PATTOM SERVICE CO-OPERATIVE BANK LTD. NO.T 1318, vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/17553/2022HC KeralaKLHC01035740202231 May 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 disposed of the writ petition by directing the Appellate Authority (3rd respondent) to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P2) expeditiously. The Court also granted interim relief, stating that no coercive steps would be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the appeal is disposed of. The primary issue concerning the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment and the validity of the Section 80P deduction was left to be decided by the appellate authority. No specific finding was made on the assessment order's correctness or the revenue's grounds for rejection.

What were the facts?

The petitioner, Pattom Service Co-operative Bank Ltd. No.T 1318, a Primary Agricultural Credit Society, received an assessment order dated March 22, 2022. The Income Tax Officer rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria for a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner filed an appeal against this assessment order before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax now governs the matter and renders the assessment incorrect.

What were the issues?

1. Whether the assessment order dated March 22, 2022, which rejected the petitioner's claim for deduction under Section 80P of the Income Tax Act, 1961, on the grounds of insufficient evidence regarding its status as a Primary Agricultural Credit Society, 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 and fact, concerning Section 80P of the Income Tax Act, 1961). Assessee's contentions: The petitioner contended that the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the field and renders the assessment order incorrect. Revenue's contentions: The judgment does not record any specific contentions made by the revenue in this writ petition.

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. TUESDAY, THE 31ST DAY OF MAY 2022 / 10TH JYAISHTA, 1944 WP(C) NO. 17553 OF 2022 PETITIONER: PATTOM SERVICE CO-OPERATIVE BANK LTD. NO.T 1318, MEDICAL COLLEGE, KANNAMMOOLA P.O., TRIVANDRUM – 695 011, REPRESENTED BY ITS SECRETARY SREEJI S. 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, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI- 110 001, REPRESENTED BY ITS CHAIRMAN. 2 INCOME TAX OFFICER, CIRCLE CENTRAL, KOLLAM, AAYAKAR BHAVAN, INCOME TAX OFFICE, NEAR KARBALA JUNCTION, RAILWAY STATION ROAD, KOLLAM – 691 001. 3 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110 003. BY SRI.CHRISTOPHER ABRAHAM, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.05.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 17553 OF 2022 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 22.03.2022. 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 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.

WP(C) NO. 17553 OF 2022 3

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 DK

WP(C) NO. 17553 OF 2022 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 17553/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER NO ITBA/AST/S/147/2021-22/1041277582(1) DATED 22-03-2022 ISSUED FOR THE YEAR 2018-19 BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit P2 TRUE COPY OF THE APPEAL DATED 21-04- 2022 FILED FOR THE YEAR 2018-19 BEFORE THE 3RD RESPONDENT BY THE PETITIONER. Exhibit P3 TRUE COPY OF THE DEMAND NOTICE ITBA/AST/S/156/2021-22/1041277601(1) DATED 22-03-2022 FOR THE YEAR 2018-19 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER.

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