ULIYACOVIL SERVICE CO-OPERATIVE BANK LTD. vs. THE INCOME TAX OFFICER

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WP(C)/8888/2020HC KeralaKLHC01022908202015 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 case. Instead, it deemed it appropriate to dispose of the writ petition by directing the Appellate Authority (the 2nd respondent, Commissioner of Income-Tax (Appeals)) to consider the pending appeal (Ext.P2) in a time-bound manner. The Court directed the 2nd respondent to consider and pass appropriate orders on Ext.P2 as expeditiously as possible. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The specific finding on the legality of the assessment order or the applicability of the Supreme Court judgment was left undecided by the High Court in this writ proceeding.

What were the facts?

The petitioner, Uliacovil Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, received an assessment order dated December 7, 2019, from the Income Tax Officer. The assessment order rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner appealed 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 governed the matter and rendered the assessment incorrect. The High Court of Kerala was considering a writ petition filed by the petitioner.

What were the issues?

1. Whether the assessment order dated December 7, 2019, which rejected the petitioner's claim for deduction under Section 80P on the grounds of not satisfying the ingredients of a Primary Agricultural Credit Society, is legally sustainable, considering the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485]? (Question of law and fact, concerning Section 80P of the Income Tax Act). Assessee's contentions: The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the field and makes the assessment order incorrect. The petitioner had already preferred an appeal against the assessment order. Revenue's contentions: The judgment does not record any specific contentions from the revenue in response to the writ petition. The assessment order itself stated that there was no evidence to show the petitioner satisfied the ingredients of a Primary Agricultural Credit Society.

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 15TH DAY OF JUNE 2022 / 25TH JYAISHTA, 1944 WP(C) NO. 8888 OF 2020 PETITIONER: ULIYACOVIL SERVICE CO-OPERATIVE BANK LTD. (NO.1003),ASRAMAM P.O., KOLLAM-691 002, REPRESENTED BY ITS SECRETARY K.K.SANTHI BY ADV KMV.PANDALAI RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-4,KOLLAM-691 001 2 THE COMMISSIONER OF INCOME-TAX (APPEALS) AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM-695 003 OTHER PRESENT: SRI. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.8888/2020 -: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 07.12.2019. 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 2nd 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.P2 and the same is pending consideration before the 2nd 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 2nd 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 against the petitioner pursuant to Ext.P1 assessment order. The writ petition is disposed of as above. GOPINATH P.

JUDGE ats

Appendix — schedule of exhibits
APPENDIX OF WP(C) 8888/2020 PETITIONER EXHIBITS EXHIBIT - P1 COPY OF ASSESSMENT ORDER DATED 7.12.2019 EXHIBIT - P2 COPY OF DEMAND NOTICE U/S.156 OF THE IT ACT DATED 7.12.19 ISSUED BY THE 1ST RESPONDENT EXHIBIT - P3 COPY OF APPEAL FILED BEFORE THE 2ND RESPONDENT DATED 9.1.2020 WITH STATEMENT OF FACTS AND GROUNDS OF APPEAL EXHIBIT - P3(A) COPY OF STAY PETITION DATED 15.01.2020 EXHIBIT - P4 TRUE COPY OF THE NOTICE U/S 22(1) OF THE IT ACT DATED 17.03.2020 ISSUED BY THE 1ST RESPONDENT

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