Kerala Medical Education Department Staff Housing Co-operative Society Ltd T 1561 V. Assessment Unit Income Tax Department National Faceless Assessment Centre, Delhi and The Income Tax Officer Ward-2 (1) and The Commissioner of Income Tax (Appeals) and The Commissioner of Income Tax (Appeals) National Faceless Appeal Centre, North Block, Delhi

WP(C)/41442/2023

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The Kerala Medical Education Department Staff Housing Co-operative Society Ltd filed a writ petition challenging the demand notice for recovery of assessed tax and the requirement to pay 20% of the demand for a conditional stay in the appeal. The petitioner argued that their income is exempt under Section 80P of the Income Tax Act, 1961, citing a Supreme Court judgment that supported their claim. The respondents contended that the stay on recovery requires a deposit of 20% of the assessed tax. The court, considering the submissions and previous stays on similar grounds, decided to stay the enforcement of the demand notice and directed the appellate authority to resolve the matter expeditiously without the pre-deposit requirement.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 821017 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 11-12-2023
• Assessment Year: misc
• Other Referred Cases: Mavilayi Service Co-operative Bank Ltd & Others vs. Commissioner of Income Tax, Calicut and Another
• Laws Referred To: Income Tax Act, 1961, KCS Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P G JAYASHANKAR
• Assessee Lawyers: ARJUN RAGHAVAN; T HARIKUMAR; POOJA PANKAJ
• Keywords: Assessment Order; Co-operative Society; Income Tax; Stay Petition; Tax Deduction
• Section: 156; 80(P)(2)(d)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE BASANT BALAJI MONDAY, THE 11TH DAY OF DECEMBER 2023 / 20TH AGRAHAYANA, 1945 WP(C) NO. 41442 OF 2023 PETITIONER: KERALA MEDICAL EDUCATION DEPARTMENT STAFF HOUSING CO-OPERATIVE SOCIETY LTD T 1561 REPRESENTED BY SECRETARY DENTAL COLLEGE BUILDING, MEDICAL COLLEGE P.O, THIRUVANANTHAPURAM DISTRICT, PIN – 695 011. BY ADVS. ARJUN RAGHAVAN T.R.HARIKUMAR POOJA PANKAJ RESPONDENTS: 1 ASSESSMENT UNIT INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, ROOM NO 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI, PIN – 110 003. 2 THE INCOME TAX OFFICER WARD-2 (1), OFFICE OF THE INCOME TAX OFFICER, AAYAKAR BHAVAN, KOWDIAR P.O, THIRUVANANTHAPURAM DISTRICT, PIN – 695 003. 3 THE COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM, PIN – 695 003. 4 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, NORTH BLOCK, DELHI, PIN – 110 001. WP(C) NO. 41442 OF 2023 2 BY ADV ADV. P.G. JAYASHANKAR PGJ OTHER PRESENT: GP SMT M. M JASMINE THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 41442 OF 2023 3 JUDGMENT (Dated this the 11th day of December, 2023) The present writ petition has been filed impugning Ext.P3 demand notice for recovery of the assessed tax as well as 20% of the demand for conditional stay in the appeal. 2. The petitioner is a co-operative society registered as per the provisions of the KCS Act. Learned counsel for the petitioner submits that, the petitioner society is entitled for a deduction of the income under Section 80(P) (2) (d) of the Income Tax Act, 1961. For the assessment year 2020-21, the petitioner filed return after claiming a deduction under Section 80P of the Income Tax Act for the reason that the petitioner being a co-operative society, their income is exempted under the provisions of Section 80P. However, the assessing authority have rejected the claim of the petitioner and passed the assessment order. Learned counsel further submits that the petitioner’s case is covered by the judgment WP(C) NO. 41442 OF 2023 4 of the Hon’ble Supreme Court in Mavilayi Service Co- operative Bank Ltd & Others vs. Commissioner of Income Tax, Calicut and Another, [2021 (1) KHC 303]. He further submitted that even the interest which has been earned by the petitioner is from the District Co-operative Bank, which is run by the Co-operative Society. Learned counsel for the petitioner submits that the demand of 20% assessed tax for conditional stay is highly prejudicial in the interest of justice. The case of the petitioner is squarely covered by the judgment of the Hon’ble Supreme Court as mentioned above. He therefore submits that the appellate authority ie., the 3rd respondent be directed to decide the appeal without insisting upon the payment of 20% of the tax as assessed by Ext.P2. 3. However, learned counsel for the respondents submits that for staying the recovery, the petitioners have to deposit 20% of the assessed tax and without making payment of the 20% of the demand, the stay cannot be granted in appeal. He further submits that so far as legal contentions of the learned counsel for the petitioner is concerned, this Court may not WP(C) NO. 41442 OF 2023 5 record any finding inasmuch as that would prejudice the case of the revenue before the appellate authority. 4. Heard the learned counsel for the petitioner as well as the learned Standing Counsel appearing for the respondents. 5. Considering the aforesaid submissions made above and also taking note of the fact that this Court has stayed the recovery of tax for the assessment year 2020-21 pending appeal, I deem it appropriate to dispose of, the Writ petition with a direction to the appellate authority to decide the appeal, within a period of three months without insisting upon pre-deposit of 20% of the assessed tax. The petitioner should co-operate in deciding the appeal expeditiously. Till the appeal is decided, the demand notice, Ext.P3 shall not be enforced. Sd/- BASANT BALAJI, JUDGE SRJ WP(C) NO. 41442 OF 2023 6 APPENDIX OF WP(C) 41442/2023 PETITIONER EXHIBITS Exhibit-P1 A TRUE COPY OF THE REPLY DATED 05-09-2022 SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. Exhibit-P2 A TRUE COPY OF ASSESSMENT ORDER DATED 09- 09-2022, FOR THE ASSESSMENT YEAR 2020-2021 ISSUED BY THE 1ST RESPONDENT. Exhibit-P3 A TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 156 OF THE INCOME TAX ACT DATED 09-09-2022. Exhibit-P4 A TRUE COPY OF THE ONLINE APPEAL DATED 08- 10-2022 ALONG WITH GROUNDS OF APPEAL AND STATEMENT OF FACTS FILED BEFORE THE 4TH RESPONDENT, AGAINST EXT-P2 ASSESSMENT ORDER. Exhibit-P5 A TRUE COPY OF THE ACKNOWLEDGEMENT OF THE APPEAL. Exhibit-P6 A TRUE COPY OF THE COMMUNICATION DATED 08- 11-2023 ISSUED BY THE 2ND RESPONDENT. Exhibit-P7 A TRUE COPY OF THE STAY PETITION DATED 27- 11-2023 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. . Exhibit-P8 A TRUE COPY OF THE JUDGMENT DATED 19-07- 2019 IN W.A NO.1639 OF 2019 OF THIS HON'BLE COURT. Exhibit-P9 A TRUE COPY OF THE JUDGMENT DATED 14-01- 2022 IN WP(C) NO.30579 OF 2021 OF THIS HON'BLE COURT. Exhibit-P10 A TRUE COPY OF JUDGMENT DATED 23-02-2022 IN WP(C) 6109 OF 2022. WP(C) NO. 41442 OF 2023 7 Exhibit-P11 A TRUE COPY OF JUDGMENT DATED 5-09-2023 IN WP(C) 29098 OF 2023. "