KODUNGALLUR TALUK PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD. vs. THE INCOME TAX OFFICER

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WP(C)/15117/2022HC KeralaKLHC01030362202203 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 directed the Appellate Authority (the 1st respondent, referring to the Commissioner of Income Tax (Appeals) as the appellate authority) to consider and pass appropriate orders on the petitioner's appeal (Ext.P2) expeditiously. The Court deemed it fit to dispose of the writ petition by directing the appellate authority to consider the pending appeal in a time-bound manner. 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 Section 80P was left to be decided by the appellate authority.

What were the facts?

The petitioner, Kodungallur Taluk Primary Co-operative Agricultural and Rural Development Bank Ltd., is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. The Income Tax Officer (1st respondent) passed an assessment order on March 26, 2022 (Ext.P1). In this order, the petitioner's claim for deduction under Section 80P was rejected. The reason cited was the absence of evidence demonstrating that the petitioner satisfied 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) (2nd respondent) by filing an appeal (Ext.P2). The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485] now governs the field and renders the assessment incorrect.

What were the issues?

1. Whether the assessment order dated March 26, 2022, rejecting the petitioner's claim for deduction under Section 80P on the ground of insufficient evidence regarding its status as a Primary Agricultural Credit Society, is legally sustainable? Assessee's Contentions: The petitioner contended that the assessment order is incorrect because the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485] governs the present case. This judgment, according to the petitioner, validates their claim for deduction. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue at this stage of the writ petition. The assessment order itself indicates the revenue's position that the petitioner failed to provide evidence to satisfy 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. FRIDAY, THE 3RD DAY OF JUNE 2022 / 13TH JYAISHTA, 1944 WP(C) NO. 15117 OF 2022 PETITIONER: KODUNGALLUR TALUK PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD. NO.R 1353, P.O. KODUNGALLUR - 680 664, THRISSUR DISTRICT, REPRESENTED BY ITS SECRETARY, SHRI SHOUKATHALI K. K. BY ADVS. T.M.SREEDHARAN (SR.) V.P.NARAYANAN ALAN PRIYADARSHI DEV RESPONDENTS: 1 THE INCOME TAX OFFICER OFFICE OF THE INCOME TAX OFFICER, WARD NO.2(1), AAYAKAR BHAVAN, INCOME TAX OFFICE, SHAKTHAN THAMPURAM NAGAR, THRISSUR - 680 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, NEW DELHI - 110 001. BY ADVS. P.K.RAVINDRANATHA MENON (SR.) JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.15117/2022 -:2:-

J U D G M E N T 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 26.03.2022. 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 1st 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 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.

4.

Accordingly, there will be a direction to the 1st 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) 15117/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER AND DEMAND NOTICE DATED 26.03.2022 ALONG WITH COMPUTATION OF INCOME ALONG WITH DEMAND NOTICE PASSED BY THE 1ST RESPONDENT FOR AY 2014-15. Exhibit P2 TRUE COPY OF THE MEMORANDUM OF APPEAL E- FILED DATED 19.04.2022 FOR THE ASSESSMENT YEAR 2014-15 FILED BEFORE THE 1ST RESPONDENT. Exhibit P3 TRUE COPY OF THE STAY PETITION DATED 19.04.2022 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 13.09.2021 IN W.P.(C) NO.13393/2021 OF THIS HON'BLE COURT.

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