THE 21ST DAY OF DECEMBER 2021/30TH AGRAHAYANA, 1943 WP(C) NO. 29799 OF 2021 PETITIONER: OORUTTAMBALAM SERVICE CO-OPERATIVE BANK LTD. NO T-916, OORUTTAMBALAM P.O. THIRUVANANTHAPURAM-695 507, REPRESENTED BY ITS SECRETARY SYAMJI S.L. BY ADVS. SRI.K.P.PRADEEP SRI.HAREESH M.R. SMT.RASMI NAIR T. SRI.T.T.BIJU SMT.T.THASMI SMT.M.J.ANOOPA RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE , MINISTRY OF FINANCE GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI-110 001, REPRESENTED BY ITS CHAIRMAN 2 ASSISTANT DIRECTOR OF INCOME TAX, CENTRALIZED PROCESSING CENTRE, INCOME TAX DEPARTMENT, BENGALURU, KARNATAKA-560 500 3 INCOME TAX OFFICER, WARD 2(1), AAYAKKAR BHAVAN, INCOME TAX, KOWADIAR, THIRUVANANTHAPURAM-695 003. 4 COMMISSIONER OF INCOME TAX (APPEALS), W.P.(C) No.29799/21 -:2:- THIRUVANANTHAPURAM, AAYAKKAR BHAVAN, INCOME TAX OFFICE, KOWADIAR, THIRUVANANTHAPURAM-695 003. 5 ADDITIONAL COMMISSIONER OF INCOME TAX, NATIONAL E-ASSESSMENT CENTRE, DELHI ROOM NO 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. ADV. SRI.CHRISTOPHER ABRAHAM-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.12.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.29799/21 -:3:- BECHU KURIAN THOMAS, J. ----------------------------------------- W.P.(C) No.29799 of 2021 ---------------------------------------- Dated this the 21st day of December, 2021

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Ext.P2 order of assessment was issued against the petitioner on 27.05.2020. 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.P3 and the same is pending consideration before the 4th 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.

4.

Accordingly, there will be a direction to the 4th 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.P2 assessment order. The writ petition is disposed of as above. BECHU KURIAN THOMAS JUDGE vps

Appendix — schedule of exhibits
APPENDIX OF WP(C) 29799/2021 PETITIONER'S/S' EXHIBITS Exhibit P1 TRUE COPY OF THE RETURN OF INCOME DATED 02.11.2019 FOR THE ASSESSMENT YEAR 2019- 20 IN PAN AAAA01130G FILED BY THE PETITIONER Exhibit P2 TRUE COPY OF THE ORDER INTIMATION UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 DATED 27.5.2020 ISSUED FOR THE YEAR 2019-20 BY THE 2ND RESPONDENT TO THE PETITIONER Exhibit P3 TRUE COPY OF THE APPEAL DATED 9.6.2020 FILED BY FOR THE YEAR 2019-20 BEFORE THE 4TH RESPONDENT BY THE PETITIONER Exhibit P4 TRUE COPY OF THE DEMAND NOTICE NO ITBA/RCV/F/17/2021-22/1037717988(1) DATED 11.12.2021 ISSUED FOR THE YEAR 2019-20 BY THE 3RD RESPONDENT TO THE PETITIONER Exhibit P5 TRUE COPY OF THE STAY APPLICATION FILED ON 14.12.2021 IN EXT P3 APPEAL BY THE PETITIONER

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