ANAD FARMER'S SERVICE CO-OPERATIVE BANK LTD. vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/20319/2021HC KeralaKLHC01052670202128 September 2021Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, in its writ jurisdiction, did not decide the merits of the petitioner's claim for deduction under Section 80P. Instead, the Court deemed it appropriate to direct the Appellate Authority (the 3rd respondent, Commissioner of Income Tax (Appeals)) to consider the appeal filed by the petitioner (Ext.P2) in a time-bound manner. The Court ordered the 3rd respondent to consider and pass appropriate orders on Ext.P2 as expeditiously as possible. Furthermore, the Court directed that no coercive steps shall be initiated pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The issue of whether the AO erred in rejecting the deduction under Section 80P was thus left for the appellate authority to decide.

What were the facts?

The petitioner, Anad Farmer's Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. The Assessing Officer (AO) issued an assessment order on April 7, 2021, rejecting the petitioner's claim for deduction under Section 80P. The AO's reasoning was that the petitioner did not provide evidence to satisfy the ingredients of a Primary Agricultural Credit Society as defined under the Co-operative Societies Act. The petitioner challenged this order before the Commissioner of Income Tax (Appeals). The petitioner argued that the AO failed to consider the Supreme Court's judgment in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others, which was delivered prior to the assessment order.

What were the issues?

1. Whether the Assessing Officer erred in rejecting the petitioner's claim for deduction under Section 80P of the Income Tax Act, 1961, by failing to consider the Supreme Court's judgment in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others. Assessee's Contentions: - The petitioner argued that the assessment order was passed without considering the binding precedent set by the Supreme Court in the Mavilayi Service Co-operative Bank case, despite the judgment being delivered prior to the assessment. Revenue's Contentions: - The judgment does not record any specific contentions made by the revenue in response to the petitioner's arguments.

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 28TH DAY OF SEPTEMBER 2021 / 6TH ASWINA, 1943 WP(C) NO. 20319 OF 2021 PETITIONER: ANAD FARMER'S SERVICE CO-OPERATIVE BANK LTD.919 ANAD.P.O, NEDUMANGADU, THIRUVANANTHAPURAM-695544, REPRESENTED BY ITS MANAGING DIRECTOR,RAJITH LAL.D.A. BY ADVS.K.P.PRADEEP THOMAS ABRAHAM, SC RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110001, REPRESENTED BY ITS CHAIRMAN. 2 INCOME TAX OFFICER, WARD 2(3)- THIRUVANANTHAPURAM, AAYKAR BHAWAN, 1ST FLOOR, KAWADIAR.P.O, THIRUVANANTHAPURAM-695003. 3 COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM, AAYKAR BHAWAN, KAWADIAR.P.O, THIRUVANANTHAPURAM-695003. 4 ADDITIONAL COMMISSIONER OF INCOME TAX, NATIONAL E-ASSESSMENT CENTRE, DELHI ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. SRI.CHRISTOPHER ABRAHAM-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 20319 OF 2021 2 BECHU KURIAN THOMAS, J =========================== W.P.(C) No.20319 of 2021 --------------------------------- Dated this the 28 th day of September, 2021

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Co-operative Societies Act, 1969. Ext.P1 order of assessment was issued against the petitioner on 07.04.2021. 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 Co-operative Societies Act.

2.

While assailing the assessment order before the 3 rd respondent, petitioner has sought to canvass that the judgment of the Supreme Court in Mavilayi Service Co- operative Bank and Others v. Commissioner of Income Tax, Calicut and Others [2021 (1) KLT 485] was not considered by the assessing officer though the assessment order was rendered subsequent to the Supreme Court Judgment.

WP(C) NO. 20319 OF 2021 3

3.

Since the petitioner has already preferred an appeal as Ext.P2 and the same is pending consideration before the 3 rd 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 3 rd respondent to consider and pass appropriate orders on Ext.P2, as expeditiously as possible.

5.

Till the disposal of the appeal, no coercive steps shall be initiated pursuant to Ext.P1 assessment order. The writ petition is disposed of as above. BECHU KURIAN THOMAS, JUDGE AMV/06/10//2021

WP(C) NO. 20319 OF 2021 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 20319/2021 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER NO. ITBA/AST/S/144/2021-22/1032254809(1) DATED 07.04.2021 FOR THE ASSESSMENT YEAR 2018-19 ISSUED BY THE 4TH RESPONDENT. Exhibit P2 TRUE COPY OF THE APPEAL DATED 27.05.2020 FILED FOR THE YEAR 2018-19. Exhibit P3 TRUE COPY OF THE DEMAND NOTICE ITBA/AST/S/156/2021- 22/1032254849(1) DATED 07.04.2021 FOR THE YEAR 2018- 19 ISSUED BY THE 4TH RESPONDENT. Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 31.03.2021 IN WP(C) NO. 8610 OF 2021. RESPONDENTS EXHIBITS : NIL TRUE COPY P.A.TO JUDGE

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