By Advs.sri.harisankar v. Menonsmt.meera V.menonsmt.k.krishna

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR THURSDAY, THE 08TH DAY OF APRIL 2021 / 18TH CHAITHRA, 1943WP(C).No.8972 OF 2021(V) PETITIONER: THE KODUVAYUR SERVICE CO-OPERATIVE BANK LTD. NO. P-756KODUVAYUR P.O. PALAKKAD 678 501, REPRESENTED BY ITS SECRETARY - IN- CHARGE, SUJEESH K.K., BY ADVS.SRI.HARISANKAR V. MENONSMT.MEERA V.MENONSMT.K.KRISHNA RESPONDENTS: 1THE ADDITIONAL/ JOINT/ DEPUTY/ ASST. COMMISSIONER OF INCOME TAX/ INCOME -TAX OFFICER,NATIONAL E-ASSESSMENT CENTRE, DELHI 110 001. 2NATIONAL FACELESS APPEAL CENTRE,DELHI 110 001, REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER. OTHER PRESENT: SC- SRI JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON08.04.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Dated this the 8th day of April 2021 Heard the learned standing counsel who takes notice for therespondents and the learned counsel appearing for the petitioner. 2.The petitioner is a co-operative society carrying on business of providing credit facility to its members. The petitioner claimedbenefit under Section 80P(2)(a)(i) of the Income Tax Act with respectto the alleged liability. However, the 1[st] respondent by an assessmentorder at Ext.P1, was pleased to disallow the benefits. Feelingaggrieved, the petitioner preferred an appeal at Ext.P3 along with staypetition at Ext.P3(a) before the 2[nd] respondent. Grievance of thepetitioner is to the effect that during the pendency of the appeal alongwith stay petition, the 1[st] respondent has insisted for recovery of theamount determined as per the assessment order at Ext.P1. 3.The learned standing counsel appearing for the respondentsopposed the petition by contending that the petitioner should remitthe amount determined as there is no stay in favour of the petitioner. 4.I have considered the submissions so advanced. In thematter of Mavilayi Service Co-operative Bank v. Commissionerof Income Tax, Calicut, reported in AIR 2021 SC 612, the Hon'bleApex Court has held thus in paragraph 45. “45. To sum up, therefore, the ratio decidendi of CitizenCooperative Society Ltd. (supra), must be given effect to.Section 80P of the IT Act, being a benevolent provision enactedby Parliament to encourage and promote the credit of the co-operative sector in general must be read liberally andreasonably, and if there is ambiguity, in favour of the assessee.A deduction that is given without any reference to anyrestriction or limitation cannot be restricted or limited byimplication, as is sought to be done by the Revenue in thepresent case by adding the word “agriculture” into Section80P(2)(a)(i) when it is not there. Further, section 80P(4) is to beread as a proviso, which proviso now specifically excludes co-operative banks which are co-operative societies engaged inbanking business i.e. engaged in lending money to members ofthe public, which have a licence in this behalf from the RBI.Judged by this touchstone, it is clear that the impugned FullBench judgment is wholly incorrect in its reading of CitizenCooperative Society Ltd. (supra). Clearly, therefore, oncesection 80P(4) is out of harm’s way, all the assessees in thepresent case are entitled to the benefit of the deductioncontained in section 80P(2)(a)(i), notwithstanding that they mayalso be giving loans to their members which are not related toagriculture. Also, in case it is found that there are instances ofloans being given to non-members, profits attributable to suchloans obviously cannot be deducted.” 5.This Court has also in several petitions following the ratio of the above referred ruling has directed the respondent to dispose of the appeal, without insisting for either pre-deposit or recovery as per theassessment order. 6.In this view of the matter, the petition is disposed of withthe following direction. 5.This Court has also in several petitions following the ratio of the above referred ruling has directed the respondent to dispose of the appeal, without insisting for either pre-deposit or recovery as per theassessment order. 6.In this view of the matter, the petition is disposed of withthe following direction. The 2[nd] respondent is directed to decide the pending appeal as well as stay petition, Ext.P3 and P3(a) expeditiously and till disposal ofthe appeal, the respondents are restrained from recovering theamount determined against the petitioner in pursuant to theassessment order at Ext.P1. The petitioner to co-operate with therespondent in disposal of the appeal expeditiously. Nsd//TRUE COPY//PA TO JUDGE SD/- A.M.BADAR JUDGE APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2018-19 DTD. 15.03.2021. EXHIBIT P2TRUE COPY OF THE S.O. NO. 3296(E) ISSUED BYTHE MINISTRY OF FINANCE NEW DELHI. DTD. 25.09.2020. EXHIBIT P2 (A) COPY OF THE S.O. NO. 3297(E) ISSUED BY THE MINISTER OF FINANCE, NEW DELHI DTD. 25.09.2020. EXHIBIT P3COPY OF THE APPEAL FIELD BY THE PETITIONER BEFORE THE 2ND RESPONDENT DTD. 26.03.2021. EXHIBIT P3 (A)COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE ADDITIONAL/JOINT/ASSISTANT COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, DELHI DTD. 26.3.2021.