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

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WP(C)/26448/2021HC KeralaKLHC01066385202124 November 2021Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 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, Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on the pending appeals (Ext.P2 and Ext.P4) expeditiously. The Court deemed it fit to dispose of the writ petition by directing a time-bound consideration of the appeals, as the petitioner had already preferred them. The Court also granted a stay on coercive steps being initiated pursuant to the assessment orders (Ext.P1 and Ext.P3) until the disposal of the appeals. No issue was expressly left undecided; the court chose to defer the decision on the merits to the appellate authority.

What were the facts?

The petitioner, The Kottachery Service Co-operative Bank Ltd, is a Primary Agricultural Credit Society. The assessment orders for the assessment years 2017-18 (dated 12.12.2019) and 2018-19 (dated 16.06.2021) were issued against the petitioner. The Assessing Officer rejected the petitioner's claim for deduction under Section 80P, stating that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as per the Co-operative Societies Act. The petitioner had preferred statutory appeals against these assessment orders before the Commissioner of Income Tax (Appeals). The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others [2021 (1) KLT 485] governs the field and renders the assessments incorrect.

What were the issues?

1. Whether the assessment orders for AY 2017-18 and AY 2018-19 are liable to be set aside based on the judgment in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others [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 decision in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others [2021 (1) KLT 485] governs the present case, making the assessment orders incorrect. The petitioner had already preferred statutory appeals against the assessment orders. 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 BECHU KURIAN THOMAS WEDNESDAY, THE 24TH DAY OF NOVEMBER 2021 / 3RD AGRAHAYANA, 1943 WP(C) NO. 26448 OF 2021 PETITIONER: THE KOTTACHERY SERVICE CO-OPERATIVE BANK LTD KUNNUMMAL, KOTTACHERY, KASARGOD-671315, REPRESENTED BY ITS SECRETARY P .VANAJAKSHY. BY ADVS. S.ARUN RAJ C.T.SUJA ARJUN S.RAJ RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-2, AAYAKAR BHAVAN, VIDYANAGAR, KASARGOD-671123. 2 INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT, 2ND FLOOR, E0RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI-110003. 3 THE COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, MANANCHIRA, KOZHIKODE-673001. 4 NATIONAL FACELESS APPEAL CENTRE NORTH BLOCK, NEW DELHI-110001. OTHER PRESENT: SRI.CHRISTOPHER ABRAHAM,SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 26448 OF 2021 2 BECHU KURIAN THOMAS, J =========================== W.P.(C) Nos. 26448 of 2021 --------------------------------- Dated this the 24 th day of November, 2021

JUDGMENT Petitioner is a Primary Agricultural Credit Society registered under the Co-operative Societies Act, 1969. Ext.P1 order of assessment for the year 2017-18 was issued against the petitioner on 12.12.2019, while Ext.P3 assessment order for 2018-19 was issued on 16/06/2021. In the assessment orders, 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 Co-operative Societies Act.

2.

While assailing the assessment orders before the 1 st respondent, in the statutory appeals petitioner has sought to canvass that the judgment of the Supreme Court in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others [2021 (1) KLT 485] now governs the field thereby rendering the assessment itself as incorrect.

WP(C) NO. 26448 OF 2021 3

3.

Since the petitioner has already preferred appeals as Ext.P2 and Ext.P4 and the same are pending consideration before the 1st respondent, I deem it fit that this writ petition be disposed of directing the Appellate Authority to consider the appeals in a time bound manner.

4.

Accordingly, there will be a direction to the 1 st respondent to consider and pass appropriate orders on Ext.P2 and Ext.P4 appeals as expeditiously as possible.

5.

Till the disposal of the appeal, no coercive steps shall be initiated pursuant to Ext.P1 and Ext.P3 assessment orders. The writ petition is disposed of as above. BECHU KURIAN THOMAS JUDGE AJM

WP(C) NO. 26448 OF 2021 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 26448/2021 PETITIONER’S EXHIBITS : Exhibit P1 TRUE COPY OF THE ASSESSMENT UNDER DATED 12.12.2019 PASSED BY THE 1ST RESPONDENT UNDER SECTION 143(3) OF THE ACT FOR THE AY 2017-18. Exhibit P2 TRUE COPY OF THE FIRST APPEAL FILED BY THE PETITIONER BEFORE THE FIRST APPELLATE AUTHORITY FOR THE AY 2017-18. Exhibit P3 TRUE COPY OF THE ASSESSMENT ORDER DATED 16.06.2021 PASSED BY THE 2ND RESPONDENT UNDER SECTION 143(3) RW.S 144B OF THE ACT FOR THE AY 2018-19. Exhibit P4 TRUE COPY OF THE 1ST APPEAL E-FILED BY THE PETITIONER BEFORE THE FIRST APPELLATE AUTHORITY FOR THE AY 2018-19. RESPONDENT’S EXHIBITS : NIL AJM //TRUE COPY// PA TO JUDGE

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