PARIYARAM SERVICE CO-OPERATIVE BANK LTD. vs. INCOME TAX OFFICER

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WP(C)/16573/2022HC KeralaKLHC01033428202223 May 2022Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while acknowledging the pendency of the appeal filed by the petitioner before the Commissioner of Income Tax (Appeals), deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the appeal expeditiously. The Court directed the 3rd respondent (Commissioner of Income Tax (Appeals)) to dispose of the appeal within a period of six months from the date of receipt of a copy of the judgment, after providing an opportunity of hearing to the petitioner. Until the appeal is decided, all coercive proceedings against the petitioner pursuant to the assessment order (Ext.P1) were ordered to be kept in abeyance. The Court did not decide on the merits of the Section 80P deduction claim or the applicability of the Supreme Court judgment.

What were the facts?

The petitioner, Pariyaram Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. The Assessing Officer issued an assessment order dated 26.03.2022, rejecting the petitioner's claim for deduction under Section 80P. The reason for rejection was the alleged lack of evidence demonstrating that the petitioner met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner has filed an appeal against this assessment order before the Commissioner of Income Tax (Appeals). The petitioner contends that the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, which was rendered prior to the assessment order, was not considered by the Assessing Officer.

What were the issues?

1. Whether the Assessing Officer erred in rejecting the deduction under Section 80P by failing to consider the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act, particularly in light of the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax? (Question of law and fact, concerning Section 80P of the Income Tax Act). Assessee's contentions: The petitioner argues that the Assessing Officer failed to consider the Supreme Court judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, despite the assessment order being passed subsequent to this judgment. The petitioner believes this judgment is crucial for their claim under Section 80P. 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

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS WEDNE AY, THE 25TH DAY OF MAY 2022 / 4TH JYAISHTA, 1944 W.P.(C) NO.16573 OF 2022 PETI

TIONER: PARIYARAM SERVICE CO-OPERATIVE BANK LTD., PARIYARAM P.O., THRISSUR, PIN-680 721 REPRESENTED BY ITS SECRETARY SRI. DENNY M.V BY ADVS. K.S.HARIHARAN NAIR G.REMADEVI P.F.JOY RAJATH R NATH HARIMA HARIHARAN RES PONDENTS: 1 INCOME TAX OFFICER, WARD 2(4), RANGE-4, AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSSUR, PIN-680 001. 2 THE ADDITIONAL/JOINT/DEPUTY/ASST. COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI-110 001. 3 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, DELHI-110 001. SRI. JOSE JOSEPH, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.05.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

-2- W.P.(C) NO.16573 OF 2022 BECHU KURIAN THOMAS, J. ------------------------------------------ W.P.(C) No.16573 of 2022 ------------------------------------------ Dated this the 25th day of May, 2022 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 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 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] was not considered by the assessing officer though the assessment order was rendered subsequent to the Supreme Court Judgment.

3.

Since petitioner has already preferred an appeal as -3- W.P.(C) NO.16573 OF 2022 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. Accordingly, there will be a direction to the 3rd respondent to dispose of Ext.P2 appeal, as expeditiously as possible, at any rate, within a period of six months from the date of receipt of a copy of this judgment, after granting an opportunity of hearing to the petitioner. Till then, all coercive proceedings against the petitioner pursuant to Ext.P1 shall be kept in abeyance. BECHU KURIAN THOMAS JUDGE bpr

-4- W.P.(C) NO.16573 OF 2022

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS EXHIBIT P1 COPY OF ASSESSMENT ORDER DATED 26-03-2022 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2013-14. EXHIBIT P2 COPY OF APPEAL MEMORANDUM FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 26-04-2022 AGAINST EXT.P1. EXHIBIT P3 COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 26-04-2022 IN EXT.P1 APPEAL.

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