KARTHEDOM RURAL CO-OPERATIVE SOCIETY LTD. NO. 385 vs. THE INCOME TAX OFFICER

PDF · subscribers
WP(C)/42532/2022HC KeralaKLHC01092189202223 December 2022Bench: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala did not decide the merits of the appeal concerning the rejection of the deduction under Section 80P. Instead, the Court noted that the petitioner had already filed an appeal (Ext.P4) before the Commissioner of Income Tax (Appeals) (NFAC), respondent 2, which was pending. Therefore, the Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider and pass appropriate orders on the pending appeal expeditiously. The Court also granted a stay on coercive steps against the petitioner pursuant to the assessment order (Ext.P2) and demand notice (Ext.P3) until the disposal of the appeal. The specific question of law regarding the interpretation of Section 80P in light of the Mavilayi Service Co-operative Bank Ltd. judgment was not adjudicated upon by the High Court in this writ proceeding.

What were the facts?

The petitioner, Karthedom Rural Co-operative Society Ltd. No. 385, is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. The Income Tax Officer (ITO), respondent 1, issued an assessment order on March 30, 2022, for assessment year 2016-17. The ITO rejected the petitioner's claim for deduction under Section 80P, stating there was no evidence that the petitioner met the criteria of a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act. The petitioner challenged this assessment order before the Commissioner of Income Tax (Appeals) (NFAC), respondent 2, by filing an appeal. The petitioner argued that the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax now governs such cases and renders the assessment incorrect. The writ petition was filed seeking a direction for the timely disposal of this pending appeal.

What were the issues?

1. Whether the assessment order dated March 30, 2022, rejecting the petitioner's claim for deduction under Section 80P for assessment year 2016-17, is valid, considering the petitioner's status as a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act, 1969, and the applicability of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax. Assessee's Contentions: The petitioner argued that the assessment order is incorrect as it fails to consider the binding precedent set by the Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, which governs the field for Primary Agricultural Credit Societies. The petitioner contended that this judgment renders their claim for deduction under Section 80P valid. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue in this writ petition. The assessment order itself, however, rejected the deduction on the ground that the petitioner did not provide evidence to satisfy the ingredients of a Primary Agricultural Credit Society as contemplated under the Kerala Co-operative Societies Act.

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. FRIDAY, THE 23RD DAY OF DECEMBER 2022 / 2ND POUSHA, 1944 WP(C) NO. 42532 OF 2022 PETITIONER/S: KARTHEDOM RURAL CO-OPERATIVE SOCIETY LTD. NO. 385 KARTHEDOM MALIPURAM KOCHI ERNAKULAM REPRESENTED BY ITS SECRETARY, PIN - 682511 BY ADVS. M.SASINDRAN SREEHARI INDUKALADHARAN RESPONDENT/S: 1 THE INCOME TAX OFFICER NON CORP WARD 2(4) AND TPS KOCHI, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KACHERIPADY, KOCHI, KERALA, PIN - 682018 2 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEALS CENTRE (NFAC) NEW DELHI, PIN - 110001 BY ADV JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 42532 OF 2022 2 JUDGMENT

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 30.03.2022, for the assessment yer 2016-17. 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 2nd 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 2nd 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.

WP(C) NO. 42532 OF 2022 3

4.

Accordingly, there will be a direction to the 2nd respondent to consider and pass appropriate orders on Ext.P4, as expeditiously as possible. 5. Till the disposal of the appeal, no coercive steps shall be initiated against the petitioner pursuant to Ext.P2 assessment order and Ext.P3 demand notice.

The writ petition is disposed of as above. Sd/- GOPINATH P. JUDGE ajt

WP(C) NO. 42532 OF 2022 4 APPENDIX OF WP(C) 42532/2022 PETITIONER EXHIBITS Exhibit1 A TRUE COPY OF THE CERTIFICATE OF REGISTRATION DATED 21.12.2015 ISSUED BY THE DEPUTY REGISTRAR OF CO-OPERATIVE SOCIETIES, ERNAKULAM Exhibit P2 A TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2016-2017 DATED 30.03.2022 Exhibit P3 A TRUE COPY OF THE DEMAND NOTICE NO.ITBA/PNL/S/156/2022-23/1046240046(1) DATED 11.10.2022 Exhibit P4 A TRUE COPY OF THE APPEAL MEMORANDUM FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 06.07.2022 Exhibit P4(a) A TRUE COPY OF THE STAY PETITION FILED BEFORE THE 1ST RESPONDENT DATED 18.06.2022 Exhibit P5 A TRUE COPY OF THE JUDGMENT DATED 19.07.2019 IN W.A.NO.1639/2019

More judgments on Section 80P

All 5,069 judgments and leading authorities on Section 80P →

Recent GST High Court judgments

Search GST case law →