CHENNITHALA THRIPERUMTHURA SERVICE CO-OPERATIVE BANK LTD vs. UNION OF INDIA

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WP(C)/40690/2022HC KeralaKLHC01088255202215 December 2022Bench: HONOURABLE MR. JUSTICE GOPINATH P.5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the merits of the assessment or the appeal. Instead, the Court noted that the petitioner had already preferred an appeal (Ext.P4) before the Income Tax Appellate Tribunal (4th respondent), which was pending. Consequently, the Court deemed it appropriate to dispose of the writ petition by directing the Tribunal to consider and pass appropriate orders on the pending appeal expeditiously, within a period of six months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P2) until the disposal of the appeal. The issue of whether the petitioner satisfied the ingredients of a Primary Agricultural Credit Society and the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment were left to be decided by the Tribunal.

What were the facts?

The petitioner, Chennithala Thrip<bos>erumbathura Service Co-operative Bank Ltd., is a Primary Agricultural Credit Society. The Assessing Officer issued an assessment order on September 21, 2022, rejecting the petitioner's claim for deduction under Section 80P. The reason for rejection was the alleged lack of evidence demonstrating that the petitioner met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner appealed this assessment order before the Commissioner of Income Tax (Appeals), arguing that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax now governs the matter and renders the assessment incorrect. The appeal (Ext.P4) was pending before the Income Tax Appellate Tribunal (4th respondent). The petitioner filed a writ petition seeking a time-bound disposal of their appeal.

What were the issues?

1. Whether the assessment order dated 21-09-2022, which rejected the petitioner's claim for deduction under Section 80P on the grounds that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society, is legally sustainable, considering the judgment of the Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax? Assessee's Contention: The assessee contended that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax governs the field and renders the assessment order incorrect. The assessee relied on this Supreme Court judgment. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the assessee's arguments regarding the Supreme Court judgment. The assessment order itself rejected the deduction based on the Assessing Officer's finding that the petitioner did not satisfy the ingredients of a Primary Agricultural Credit Society.

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 GOPINATH P. THURSDAY, THE 15TH DAY OF DECEMBER 2022 / 24TH AGRAHAYANA, 1944 WP(C) NO. 40690 OF 2022 WRIT PETITIONER: CHENNITHALA THRIPERUMTHURA SERVICE CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY, CHENNITHALA THRIPERUMTHURA SCB LTD. 3553, CHENNITHALA P.O., MAVELIKKARA, ALAPPUZHA, KERALA , PIN - 690105 BY ADVS. GEORGE VARGHESE(PERUMPALLIKUTTIYIL) MANU SRINATH NIMESH THOMAS RESPONDENTS: 1 UNION OF INDIA REPRESENTED BY ITS SECRETARY IN THE MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, CENTRAL SECRETARIAT, NEW DELHI, PIN - 110001 2 THE CENTRAL BOARD OF DIRECT TAXES REPRESENTED BY ITS CHAIRMAN, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, CENTRAL SECRETARIAT, NEW DELHI , PIN - 110001 3 PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX KERALA REGION MINISTRY OF FINANCE, GOVERNMENT OF INDIA, CENTRAL REVENUE BUILDINGS, I. S. PRESS ROAD, KOCHI , PIN - 682018 4 COMMISSIONER OF INCOME TAX (APPEALS),

W.P.(C) No. 40690 OF 2022 -:2:- NATIONAL FACELESS APPEAL CENTRE, NORTH BLOCK, DELHI , PIN - 110001 5 ASSESSING OFFICER ASSESSMENT UNIT, INCOME TAX DEPARTMENT, ALAPPUZHA, GENERAL HOSPITAL JUNCTION, KODIVEEDU, ALAPPUZHA, KERALA , PIN - 688011 6 INCOME TAX OFFICER INCOME TAX OFFICE, OFFICE OF ADDL. CIT, THIRUVALLA RANGE, VAISHNAVAM ARCADE, T K ROAD, THIRUVALLA, KERALA , PIN - 689101 OTHER PRESENT: ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P.(C) No. 40690 OF 2022 -:3:- J U D G M E N T Dated this the 15 th day of December, 2022 Petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Ext.P2 order of assessment was issued against the petitioner on 21-09-2022. 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 4th 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] now governs the field thereby rendering the assessment itself as incorrect. 3. Since the petitioner has already preferred an appeal as Ext.P4 and the same is pending consideration before the Income

W.P.(C) No. 40690 OF 2022 -:4:- Tax Appellate Tribunal (4th respondent), I deem it fit that this writ petition be disposed of directing the Tribunal to consider the appeal in a time bound manner. 4. Accordingly, there will be a direction to the 4th respondent to consider and pass appropriate orders on Ext.P4, as expeditiously as possible with a period of six months from the date of receipt of a copy of a this judgment. 5. Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Exts.P2. The writ petition is disposed of as above. Sd/- GOPINATH P.

JUDGE mtk 15/12/2022

W.P.(C) No. 40690 OF 2022 -:5:- APPENDIX OF WP(C) 40690/2022 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF CERTIFICATE OF REGISTRATION NO. 3553 DATED 10.04.1956 ISSUED BY THE REGISTRAR OF CO-OPERATIVE SOCIETIES Exhibit P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 21.09.2022 ISSUED BY THE LD. ASSESSING OFFICER - 5TH RESPONDENT Exhibit P3 TRUE COPY OF THE NOTICE OF DEMAND UNDER SECTION 156 OF THE INCOME TAX ACT, 1961 ISSUED BY THE LD. ASSESSING OFFICER - 5TH RESPONDENT TO THE PETITIONER Exhibit P4 TRUE COPY OF THE APPEAL DATED 21.10.2022 PREFERRED BY THE PETITIONER BEFORE 4TH RESPONDENT ALONG WITH THE COPY OF THE STAY PETITION Exhibit P5 TRUE COPY OF THE LETTER NO. ITBA/RCV/F/17/2022-23/1047549550(1) DATED 22.11.2022 ISSUED BY THE 6TH RESPONDENT ITO TO THE PETITIONER Exhibit P6 TRUE COPY OF THE JUDGMENT DATED 19.07.2019 IN W.A. NO.1639/2019 & CONNECTED MATTERS PASSED BY THE DIVISION BENCH OF THIS HON'BLE COURT

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