THE KONGAD SERVICE CO-OPERATIVE BANK LTD. vs. THE ADDITIONAL / JOINT / DEPUTY / ASST. COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER

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WP(C)/11951/2021HC KeralaKLHC01032542202108 June 2021Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the merits of the claim for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. Instead, considering the nature of the issues involved and the arguments advanced, the Court directed the 2nd respondent (National Faceless Appeal Centre, Delhi) to dispose of the stay petition (Ext.P3(a)) filed along with the statutory appeal. The stay petition was to be considered and disposed of within a period of four months from the date of receipt of a copy of the judgment. Furthermore, all coercive action pursuant to the assessment order (Ext.P1) was to be kept in abeyance until the disposal of the stay petition. The petitioner was directed to furnish a copy of the judgment to the 2nd respondent for appropriate action. No issue was expressly left undecided, as the Court's focus was procedural.

What were the facts?

The petitioner, The Kongad Service Co-operative Bank Ltd., is a co-operative society that provides credit facilities to its members. It claimed a deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. However, this claim was rejected by the Assessing Officer through an order of assessment (Ext.P1). The petitioner challenged this order by filing a statutory appeal before the 2nd respondent (National Faceless Appeal Centre, Delhi) and also filed a stay petition (Ext.P3(a)) along with the appeal. The High Court of Kerala was considering a writ petition filed by the petitioner challenging the assessment order and the pending appeal.

What were the issues?

1. Whether the petitioner, a co-operative society providing credit facilities to its members, is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961? (Question of law) Assessee's Contention: The petitioner claims eligibility for deduction under Section 80P(2)(a)(i) for its business of providing credit facilities to its members. Revenue's Contention: The revenue, through the Assessing Officer's order (Ext.P1), rejected the petitioner's claim for deduction under Section 80P. The specific arguments of the revenue regarding the rejection are not detailed in the judgment, but the rejection itself is the basis of the appeal. The primary issue before the High Court was not to decide the merits of the Section 80P claim but to direct the disposal of the pending stay petition.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i)

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 8TH DAY OF JUNE 2021 / 18TH JYAISHTA, 1943 WP(C) NO. 11951 OF 2021 PETITIONER/S: THE KONGAD SERVICE CO-OPERATIVE BANK LTD., NO.-P 538, KONGAD POST, PALAKKAD - 678631, REPRESENTED BY ITS SECRETARY, SHYLA.K, AGED 57, D/O C.GANGADHARAN NAIR. BY ADVS. HARISANKAR V. MENON MEERA V.MENON RESPONDENT/S: 1. 2. THE ADDITIONAL / JOINT / DEPUTY / ASST. COMMISSIONER OF INCOME TAX / INCOME TAX OFFICER, NATIONAL e-ASSESSMENT CENTRE, DELHI - 110001. NATIONAL FACELESS APPEAL CENTRE, DELHI - 110001, REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.06.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 11951 OF 2021 -2-

JUDGMENT Petitioner is a Co-operative Society allegedly carrying on the business of providing credit facilities to its members. Petitioner claimed the benefit under Section 80P(2)(a)(i) of the Income Tax Act, 1961. By Ext.P1 order of assessment, the claim for deduction under Section 80P was rejected. Challenging Ext.P1, an appeal has been preferred before the 2nd respondent. A stay petition has also been preferred as is evident from Ext.P3(a).

2.

I have heard learned Counsel for the petitioner as well as learned Standing Counsel, who took notice on behalf of the department.

3.

Considering the nature of the issues involved and the arguments advanced, I am of the view that this writ petition itself can be disposed of by directing the stay petition filed along with the statutory appeal to be considered in a time bound manner. Accordingly, there will be a direction to the 2nd respondent to dispose of the stay petition Ext.P3(a) filed along with the statutory appeal. The stay petition shall be considered and disposed of within a period of four months from the date of receipt of a copy of this judgment. All coercive action

WP(C) NO. 11951 OF 2021 -3- pursuant to Ext.P1 shall be kept in abeyance till the disposal of the stay petition. The Petitioner shall furnish a copy of this judgment to the 2nd respondent for appropriate action. The writ petition is disposed of as above. BECHU KURIAN THOMAS JUDGE uu 08.06.2021

WP(C) NO. 11951 OF 2021 -4-

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2018-19 EXHIBIT P2 COPY OF THE S.O.NO.3296(E) ISSUED BY THE MINISTRY OF FINANCE, NEW DELHI EXHIBIT P2(a) COPY OF THE S.O.NO.3297(E) ISSUED BY THE MINISTRY OF FINANCE, NEW DELHI EXHIBIT P3 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT EXHIBIT P3(a) EXHIBIT P4 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE ADDITIONAL/JOINT/ASSISTANT COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, DELHI. COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN WP(C) NO.5849/2021.

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