Corporation of Cochin Employees Co-operative Society Ltd No.331 V. The Income Tax Officer, Ward 2(4) & TPS and Assessment Unit National E-Assessment Center, Income Tax Department, Ministry of Finance and The Principal Chief Commissioner of Income Tax (Kerala)

WP(C)/24210/2023

AI Insights

The case involves the Corporation of Cochin Employees Co-operative Society Ltd, which did not file income tax returns for the assessment years 2018-19 and 2019-20. The Income Tax Department, using the 'INSIGHT' module, identified substantial unreported cash transactions and initiated proceedings under Section 148A of the Income Tax Act, 1961, to reopen the assessments for these years. The petitioner argued for the benefits of mutuality and cited a Supreme Court judgment to claim deductions under Section 80P, which was rejected by the assessing authority. The High Court dismissed the writ petition, emphasizing the necessity of filing returns under Section 139(1) to claim any deductions under Section 80AC(2).

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 817098 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 17-01-2024
• Assessment Year: misc
• Other Referred Cases: M/s. Mavilayi Service Co-operative Bank Ltd. and another v. Commissioner of Income Tax, Calicut and another [2021(1) KHC 303 (SC)], Anshul Jain V. Principal Commissioner of Income Tax and Another [2022] 449 ITR 256 (SC), Anshul Jain v. Principal Commissioner of Income Tax and Another [2022] 449 ITR 251 (P and H), M/s Viswabarathi Medicals V. Income Tax Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: V P NARAYANAN; M M MONAYE; M VARGHESE
• Keywords: Assessment Year; Cash transactions; Co-operative Society; Income Tax; Mutuality; Reopening of assessment
• Section: 139(1); 80P; 148A; 80AC(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 17TH DAY OF JANUARY 2024 / 27TH POUSHA, 1945 WP(C) NO. 24210 OF 2023 PETITIONER/S: CORPORATION OF COCHIN EMPLOYEES CO-OPERATIVE SOCIETY LTD NO.331, CC 16/254, A CORPORATION OF COCHIN EMPLOYEES CO-OP SOCIETY LAD NO. 331, NEAR VILLAGE OFFICE, THOPUMPADY P.O., ERNAKULAM, PIN – 682005, KERALA REPRESENTED BY ITS SECRETARY, V.S SARITHA, BY ADVS. V.P.NARAYANAN M.M.MONAYE M.PAUL VARGHESE RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD 2(4) & TPS, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI, KERALA, PIN - 682018 2 ASSESSMENT UNIT NATIONAL E-ASSESSMENT CENTER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL STADIUM NEW DELHI, REPRESENTED BY ITS INCOME TAX OFFICER, PIN - 110003 3 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (KERALA), CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI,, PIN – 682018. BY ADV CHRISTOPHER ABRAHAM OTHER PRESENT: SRI.CHRISTOPHER ABRAHAM-SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 24210 OF 2023. 2 J U D G M E N T The present writ petition has been filed impugning orders at Exts.P3 and P7 dated 28.4.2022 and 23.2.2023, respectively, passed under clause (d) of Section 148A of the Income Tax Act, 1961 ('Act', for short) for the assessment years 2018-19 and 2019-20, respectively. The petitioner is a co- operative society. The petitioner had not filed returns of its income for the assessment years in question. 2. The information available from the “INSIGHT” module of Income Tax Department would disclose huge cash transactions of a few crores of rupees in both the assessment years. For the failure on the part of the assessee to file valid returns of income and submit a proper and timely explanation with regard to cash transactions, provisions under Section 148A of the Act had been invoked, along with sharing of the information as available in the “INSIGHT”. An opportunity as per WP(C) NO. 24210 OF 2023. 3 Section 148A(b) of the Act was given to the assessee for filing objections as to why notice under Section 148 of the Act for reopening the assessment proceedings for the two assessment years, i.e. 2018-19 and 2019-20, should not be initiated against the petitioner on the basis of the information, which would suggest that the income chargeable to tax had escaped assessment for the relevant assessment years. The petitioner replied to the show cause notices. 3. The assessing authority did not satisfy with the replies. The petitioner took the plea that they were eligible for benefits of mutuality and relied on the judgment of the Hon'ble Supreme Court in M/s.Mavilayi Service Co-operative Bank Ltd. and another v. Commissioner of Income Tax, Calicut and another [2021(1) KHC 303 (SC)] being eligible for 80P deduction. However, the assessing authority rejected the said submission. Without filing returns under Section 139(1) of the Act, no deduction can be claimed by the assessee as WP(C) NO. 24210 OF 2023. 4 provided under Section 80AC(2) of the Act. Therefore, the petitioner was required to file returns of its income under Section 148 of the Act and the petitioner had filed returns of its income for the assessment years 2018-19 and 2019-20. Final orders are yet to be passed on the returns so filed by the petitioner. In view of the above, this Court finds no ground to entertain the present writ petition, which is hereby dismissed. No order as to costs. Pending interlocutory application, if any, in the present writ petition stands dismissed. Sd/- DINESH KUMAR SINGH JUDGE jg WP(C) NO. 24210 OF 2023. 5 APPENDIX OF WP(C) 24210/2023 PETITIONER EXHIBITS Exhibit P1 THE TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 148A(B) OF THE ACT DATED 17.03.2022 Exhibit P2 THE TRUE COPY OF THE REPLY DATED 16.04.2022 SUBMITTED BY THE PETITIONER Exhibit P3 THE TRUE COPY OF THE ORDER UNDER SECTION 148A(D) OF THE ACT DATED 28.04.2022 ISSUED BY THE 1ST RESPONDENT FOR AY 2018-19 Exhibit P4 THE TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT DATED 28.04.2022 FOR AY 2018-19 Exhibit P5 THE TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 148A(B) OF THE ACT DATED 17.01.2023 Exhibit P6 THE TRUE COPY OF THE REPLY FILED BY THE PETITIONER DATED 01.02.2023 Exhibit P7 THE TRUE COPY OF THE ORDER UNDER SECTION 148A(D) OF THE ACT DATED 23.02.2023 ISSUED BY THE 1ST RESPONDENT FOR AY 2019-20 Exhibit P8 THE TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT DATED 09.03.2023 FOR AY 2019-20 Exhibit P9 THE TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 30.05.2022 Exhibit P10 THE TRUE COPY OF THE RETURNS FILED BY THE PETITIONER FOR AY 2019-20 DATED 28.03.2023 WP(C) NO. 24210 OF 2023. 6 Exhibit P11 THE TRUE COPY OF THE INTERIM ORDER PASSED IN W.P(C) NO. 22560/2023 DATED 12.07.2023, THE CASE OF PARAVUR GOVT SERVANTS CO-OPERATIVE BANK LTD RESPONDENT EXHIBITS Exhibit R1(a) Copy of Judgment of Supreme Court in the case of Anshul Jain V. Principal Commissioner of Income Tax and Another dated 2nd September 2022[2022] 449 ITR 256 (SC) Exhibit R1(b) Copy of the Judgment of the Punjab and Hariyana High Court in the case of Anshul Jain v. Principal Commissioner of Income Tax and Another dated 2nd June 2022 [2022] 449 ITR 251 (P and H) Exhibit R1(c) Copy of the Judgment of the Kerala High Court in W.P.(c) No. 37527 of 2022 dated 07.12.2022 in the case of M/s Viswabarathi Medicals V. Income Tax Officer "