CHITHARA SERVICE CO-OPERATIVE BANK LTD. NO. 2818 vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/6109/2022HC KeralaKLHC01013181202223 February 2022Bench: 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 case. Instead, it acknowledged that the petitioner had already preferred an appeal (Ext.P2) before the 3rd respondent (National Faceless Appeal Centre, Delhi) and that this appeal was pending consideration. Therefore, 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 3rd respondent to consider and pass appropriate orders on Ext.P2 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. The issue of whether the deduction under Section 80P was rightly denied was expressly left undecided by the High Court.

What were the facts?

The petitioner, Chithara Service Co-operative Bank Ltd., a Primary Agricultural Credit Society, received an assessment order dated March 17, 2021. The assessing officer rejected the petitioner's claim for deduction under Section 80P, stating that there was insufficient evidence to establish the petitioner's status as a Primary Agricultural Credit Society as defined by the Kerala Co-operative Societies Act, 1969. The petitioner subsequently filed an appeal before the National Faceless Appeal Centre, Delhi (3rd respondent). In this appeal, the petitioner intended to argue that the assessing officer failed to 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.

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 properly consider the petitioner's status as a Primary Agricultural Credit Society. Assessee's contentions: The petitioner argued that the assessment order was passed subsequent to the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, and this crucial judgment was not considered by the assessing officer. The petitioner is a Primary Agricultural Credit Society registered under the Kerala Co-operative Societies Act, 1969. Revenue's contentions: The judgment does not record any specific contentions made by the revenue in response to the writ petition.

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 BECHU KURIAN THOMAS WEDNESDAY, THE 23RD DAY OF FEBRUARY 2022 / 4TH PHALGUNA, 1943 WP(C) NO. 6109 OF 2022 PETITIONER: CHITHARA SERVICE CO-OPERATIVE BANK LTD. NO. 2818 SERVICE CO-OPERATIVE BANK BUILDING, MAIN ROAD, CHITHARA P O, KOLLAM-691559, REPRESENTED BY ITS SECRETARY SUBHA C. C. BY ADVS. K.P.PRADEEP HAREESH M.R. SANAND RAMAKRISHNAN RASMI NAIR T. T.T.BIJU T.THASMI M.J.ANOOPA RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110001, REPRESENTED BY ITS CHAIRMAN. 2 THE ADDITIONAL COMMISSIONER OF INCOME TAX NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003. 3 NATIONAL FACELESS APPEAL CENTRE DELHI, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI-110003. OTHER PRESENT: ADV,CHRISTOPHER ABRAHAM-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.02.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 6109 OF 2022 2 BECHU KURIAN THOMAS, J .............................................… W.P.(C) NO. 6109 OF 2022 …........................................ Dated this the 23rd day of February, 2022

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 17.03.2021. 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 Kerala Co-operative Societies Act. 2. While assailing the assessment order before the 3rd 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. 6109 OF 2022 3 3. Since the petitioner has already preferred an appeal as Ext.P2 and the same is pending consideration before the 3rd 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 3rd respondent to consider and pass appropriate orders on Ext.P2, 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. Sd/- BECHU KURIAN THOMAS JUDGE AJM

WP(C) NO. 6109 OF 2022 4 APPENDIX OF WP(C) 6109/2022 PETITIONER’S EXHIBITS : Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER NO.ITBA/AST/S/143(3)/2020- 21/1031560665 (1) DATED 17.03.2021 ISSUED FOR THE YEAR 2018-19 BY THE 2ND RESPONDENT TO THE PETITIONER. Exhibit P2 TRUE COPY OF THE APPEAL DATED 16.02.2022 FILED FOR THE YEAR 2018- 19 BEFORE THE 3RD RESPONDENT. Exhibit P3 TRUE COPY OF THE ASSESSMENT ORDER NO.ITBA/AST/S/156/2020- 21/1031560750(1) DATED 17.03.2021 ISSUED FOR THE YEAR 2018-19 BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE STAY APPLICATION FILED ON 16.02.2022 BEFORE THE 3RD RESPONDENT IN EXT.P2 APPEAL. RESPONDENT’S EXHIBITS : NIL AJM //TRUE COPY// PA TO JUDGE

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