THRICKODITHANAM SERVICE CO-OPERATIVE BANK LTD. V. THE COMMISSIONER OF INCOME TAX (APPEALS)-I

WP(C)/12293/2014

AI Insights

The case involves the Thrickodithanam Service Co-operative Bank Ltd., which is a Primary Agricultural Credit Society, appealing against the disallowance of deductions under Section 80P of the Income Tax Act, 1961, for the assessment years 2008-2009, 2010-2011, and 2011-2012. The petitioner argued that their primary business is to provide financial accommodation to members for agricultural activities, and thus, they are entitled to the deductions claimed. The Income Tax Officer had disallowed these deductions, leading to the appeals. The Commissioner of Income Tax (Appeals) was urged to expedite the appeals without further conditions on tax payments, citing the financial strain such payments would impose on the society. The court's decision aimed to balance the petitioner's operational capacity with the procedural requirements of tax payment.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 699730 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 16-05-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: A KUMAR; P J ANILKUMAR; G MINI; P S SREE PRASAD
• Keywords: Agricultural activities; Assessment Order; Deduction; Financial accommodation; Income Tax
• Section: 80P

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE FRIDAY, THE 16TH DAY OF MAY 2014/26TH VAISAKHA, 1936 WP(C).No. 12293 of 2014 (J) ---------------------------- PETITIONER: -------------------------- THRICKODITHANAM SERVICE CO-OPERATIVE BANK LTD., THRICKODITHANAM P.O, CHANGANACHERRY, KOTTAYAM 688 105, REPRESENTED BY ITS SECRETARY AND AUTHORIZED SIGNATORY , M MR. RAGHUKUMAR M.R. BY ADVS.SRI.A.KUMAR SRI.P.J.ANILKUMAR SMT.G.MINI SRI.P.S.SREEPRASAD RESPONDENTS: ---------------------------- 1. THE COMMISSIONER OF INCOME TAX (APPEALS)-I, AAYAKAR BHAVAN, KOWDIYAR, THIRUVANANTHAPURAM 695 003. 2. THE INCOME TAX OFFICER, WARD NO 4, THIRUVALLA. R1 & R2 BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16-05-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WP(C).No. 12293 of 2014 (J) ------------------------------------------ APPENDIX PETITIONER(S)' EXHIBITS: --------------------------------------- EXHIBIT P1 TRUE COPY OF THE CERTIFICATE ISSUED BY THE JOINT REGISTRAR OF CO- OPERATIVE SOCIETIES TO THE PETITIONER DATED 09-12-2011. EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 22-07-2013 FOR THE ASSESSMENT YEAR 2008-09. EXHIBIT P3 TRUE COPY OF THE MEMORANDUM OF APPEAL FILED BY THE PETITIONER DATED 03-09-2013. EXHIBIT P4 TRUE COPY OF THE APPLICATION FOR STAY FILED BY THE PETITIONER DATED 06-09-2013. EXHIBIT P5 TRUE COPY OF THE ASESSMENT ORDER DATED 13-03-2013 FOR THE ASSESSMENT YEAR 2010-11. EXHIBIT P6 TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 04-04-2013. EXHIBIT P7 TRUE COPY OF THE COMMUNICATION DATED 26-03-2014 WITHDRAWING THE ORDER. EXHIBIT P8 TRUE COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2011-2012 DATED 20/03/2014. EXHIBIT P9 TRUE COPY OF THE APPEAL MEMORANDUM FOR THE ASSESSMENT YEAR 2011-12 DATED 25-03-2014. EXHIBIT P10 TRUE COPY OF THE STAY PETITION FOR THE ASSESSMENT YEAR 2011-12 DATED 25-03-2014. EXHIBIT P11 TRUE COPY OF THE BALANCE SHEET (AUDIT CERTIFICATE AND AUDIT MEMORANDUM) FOR THE FINANCIAL YEAR 2012-13 DATED 31-01-2014. RESPONDENT(S)' EXHIBITS: ----------------------------------------- N I L /TRUE COPY/ P.S.TO JUDGE Kss A.MUHAMED MUSTAQUE, J. ~~~~~~~~~~~~~~~~~~~~~~~~~ W.P.(C).No.12293 of 2014 ~~~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 16th day of May, 2014 J U D G M E N T The petitioner is a Primary Agricultural Credit Society. They filed appeals against assessment order for the year 2008-2009, 2010-2011 and 2011-2012 before first respondent-Commissioner of Income Tax. The grievance of the petitioner is that while assessing, the second respondent disallowed the deduction claimed by the petitioner under Section 80P of the Income Tax Act, 1961. The petitioner highlights that the business of the petitioner's society in principal and primarily is to provide financial accommodation to its members for the purposes connected with agricultural activities and, therefore, denial for claim of deduction under 80P of the Income Tax Act is unsustainable. 2. Heard the learned counsel for the petitioner and the learned Standing Counsel. 3. The appeals filed by the petitioner are pending before the first respondent as Exts.P3, P6 and P9. The petitioner submits that they have remitted a sum of Rs.19 lakhs towards 50% of the demand raised for the assessment year 2010-11. Therefore, it is prayed that the appeals filed by W.P.(C).No.12293/2014 -:2:- the petitioner for the assessment years 2008-2009, 2010-2011 and 2011-2012 may be directed to be disposed of expeditiously and without insisting for any condition for payment of tax in view of the 50% of the amount paid for the assessment year 2010-2011. The learned Standing Counsel opposed the said prayer. It is submitted by the learned Standing Counsel that without making 50% payment of the demand for the assessment years 2008-2009 and 2011-2012, the appeals cannot be taken up. 4. The petitioner is a Primary Agricultural Credit Society. The petitioner's submission that any insistance for payment of 50% of the demand for the assessment years 2008-2009 and 2011-2012 would result in stoppage of operation of their Society and it is beyond their capacity to make such payment. 5. Considering the short question that is involved which is common in all these appeals and that the total demand for all three assessment years would count to Rs.78,53,040/-, I am of the view, the petitioner should pay 30% of the total demand and taking note of the fact that the petitioner has already paid Rs.19 lakhs, they can be directed to pay Rs.7 lakhs which would make up 30% of the amount demanded for all the W.P.(C).No.12293/2014 -:3:- three assessments. In the result, there shall be a direction to dispose Exts.P3, P6 and P9 appeals by the first respondent, within a period of three months from the date of production of a copy of this judgment before the first respondent, on condition that the petitioner remits Rs.7 lakhs altogether towards assessment years 2008-2009 and 2011-2012. It will be proper for the respondents to adjust the amounts paid and to be paid by the petitioner in an appropriate manner subject to the final decision in the matter. Till disposal of the appeals, all coercive steps pursuant to Ext.P2, P5 and P8 to recover the amount are stayed. It is made clear, on failure to make payment as above, it is open for the respondents to initiate recovery proceedings against the petitioner. This writ petition is disposed of as above. Sd/- A.MUHAMED MUSTAQUE, JUDGE ms "