THE PUNNAYUR PANCHAYAT SERVICE CO-OPERATIVE BANK LTD NO. P.584 vs. THE COMMISSIONER OF INCOME TAX (APPEALS),

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WP(C)/24854/2021HC KeralaKLHC01062718202111 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 assessment order or the appeal. Instead, it noted that the petitioner had already preferred an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) and that this appeal was pending. Consequently, the Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the pending appeal in a time-bound manner. The Court directed the 1st respondent (Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on Ext.P3 expeditiously. Furthermore, the Court ordered that no coercive steps would be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. No issue was expressly left undecided; the Court's action was procedural.

What were the facts?

The petitioner, The Punnaayur Panchayath Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, is challenging an assessment order dated April 6, 2021. The assessing 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 under the Kerala Co-operative Societies Act. The petitioner appealed this order to the Commissioner of Income Tax (Appeals). The petitioner argued that the assessing officer failed to consider the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, even though the assessment order was passed after this judgment.

What were the issues?

1. Whether the assessing officer erred in rejecting the petitioner's claim for deduction under Section 80P of the Income Tax Act, 1961, by failing to consider the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act. Assessee's contentions: The petitioner argued that the assessing officer did not consider the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, which was delivered prior to the assessment order. The petitioner contends that this judgment is relevant to their claim for deduction. Revenue's contentions: The judgment does not record any specific contentions made by the revenue in response to the petitioner's arguments or the issues raised.

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 THURSDAY, THE 11TH DAY OF NOVEMBER 2021 / 20TH KARTHIKA, 1943 WP(C) NO. 24854 OF 2021 PETITIONER: THE PUNNAYUR PANCHAYAT SERVICE CO-OPERATIVE BANK LTD NO. P.584 P.O. EDAKKARA AKALAD, THRISSUR 680 506, REPRESENTED BY ITS SECRETARY. BY ADV P.C.SASIDHARAN RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, DELHI 110 001. 2 THE PRINCIPAL COMMISSIONEER OF INCOME TAX. O/O THE PRINCIPAL COMMISSIONER OF INCOME TAX, AYAKAR BHAVAN, MANANCHIRA , KOZHIKODE KERALA 673 001. 3 THE INCOME TAX OFFICER, WARD 1 & TPS, CITY PLAZA, INCOME TAX OFFICE, WEST NADA, GURUVAYOOR, KERALA 680 101. OTHER PRESENT: SRI.JOSE JOSEPH,SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 24854 OF 2021 2 BECHU KURIAN THOMAS, J .............................................… W.P.(C) NO.24854 OF 2021 …........................................ Dated this the 11th day of November, 2021

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 06.04.2021. 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 1st 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.

WP(C) NO. 24854 OF 2021 3

3.

Since the petitioner has already preferred an appeal as Ext.P3 and the same is pending consideration before the 1st 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 1st respondent to consider and pass appropriate orders on Ext.P3, 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. BECHU KURIAN THOMAS JUDGE AJM

WP(C) NO. 24854 OF 2021 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 24854/2021 PETITIONER’S EXHIBITS : Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 6/04/2021. Exhibit P2 TRUE COPY OF DEMAND NOTICE DATED 6/04/2021. Exhibit P3 TRUE COPY OF THE APPEAL DATED 07/05/2021. Exhibit P4 TRUE COPY OF THE ACKNOWLEDGEMENT OF RECEIPT OF FORM EVIDENCING OF FILING APPEAL DATED 07/05/2021. Exhibit P5 TRUE COPY OF THE STAY PETITION DATED 20/5/2021. Exhibit P6 TRUE COPY OF THE ORDER ISSUED BY THE 3RD RESPONDENT DATED 28/10/2021. Exhibit P7 TRUE COPY OF STAY PETITION FILED BY THE PETITIONER DATED 01/11/2021 BEFORE THE 2ND RESPONDENT. Exhibit P8 TRUE COPY OF THE JUDGMENT DATED 1/7/2019 IN W.A. NO. 1536/2019. Exhibit P9 TRUE COPY OF THE JUDGMENT IN WPC NO. 22073/2021 DATED 13/10/2021. RESPONDENT’S EXHIBITS : NIL AJM //TRUE COPY// PA TO JUDGE

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