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

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WP(C)/17843/2022HC KeralaKLHC01036459202202 June 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the merits of the assessment order or the appeal. Instead, it noted that the petitioner had already preferred an appeal (Ext.P2) which was pending before the 3rd respondent (Commissioner of Income Tax (Appeals)). Therefore, the Court deemed it fit to dispose of the writ petition by directing the Appellate Authority to consider the appeal in a time-bound manner. The Court directed the 3rd respondent to consider and pass appropriate orders on Ext.P2 expeditiously. Additionally, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to Ext.P1 assessment order until the disposal of the appeal. The issue of the validity of the assessment order under Section 80P, in light of the Mavilayi Service Co-operative Bank Ltd. judgment, was expressly left undecided by the High Court.

What were the facts?

The petitioner, The Ezhumattoor Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. The Assessing Officer passed an assessment order on April 7, 2021, rejecting the petitioner's claim for deduction under Section 80P without assigning reasons. The petitioner argued that the assessment order ignored their entitlement to deduction under Section 80P(2)(a)(i) for financial activities with members and under Section 80P(2)(d) for interest income from another Co-Operative Society. The petitioner has filed an appeal against the assessment order, which is pending before the Commissioner of Income Tax (Appeals). The petitioner is seeking a direction for a time-bound disposal of this appeal.

What were the issues?

1. Whether the assessment order dated April 7, 2021, rejecting the petitioner's claim for deduction under Section 80P is legally sustainable, considering the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax [2021 (1) KLT 485]? (Question of law) Assessee's Contentions: - The assessment order is incorrect as it failed to consider the entitlement to deduction under Section 80P(2)(a)(i) and Section 80P(2)(d). - The Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the field, rendering the assessment incorrect. Revenue's Contentions: - No specific contentions are recorded for the revenue in the judgment.

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. THURSDAY, THE 2ND DAY OF JUNE 2022 / 12TH JYAISHTA, 1944 WP(C) NO. 17843 OF 2022 PETITIONER: THE EZHUMATTOOR SERVICE CO-OPERATIVE BANK LTD., NO-1546, EZHUMATTOOR, MALLAPPALLY, PATHANAMTHITTA-689586 REPRESENTED BY ITS SECRETARY ALEXANDER C BY ADVS. K.P.PRADEEP HAREESH M.R. SANAND RAMAKRISHNAN T.T.BIJU T.THASMI M.J.ANOOPA SANU S MALAKEEL RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE OF INDIA, NORTH BLOCK GOVERNMENT NEW DELHI-110001, REPRESENTED BY ITS CHAIRMAN 2 ADDITIONAL COMMISSIONER OF INCOME TAX, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.17843/2022 -: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 07.04.2021. In the assessment order, petitioner's claim for deduction under Section 80P was rejected without assigning any reason but ignoring the fact that the petitioner society is entitled for deduction under Section 80 P(2)(a)(i) on financial activities with members and under Section 80(P)(2)(d) with respect to the interest income received from the Co-Operative Society.

2.

While assailing the assessment order before the 3rd 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 3rd 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 3rd 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) 17843/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/143(3)/2021 22/1032251854(1) DATED 07-04-2021 ISSUED FOR THE YEAR 2018-19 BY THE 2NDRESPONDENT TO THE PETITIONER Exhibit P2 TRUE COPY OF THE APPEAL DATED 29-04-2021 FILED FOR THE YEAR 2018-19 BEFORE THE 3RDRESPONDENT BY THE PETITIONER Exhibit P3 TRUE COPY OF THE DEMAND NOTICE ITBA/AST/S/156/2021-22/1032251865(1) DATED 07-04-2021 ISSUED FOR THE YEAR 2018-19 BY THE 2ND RESPONDENT Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 23-02- 2022 IN WPC NO 6109 OF 2022

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