THE CHOVVA CO-OPERATIVE RURAL BANK LTD. V. INCOME TAX OFFICER

WP(C)/7903/2020

AI Insights

The case involves The Chovva Co-operative Rural Bank Ltd., which challenged the assessment orders for the years 2013-2014, 2014-2015, and 2016-2017 issued by the Income Tax Officer, Kannur. The petitioner sought relief from the High Court of Kerala to defer recovery proceedings based on these orders and the demand to remit 20% of the assessed tax, as stipulated in the stay order (Exhibit P10). The court's decision was influenced by a previous Full Bench decision and a Division Bench judgment, which found that such a demand from Primary Agricultural Credit Societies under Section 80P of the Income Tax Act was improper.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 753608 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 13-03-2020
• Assessment Year: misc
• Other Referred Cases: Mavilayi Service Co-operative Bank Ltd. v. The Commissioner of Income Tax, Calicut [2020 (2) KHC 2871]
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: S RAJ; C T SUJA; ARJUN RAJ
• Keywords: Appeals; Assessment orders; Income Tax; Recovery proceedings; Stay petitions
• Section: 80P

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN FRIDAY, THE 13TH DAY OF MARCH 2020 / 23RD PHALGUNA, 1941 WP(C).No.7903 OF 2020(K) PETITIONER/S: THE CHOVVA CO-OPERATIVE RURAL BANK LTD. CHOVVA.P.O, KANNUR-670006, REPRESENTED BY ITS SECRETARY IN-CHARGE MAHEENDRAN K BY ADVS. SRI.S.ARUN RAJ SMT.C.T.SUJA SRI.ARJUN S.RAJ RESPONDENT/S: 1 INCOME TAX OFFICER WARD-1 AND TPS, AAYAKAR BHAVAN, KANNUR-670006 2 THE COMMISSIOINER OF INCOME TAX(APPEALS) OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS), NORTH BLOCK, MANACHIRA, KOZHIKODE- 673001 OTHER PRESENT: SC CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.G.ARUN, J. ----------------------------------------------- W.P(C).No. 7903 of 2020 ----------------------------------------------- Dated this the 13th day of March, 2020 JUDGMENT Aggrieved by Exhibits P1, P2 and P3 assessment orders for the years 2013-2014, 2014-2015 and 2016-2017, the petitioner has preferred Exhibits P4, P5 and P6 appeals. The petitioner had also preferred Exhibits P7, P8 and P9 stay petitions, which have been disposed of under Exhibit P10 order, directing the petitioner to remit 20% of the tax assessed, within the time limit prescribed therein. The prayer in the writ petition is for expeditious consideration of the appeals filed by the petitioner and to defer recovery proceedings based on the assessment orders, as also the demand of 20% made under Exhibit P10. 2. Heard the learned Standing Counsel for the Income-T ax Department also. 3. The question as to whether the Primary Agricultural Credit Societies seeking exemption under Section 80P of the Income T ax Act could be compelled to remit a percentage of the tax assessed had come up for consideration before this Court in W.A.No.1536 of WP(C).7903/2020 3 2019 and connected cases. The Division Bench referred to the Full Bench decision in Mavilayi Service Co-operative Bank Ltd. v. The Commissioner of Income Tax, Calicut [2020 (2) KHC 2871] and held the insistence to be bad. In the light of the Division Bench judgment, there cannot be any insistence for payment of a portion of the tax assessed, as has been done under Exhibit P10. Therefore, Exhibit P10 is quashed. The 2nd respondent is directed to consider and pass orders on Exhibits P4, P5 and P6 appeals as expeditiously as possible. Till orders are passed on the appeals, recovery based on Exhibits P1, P2 and P3 assessment orders shall be kept in abeyance. The writ petition is disposed of as above. Sd/- V.G.ARUN, JUDGE vgs16.3 WP(C).7903/2020 4 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 29.03.2016 PASSED BY THE 1ST RESPONDENT AND THE DEMAND NOTICE FOR THE AY 2013-14 EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 19.12.2016 PASSED BY THE 1ST RESPONDENT AND THE DEMAND NOTICE FOR THE AY 2014-15 EXHIBIT P3 TRUE COPY OF THE ASSESSMENT ORDER DATED 18.12.2018 PASSED BY THE 1ST RESPONDENT AND THE DEMAND NOTICE FOR THE AY 2016-17 EXHIBIT P4 THE TRUE COPY OF THE STATUTORY FIRST APPEAL FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2013-14 EXHIBIT P5 THE TRUE COPY OF THE STATUTORY FIRST APPEAL FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2014-15 EXHIBIT P6 THE TRUE COPY OF THE STATUTORY FIRST APPEAL FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2016-17 EXHIBIT P7 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2013-14 EXHIBIT P8 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2014-15 EXHIBIT P9 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER SOCIETY BEFORE THE SECOND RESPONDENT FOR THE AY 2016-17 EXHIBIT P10 TRUE COPY OF THE ORDER DATED 25.2.2020 PASSED BY THE 2ND RESPONDENT DISPOSING THE STAY PETITIONS "