M/S.THIRMITTACODE SERVICE CO-OPERATIVE BANK LTD. CHATHANUR P.O. vs. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/, INCOME TAX OFFICER

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WP(C)/13016/2021HC KeralaKLHC01035209202101 October 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 directed the Appellate Authority (2nd respondent) to consider and pass appropriate orders on the petitioner's appeal (Ext.P2) expeditiously, within six months from the receipt of the judgment. The Court clarified that the Appellate Authority should not insist on the deposit of 20% of the disputed amount, considering the nature of the petitioner's plea. Furthermore, no coercive steps are to be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the appeal is decided. The High Court left the substantive issues of the appeal undecided.

What were the facts?

The petitioner, M/s.Thirmittacode Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, received an assessment order dated 31.03.2021. 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 Co-operative Societies Act. The petitioner filed an appeal before the Commissioner of Income Tax (Appeals), arguing that the assessing officer failed to consider the Supreme Court's judgment in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others, despite the assessment order being issued after this judgment. The writ petition was filed challenging the assessment order.

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 Co-operative Societies Act. Assessee's Contention: The petitioner argued that the assessing officer did not consider the Supreme Court's judgment in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others, which was delivered prior to the assessment order. The petitioner sought to rely on this judgment before the Appellate Authority. Revenue's Contention: No specific contention from the revenue is recorded in the judgment regarding the issues before the High Court.

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 FRIDAY, THE 1ST DAY OF OCTOBER 2021 / 9TH ASWINA, 1943 WP(C) NO. 13016 OF 2021 PETITIONER : M/S.THIRMITTACODE SERVICE CO-OPERATIVE BANK LTD. CHATHANUR P.O., PALAKKAD - 679 537. REPRESENTED BY ITS SECRETARY, SRI. K.K. MANIKANDAN. BY ADVS. T.M.SREEDHARAN (SR.) V.P.NARAYANAN ALAN PRIYADARSHI DEV RESPONDENTS : 1 ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/, INCOME TAX OFFICER NATIONAL E-ASSESSMENT CENTRE, NEW DELHI - 110 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, NEW DELHI - 110 001. BY ADVS. SRI.P.K.R.MENON, SENIOR COUNSEL, GOI(TAXES) JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.10.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 13016 OF 2021 2 BECHU KURIAN THOMAS, J. =-=-=-=-=-=-=-=-=-=-=-=-=-= W.P.(C).No.13016 of 2021 =-=-=-=-=-=-=-=-=-=-=-=-=-= Dated this the 1st day of October, 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 31.03.2021. 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 Co-operative Societies Act.

2.

While assailing the assessment order before the 2nd respondent Appellate Authority, 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] was not considered by the assessing officer though the assessment order was rendered subsequent to the Supreme Court judgment.

3.

Since the petitioner has already preferred an appeal as Ext.P2 and the same is pending consideration before the 2nd

WP(C) NO. 13016 OF 2021 3 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 a direction to the 2nd respondent to consider and pass appropriate orders on Ext.P2, as expeditiously as possible, at any rate, within a period of six months from the date of receipt of a copy of this judgment. It is clarified that the Appellate Authority shall not insist on deposit of 20% of the amount in dispute considering the nature of the case that has been pleaded by the petitioner. Till such time, no coercive steps shall be initiated pursuant to Ext.P1 assessment order. The writ petition is disposed of as above. BECHU KURIAN THOMAS, JUDGE RKM

WP(C) NO. 13016 OF 2021 4

Appendix — schedule of exhibits
APPENDIX OF WP(C) 13016/2021 PETITIONER'S EXHIBITS : Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER AND DEMAND NOTICE DATED 31.03.2021 ALONG WITH COMPUTATION OF INCOME OF AY 2018-19 BY THE 1ST RESPONDENT. Exhibit P2 TRUE COPY OF THE MEMORANDUM OF APPEAL E- FILED DATED 22.04.2021 FOR THE ASSESSMENT YEAR 2018-19 FIELD BEFORE THE 2ND RESPONDENT. Exhibit P3 TRUE COPY OF THE STAY PETITION DATED 22.06.2021 FILED BY THE PETITIONER FOR BY 2018-19 BEFORE THE 2ND RESPONDENT.

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