KORATTY SERVICE CO-OPERATIVE BANK LIMITED, NO.R.314 vs. THE INCOME TAX OFFICER

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WP(C)/12704/2023HC KeralaKLHC01027988202310 April 2023Bench: HONOURABLE MR. JUSTICE T.R.RAVI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, in its writ jurisdiction, did not decide the merits of the case concerning the eligibility for deduction under Section 80P. Instead, the Court acknowledged that the petitioner had already availed the statutory remedy by filing an appeal before the Commissioner of Income Tax (Appeals). Therefore, the writ petition was disposed of by directing the Appellate Authority to consider and pass orders on the appeal at the earliest. The Court also granted interim relief by directing the respondents not to take any coercive steps against the petitioner pursuant to the assessment order until the disposal of the appeal. No specific finding was made on the validity of the assessment order or the applicability of Section 80P.

What were the facts?

The petitioner, Koratty Service Co-operative Bank Limited, a Primary Agricultural Credit Co-operative Society, is challenging an assessment order (Ext.P1) that rejected its claim for deduction under Section 80P of the Income Tax Act. The rejection was based on the ground that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as defined under the Kerala Co-operative Societies Act. The petitioner has filed an appeal (Ext.P2) before the Commissioner of Income Tax (Appeals), the third respondent, which is currently pending. The petitioner has approached the High Court of Kerala through a writ petition seeking directions for the expeditious disposal of its appeal and to restrain coercive steps by the revenue until the appeal is decided.

What were the issues?

1. Whether the assessment order rejecting the claim for deduction under Section 80P of the Income Tax Act, on the grounds that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act, is sustainable? Assessee's Contention: The assessee relies on the judgment of the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 to challenge the assessment order. The petitioner argues that the assessment order is incorrect and that it is entitled to the deduction under Section 80P. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the writ petition. The assessment order itself indicates the revenue's position that the petitioner failed to satisfy the necessary ingredients for the deduction.

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 T.R.RAVI MONDAY, THE 10TH DAY OF APRIL 2023 / 20TH CHAITHRA, 1945 WP(C) NO. 12704 OF 2023 PETITIONER: KORATTY SERVICE CO-OPERATIVE BANK LIMITED, NO.R.314 KORATTY, THRISSUR,PIN – 680308 REPRESENTED BY ITS SECRETARY SRI. SANIL KUMAR N.G BY ADVS. K.S.HARIHARAN NAIR HARIMA HARIHARAN RAJATH R NATH G.REMADEVI MOHANA KUMAR B. RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2(2), AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSSUR, PIN - 680001 2 ASSESSMENT UNIT NEAC, MAYUR BHAWAN, CONNAUGHT LANE, NEW DELHI, PIN - 110001 3 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, DELHI, C-BLOCK, 4TH FLOOR, S.P.M CIVIC CENTER, NEW DELHI, PIN - 110001 SRI. JOSE JOSEPH, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.04.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 12704 OF 2023 2 T.R. RAVI, J. -------------------------------------------- W.P.(C).No.12704 of 2023 -------------------------------------------- Dated this the 10th day of April, 2023 JUDGMENT The petitioner is a Primary Agricultural Credit Co-operative Society registered under the Kerala Co-operative Societies Act, 1969. The petitioner has been assessed for tax as per Ext.P1 order rejecting the claim for deduction made under Section 80P of Income Tax Act on the ground that there was no evidence to show that the petitioner has satisfied the ingredients of the Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act. Reliance is placed on the judgment of the Hon’ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax; 2021 (1) KLT 485 to challenge the assessment order. The petitioner has preferred Ext.P2 appeal and the same is pending before the 3rd respondent. Since the petitioner has already availed the statutory remedy, this writ petition is disposed of directing the Appellate Authority to consider the appeal and pass orders on the same at the earliest. The respondents shall not take any coercive steps against the petitioner

WP(C) NO. 12704 OF 2023 3 pursuant to Ext.P1 assessment order till the disposal of Ext.P2 appeal. Sd/- T.R.RAVI JUDGE LEK

WP(C) NO. 12704 OF 2023 4 APPENDIX OF WP(C) 12704/2023 PETITIONER EXHIBITS Exhibit P1 COPY OF ASSESSMENT ORDER DATED 13-09-2022 ISSUED BY THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2020-21 Exhibit P2 COPY OF APPEAL MEMORANDUM FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 06-10-2022 AGAINST EXT.P1 Exhibit P3 COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 06-10-2022 IN EXT. P2 APPEAL

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