VADAVUCODE FARMERS SERVICE CO-OPERATIVE BANK LTD., NO.651 V. INCOME TAX OFFICER,

WP(C)/8652/2021

AI Insights

The case involves three co-operative banks (Poothrikka Service Co-operative Bank Ltd., Mamala Service Co-operative Bank Ltd., and Vadavucode Farmers Service Co-operative Bank Ltd.) challenging the denial of benefits under Section 80(P) of the Income Tax Act by the Income Tax Officer and other tax authorities. The banks had filed statutory appeals against the assessment orders but were instructed to pay 20% of the tax demand to apply for a stay, which they contested as being contrary to established legal precedents. The court's decision emphasized the need to adhere to previous rulings that protected the banks from immediate tax recovery while their appeals were pending.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 753110 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 31-03-2021
• Assessment Year: misc
• Other Referred Cases: Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut, Electricity Board Employees Co-operative Society Ltd. v. Income Tax Officer, The Angadipuram Service Co-operative Bank Ltd. v. The Commissioner of Income Tax (Appeals)
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: C A JOJO
• Keywords: Assessment Order; Co-operative Banks; Income Tax; Section 80 P; Stay of demand
• Section: 80(P)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943 WP(C).No.8610 OF 2021(A) PETITIONER: POOTHRIKKA SERVICE CO-OPERATIVE BANK LTD. NO.E 344, KOLENCHERY P.O., ERNAKULAM, PIN-682 311, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.C.A.JOJO RESPONDENTS: 1 INCOME TAX OFFICER, WARD-2, INCOME TAX OFFICE, R S ROAD, ALUVA, ERNAKULAM-683 101. 2 COMMISSIONER OF INCOME TAX (APPEALS)-2, OFFICE OF THE COMMISSIONER OF INCOME TAX, CENTRAL REVENUE TOWER, KOCHI-682 018. 3 ADDITIONAL COMMISSIONER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI – 110 005. R1-3 BY SRI.CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.03.2021, ALONG WITH WP(C).8642/2021(E), WP(C).8652/2021(F), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943 WP(C).No.8642 OF 2021(E) PETITIONER: MAMALA SERVICE CO-OPERATIVE BANK LTD. NO.2799, MAMALA P.O., ERNAKULAM,PIN-682 035, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.C.A.JOJO RESPONDENTS: 1 INCOME TAX OFFICER, WARD-2,INCOME TAX OFFICE, R.S.ROAD, ALUVA, ERNAKUAM-683 101. 2 COMMISSIONER OF INCOME TAX (APPEALS)-2, OFFICE OF THE COMMISSIONER OF INCOME TAX, CENTRAL REVENUE TOWER, KOCHI-682 018. R1-2 BY SRI. CHRISTOPHER ABRAHAM, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.03.2021, ALONG WITH WP(C).8610/2021(A), WP(C).8652/2021(F), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943 WP(C).No.8652 OF 2021(F) PETITIONER: VADAVUCODE FARMERS SERVICE CO-OPERATIVE BANK LTD. NO.651, VADAVUKODE P.O., ERNAKULAM, PIN-682 310, REPRESENTED BY ITS MANAGING DIRECTOR. BY ADV. SRI.C.A.JOJO RESPONDENTS: 1 INCOME TAX OFFICER, WARD-3, INCOME TAX OFFICE, R.S.ROAD, ALUVA, ERNAKULAM-683 101. 2 COMMISSIONER OF INCOME TAX (APPEALS)-2, OFFICE OF THE COMMISSIONER OF INCOME TAX, CENTRAL REVENUE TOWER, KOCHI-682 018. 3 ADDITIONAL COMMISSIONER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI-110 005. R1-3 BY SRI. CHRISTOPHER ABRAHAM, STANDING COUNSEL. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.03.2021, ALONG WITH WP(C).8610/2021(A), WP(C).8642/2021(E), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 4 JUDGMENT (W.P.(C) Nos.8610 of 2021,8642 of 2021 and 8652 of 2021) Dated this the 31st day of March 2021 Heard the learned counsel appearing for the petitioners in these writ petitions. 2. It is argued by the learned counsel appearing for the petitioners that petitioners are the co-operative banks and they are entitled for the benefits of Section 80(P)of the Income Tax Act. The learned counsel for petitioners submit that the assessment order denying the benefit of Section 80(P)of the Income Tax Act has been challenged by the petitioners by filing statutory appeals before the 2nd respondent, the Commissioner of the Income Tax (Appeals). However, during pendency of those appeals, the Assessing Officer has communicated to the petitioners that the petitioners should pay 20% of the demand and then apply for stay of demand. This course of action adopted by the respondents, in submission of the learned counsel for the petitioners is contrary to the judgment by the WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 5 Hon'ble Supreme COurt in the matter of Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut, reported in [2019(2) KHC 287]. It is further argued that this Court in a series of judgments has quashed such action on the part of the respondents. 3. The learned Standing Counsel takes notice for respondents and argues that the petitioners can at the most prefer stay petitions and can seek stay in the impugned orders. 4. I have considered the submissions in advance. 5. The question which is pending for adjudication before the appellate authority is whether the petitioners who are co-operative Societies are entitled for deduction under Section 80 (P) of the Income Tax Act. The Assessing Officer has denied the benefit of Section 80 (P) of the Income Tax Act to the petitioner societies. In the matter of Mavilayi Service Co-operative Bank Ltd. WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 6 the question regarding liability of the co-operative societies to pay the income tax assess was decided. The Division Bench of this Court relying on the said judgment in W.A.No. 1536/2019 dated 01-07-2019, has quashed the action on the part of respondents with the direction that the Commissioner of the Income Tax should consider and dispose of the statutory appeals filed by the appellant co-operative societies at the earliest taking note of Full Bench decision in the matter of Mavilayi Service Co-operative Bank Ltd. and till then the recovery and collection of taxes should be kept in abeyance. Similar is the judgment of the learned Single Judge in W.P.(C) No. 5234/2020, the Electricity Board Employees Co-operative Society Ltd. v. Income Tax Officer decided on 26-02-2020. In this view of the matter, in the light of ratio of judgment of this Court, in the matter of The Angadipuram Service Co-operative Bank Ltd. v. The Commissioner of Income Tax (Appeals), the writ petitions are allowed. The 2nd respondent is directed WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 7 to decide the pending appeals expeditiously and till then the respondents are directed to keep the recovery proceedings pursuant to the assessment order in abeyance. Sd/- A.M.BADAR JUDGE SSK/31/03 WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 8 APPENDIX OF WP(C) No.8610/2021 PETITIONER'S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE CERTIFICATE IN THIS REGARD ISSUED BY THE ASSISTANT REGISTRAR(GENERAL) KUNNATHUNADU DATED 23.05.2017. EXHIBIT P2 A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2018-19 DATED 09.02.2021 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P3 A TRUE COPY OF THE DEMAND NOTICE FOR AN AMOUNT OF RS. 70,79,119/- U/S. 156 DATED 09.02.2021 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P4 A TRUE COPY OF THE APPEAL FOR AY 2018-19 BEFORE THE 2ND RESPONDENT DATED 18.12.2019. EXHIBIT P5 A TRUE COPY OF THE STAY PETITION FOR AY 2018-19 BEFORE THE 2ND RESPONDENT DATED 24.03.2021. EXHIBIT P6 A TRUE COPY OF THE NOTICE OF DEMAND DEMANDING 20% OF TAX DATED 24.03.2021 FOR AYS 2018-19 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P7 A TRUE COPY OF THE JUDGMENT IN WA 1536 OF 2019 DATED 01.07.2019. EXHIBIT P8 A TRUE COPY OF THE JUDGMENT IN WP(C) 5234 OF 2020 DATED 26.02.2020. RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 9 APPENDIX OF WP(C) No.8642/2021 PETITIONER'S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE CERTIFICATE IN THIS REGARD ISSUED BY THE ASSISTANT REGISTRAR (GENERAL) KUNNATHUNADU DATED 14.12.2016. EXHIBIT P2 A TRUE COPY OF THE ASSESSMENT ORDER FOR AY- 2017-18 DATED 29.12.2019 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P3 A TRUE COPY OF THE DEMAND NOTICE FOR AN AMOUNT OF RS.1,45,27,306/- U/S. 156 DATED 30.12.2019 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P4 A TRUE COPY OF THE APPEAL FOR AY 2017-18 BEFORE THE 2ND RESPONDENT DATED 22.01.2020. EXHIBIT P5 A TRUE COPY OF THE STAY PETITIONER FOR AY 2017-18 BEFORE THE 2ND RESPONDENT DATED 24.03.2021. EXHIBIT P6 A TRUE COPY OF THE NOTICE OF DEMAND DEMANDING 20 % OF TAX DATED 24.03.2021 FOR AYS 2017-18 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P7 A TRUE COPY OF THE JUDGMENT IN WA 1536 OF 2019 DATED 01.07.2019. EXHIBIT P8 A TRUE COPY OF THE JUDGMENT IN WP(C) 5234 OF 2020 DATED 26.02.2020. RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 10 APPENDIX OF WP(C) No.8652/2021 PETITIONER'S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE CERTIFICATE OF REGISTRATION ISSUED BY THE ASSISTANT REGISTRAR PERUMBAVOOR DATED 4.10.2018. EXHIBIT P2 A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2017-18 DATED 31.12.2019 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P3 A TRUE COPY OF THE DEMAND NOTICE FOR AN AMOUNT OF RS.8,36,62,521/- U/S 156 DATED 31.12.2019 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P4 A TRUE COPY OF THE APPEAL FOR AY 2017-18 BEFORE THE 2ND RESPONDENT DATED 13.1.2020. EXHIBIT P5 A TRUE COPY OF THE STAY PETITION FOR AY 2017-18 BEFORE THE 2ND RESPONDENT DATED 24.3.2021. EXHIBIT P6 A TRUE COPY OF THE ASSESSMENT ORDER FOR AY 2018-19 DATED 17.2.2021 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P7 A TRUE COPY OF THE DEMAND NOTICE FOR AN AMOUNT OF RS.1,90,97,273/- U/S 156 DATED 17.2.2021 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P8 A TRUE COPY OF THE APPEAL FOR AY 2018-19 BEFORE THE 2ND RESPONDENT DATED 8.3.2021. EXHIBIT P9 A TRUE COPY OF THE STAY PETITION FOR AY 2018-19 BEFORE THE 2ND RESPONDENT DATED 24.3.2021. EXHIBIT P10 A TRUE COPY OF THE NOTICE OF DEMAND DEMANDING 20% OF TAX DATED 24.3.2021 FOR AYS 2017-18 AND 2018-19 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P11 A TRUE COPY OF THE JUDGMENT IN W.A.1536 OF 2019 DATED 1.7.2019. RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE "