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

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WP(C)/26396/2021HC KeralaKLHC01066394202124 November 2021Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court did not decide the merits of the case. Instead, it noted that the petitioner had already preferred appeals against the assessment orders before the 4th respondent (National Faceless Appeal Centre) and that these appeals were pending. Consequently, the Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the pending appeals in a time-bound manner. The 4th respondent was directed to consider and pass appropriate orders on Ext.P2 and Ext.P4 expeditiously. Furthermore, the Court ordered that no coercive steps would be initiated pursuant to the assessment orders (Ext.P1 and Ext.P3) until the disposal of the appeals. No specific issue was left undecided, as the Court chose to defer the decision on the merits to the appellate authority.

What were the facts?

The petitioner, The Nileshwar Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. For assessment year 2017-18, an assessment order dated 18.12.2019 (Ext.P1) rejected its claim for deduction under Section 80P, stating a lack of evidence that it met the criteria for a Primary Agricultural Credit Society under the Co-operative Societies Act. Similarly, for assessment year 2018-19, an assessment order dated 24.02.2021 (Ext.P3) also rejected the Section 80P deduction claim. The petitioner had filed appeals (Ext.P2 and Ext.P4) against these orders before the 4th respondent, the National Faceless Appeal Centre, which were pending.

What were the issues?

1. Whether the assessment orders rejecting the claim for deduction under Section 80P of the Income Tax Act, 1961, are erroneous, considering 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]? (Question of law) Assessee's contention: 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 governs the field and renders the assessment orders incorrect. Revenue's contention: The judgment records no specific contention from the revenue regarding this issue.

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. 26396 OF 2021 PETITIONER: THE NILESHWAR SERVICE CO-OPERATIVE BANK LTD II/563, NSC BANK BUILDING, RAJA ROAD, NILESHWAR, KASARAGOD - 671 314 REPRESENTED BY ITS SECRETARY P.RADHAKRISHNAN NAIR. BY ADV S.ARUN RAJ RESPONDENTS: 1 THE INCOME TAX OFFICER WARD-2, AAYAKAR BHAVAN, VIDYANAGAR, KASARAGOD - 671 123. 2 INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI - 110 003. 3 THE COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE - 673 001. 4 NATIONAL FACELESS APPEAL CENTRE NORTH BLOCK, NEW DELHI - 110 001. 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. 26396 OF 2021 2 BECHU KURIAN THOMAS, J .............................................… W.P.(C) NO.26396 OF 2021 …........................................ Dated this the 24th 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 was issued against the petitioner on 18.12.2019 for the assessment year 2017-18. 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 Co-operative Societies Act.

2.

Similarly, for the assessment year, 2018-19 also, assessment order was issued rejecting the claim for deduction under Section 80P. The ssaid order dated 24.02.2021 is produced as Ext.P3. WP(C) NO. 26396 OF 2021 3

3.

While assailing the assessment orders before the 4 th respondent, 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.

4.

Since the petitioner has already preferred appeals as Ext.P2 and Ext.P4 and the same are pending consideration, before the 4 th 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.

5.

Accordingly, there will be a direction to the 4 th respondent to consider and pass appropriate orders on Ext.P2 and Ext.P4, as expeditiously as possible.

6.

Till the disposal of the appeals, 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. 26396 OF 2021 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 26396/2021 PETITIONER’S EXHIBITS : Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 18/12/2019 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 24/2/2021 PASSED BY THE 2ND RESPONDENT UNDER SECTION 143(3) RW.S 143(3A) & 143 (3B) FOR THE AY 2018-19. Exhibit P4 TRUE COPY OF THE FIRST APPEAL E-FILED BY THE PETITIONER BEFORE THE FIRST APPELLATE AUTHORITY FOR THE 2018-19. RESPONDENT’S EXHIBITS : NIL AJM //TRUE COPY// PA TO JUDGE

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