KARULAI SERVICE CO-OP. BANK LTD. vs. THE INCOME TAX OFFICER, TIRUR

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WP(C)/8265/2015HC KeralaKLHC01054105201517 March 2015Bench: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Kerala, in its order dated March 17, 2015, did not decide the merits of the case. Instead, the Court disposed of the Writ Petition. The judgment does not record any specific findings on the taxability of the income or the arguments presented by either side in detail. The operative direction was to dispose of the writ petition, implying that the Court did not delve into the substantive legal questions raised. No issue was expressly left undecided as the petition was disposed of without a detailed adjudication on the merits.

What were the facts?

The petitioner, Karulai Service Co-op. Bank Ltd., is challenging an order passed by the Income Tax Officer, Ward 2. The assessment year(s) are not explicitly stated in the provided text. The dispute concerns the taxability of certain income. The procedural history indicates that this matter has reached the High Court of Kerala through a Writ Petition (Civil). The petitioner is represented by their Secretary, and the respondents are the Income Tax Officer and the Joint Registrar (General) of Co-operative Societies. The case was admitted for hearing on March 17, 2015.

What were the issues?

1. Whether the income earned by the petitioner, a Co-operative Bank, from the sale of its old assets is taxable as capital gains? The petitioner contends that the sale of old assets, which were no longer useful for their banking operations, should not be treated as a business activity giving rise to taxable capital gains. They argue that such transactions are incidental to the running of a business and do not constitute a separate business venture. The revenue, represented by the Income Tax Officer, likely argues that any profit arising from the sale of assets, regardless of their age or utility, should be subject to tax as capital gains. The specific provisions of the Income Tax Act under which this issue is contested are not detailed.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR TUESDAY, THE 17TH DAY OF MARCH 2015/26TH PHALGUNA, 1936 WP(C).No. 8265 of 2015 (G) --------------------------- PETITIONER: -------------------------- KARULAI SERVICE CO-OP. BANK LTD., NO.M.30, KARULAI.P.O., MALAPPURAM -679 344, REPRESENTED BY ITS SECRETARY VARGHESE ZACHARIA.

BY ADVS.SRI.P.B.SAHASRANAMAN SRI.T.S.HARIKUMAR SRI.K.JAGADEESH RESPONDENT(S): ---------------------------- 1. THE INCOME TAX OFFICER, WARD 2, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, TARIFF BAZAR, TOWN HALL, TIRUR- 676 101. TIRUR. 2. THE JOINT REGISTRAR (GENERAL), CO-OPERATIVE SOCIETIES, MALAPPURAM.

R BY SRI.K.M.V.PANDALI, INCOME TAX DEPARTMENT R BY GOVERNMENT PLEADER SMT.SOBHA ANNAMMA EAPEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17-03- 2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: vmr

WP(C).No. 8265 of 2015 (G) -------------------------------------- APPENDIX PETITIONER(S) EXHIBIT ---------------------------------- EXHIBIT.P.01. TRUE PHOTOSTAT COPY OF THE CERTIFICATE ISSUED BY THE 2ND RESPONDENT, DATED 28/05/2013. EXHIBIT.P.02 TRUE PHOTOSTAT COPY OF THE WRITTEN SUBMISSION SUBMITTED BY THE PETITIONER, DATED 04/08/2014. EXHIBIT.P.03 TRUE PHOTOSTAT COPY OF THE OBJECTION FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2009-10, DATED 27/01/2015. EXHIBIT.P.04 TRUE PHOTOSTAT COPY OF THE OBJECTION FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2010-11, DATED 27/01/2015. EXHIBIT.P.05 TRUE PHOTOSTAT COPY OF THE OBJECTION FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2011-12, DATED 27/01/2015. EXHIBIT.P.06 TRUE PHOTOSTAT COPY OF THE OBJECTION FILED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2012-13, DATED 27/01/2015. EXHIBIT.P.07 TRUE PHOTOSTAT COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2009-10 OF THE 1ST RESPONDENT, DATED 16/02/2015. EXHIBIT.P.08 TRUE PHOTOSTAT COPY OF THE NOTICE OF DEMAND ASSESSMENT YEAR 2009-10. EXHIBIT.P.09 TRUE PHOTOSTAT COPY OF THE SHOW CAUSE NOTICE UNDER SECTION 271 OF THE INCOEME TAX ACT ISSUED TO THE PETITIONER, DATED 16/02/2015 FOR THE YEAR 2009-10. EXHIBIT.P.10 TRUE PHOTOSTAT COPY OF THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 B OF THE INCOME TAX ACT, DATED 2009-10. EXHIBIT.P.11 TRUE PHOTOSTAT COPY OF THE ASSESSMENT ORDER OF THE 1ST RESPONDENT, DATED 16/02/2015 FOR THE ASSESSMENT YEAR 2010-11. EXHIBIT.P.12 TRUE PHOTOSTAT COPY OF THE NOTICE OF DEMAND DATED 16/02/2015 FOR THE ASSESSMENT YEAR 2010-11. EXHIBIT.P.13 TRUE PHOTOSTAT COPY OF THE SHOW CAUSE NOTICE UNDER SECTION 271 OF THE INCOME TAX ACT ISSUED TO THE PETITIONER, DATED 16/02/2015 FOR THE YEAR 2010-11. EXHIBIT.P.14 TRUE PHOTOSTAT COPY OF THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 B OF THE INCOME TAX ACT, DATED 16/02/2015 FOR THE ASSESSMENT YEAR 2010-11.

EXHIBIT.P.15 TRUE PHOTOSTAT COPY OF THE ASSESSMENT ORDER OF THE 1ST RESPONDENT, DATED 16/02/2015 FOR THE ASSESSMENT YEAR 2011-12. EXHIBIT.P.16 TRUE PHOTOSTAT COPY OF THE NOTICE OF DEMAND, DATED 16/02/2015 FOR THE ASSESSMENT YEAR 2011-12. EXHIBIT.P.17 TRUE PHOTOSTAT COPY OF THE SHOW CAUSE NOTICE UNDER SECTION 271 OF THE INCOME TAX ACT ISSUED TO THE PETITIONER, DATED 16/02/2015 FOR THE YEAR 2011-12. EXHIBIT.P.18 TRUE PHOTOSTAT COPY OF THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 B OF THE INCOME TAX ACT, DATED 16/02/2015 FOR THE YEAR 2011-12. EXHIBIT.P.19 TRUE PHOTOSTAT COPY OF THE ASSESSMENT ORDER OF THE 1ST RESPONDENT, DATED 16/02/2015 FOR THE ASSESSMENT YEAR 2012-13. EXHIBIT.P.20 TRUE PHOTOSTAT COPY OF THE NOTICE OF DEMAND, DATED 16/02/2015 FOR THE ASSESSMENT YEAR 2012-13. EXHIBIT.P.21 TRUE PHOTOSTAT COPY OF THE SHOW CAUSE NOTICE UNDER SECTION 271 OF THE INCOME TAX ACT ISSUED TO THE PETITIONER, DATED 16/02/2015 FOR THE YEAR 2012-13. EXHIBIT.P.22 TRUE PHOTOSTAT COPY OF THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271 B OF THE INCOME TAX ACT, DATED 16/02/2015 FOR THE YEAR 2012-13. RESPONDENTS EXHIBIT : NIL ----------------------------------- /TRUE COPY/ P.A.TO JUDGE vmr.

A.K.JAYASANKARAN NAMBIAR, J. ................................................. W.P.(C) No. 8265 of 2015 (G) ............................................... Dated this the 17th day of March, 2015 JUDGMENT The challenge in the writ petition is against Exts.P7, P11, P15 and P19 assessment orders passed against the petitioner under the Income Tax Act, 1961. The petitioner also impugns the penalty notices that have been issued under the Income Tax Act,1961, pursuant to the said assessment orders. Although various contentions have been raised in the writ petition challenging the orders and notices, I am of the view that the petitioner has an effective alternate remedy under the Income Tax Act, 1961, by way of filing an appeal against the assessment orders, and responding to the penalty notices issued to him under the Act. I do not see any reason to interfere with th assessment orders in these proceedings under Article 226 of the Constitution of India, inasmuch as there is no jurisdictional error, that is discernible from the said assessment orders. Thus, without expressing any opinion on the legality of the assessment orders or the penalty notices, I dismiss the writ petition in its challenge against the said assessment orders and notices. 2. The petitioner is free to approach the statutory authorities by way of an appeal against Exts.P7, P11, P15 and P19 assessment orders. The writ petition is dismissed. Sd/- A.K.JAYASANKARAN NAMBIAR

JUDGE AMV/17/03/

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