Ita/14/2014 Of The Azhikode Service Co-Operative Bank Ltd v. Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN TUESDAY, THE 16TH DAY OF FEBRUARY 2016/27TH MAGHA, 1937 ITA.No. 14 of 2014 () ---------------------- AGAINST THE ORDER/JUDGMENT IN ITA 326/2012 of I.T.A.TRIBUNAL,COCHINBENCH DATED 24-05-2013 APPELLANT(S): ------------ THE AZHIKODE SERVICE CO-OPERATIVE BANK LTD., AZHIKODE KANNUR - 670 009, REPRESENTED BY ITS SECRETARY. BY ADVS.SRI.N.J.MATHEWS SRI.V.RAMKUMAR NAMBIAR RESPONDENT(S): -------------- INCOME TAX OFFICER WARD - I, AAYAKAR BHAVAN, KANNUR - 670 006. R BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ALONG WITHITA.No.3 of 2015 AND CONNECTED CASES ON 16-02-2016, THE COURT ON THESAME DAY DELIVERED THE FOLLOWING: ITA.No. 14 of 2014 APPENDIX PETITIONER'S ANNEXURES: ANNEXURE-A: COPY OF ASSESSMENT ORDER DATED 21.12.2011 FOR THEASSESSMENT YEAR 2009-10 ISSUED BY THE RESPONDENT. ANNEXURE-B: COPY OF APPELLATE ORDER DATED 21.9.12 ISSUED BY THECOMMISSIONER OF INCOME TAX (APPEALS)-II, KOZHIKODE. ANNEXURE-C: COPY OF ORDER IN ITA.326/COCH/2012, DATED 24.5.2013,ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. /TRUE COPY/ PS TO JUDGE THOTTATHIL B.RADHAKRISHNAN&ANU SIVARAMAN, JJ. ----------------------------------------------- ITA.Nos.14/2014, 3, 83, 85, 99, 101, 102, 107, 109, 127, 128, 143, 159, 197, 198, 199, 200, 209 215, 220, 227, 229, 230, 231, 235, 236, 242, 243 & 245 of 2015, 5 and 8 of 2016 ----------------------------------------------- Dated this the 16[th] February, 2016 JUDGMENT Thottathil B.Radhakrishnan, J. We have heard the respective learned counsel appearing forthe appellants and Sri.K.M.V.Pandalai, and Sri.ChristopherAbraham, learned standing counsel for Income Tax Department. 2. The matters raised are interlinked with the issues inI.T.A.No.212 of 2013 and connections, as rightly pointed out bythe learned counsel on all sides. Under such circumstances, weadopt the following substantial questions of law, which wereformulated in I.T.A.No. 212 of 2013 and connections, as questionsthat arise from the appeals which are bunched up and decidedthrough this judgment: A) Whether on the facts and in the circumstances ofthe case under consideration, the Tribunal iscorrect in law in deciding against the assessee,the issue regarding entitlement for exemptionunder section 80P, ignoring the fact that theassessee is a primary agricultural credit society?the case under consideration, the Tribunal iscorrect in law in deciding against the assessee,the issue regarding entitlement for exemptionunder section 80P, ignoring the fact that theassessee is a primary agricultural credit society? ITA.3/16 and connected cases B) Whether the Tribunal is justified in denying theexemption under section 80P of the Income TaxAct, 1961, on the mere ground of belated filing ofreturn by the assessee?exemption under section 80P of the Income TaxAct, 1961, on the mere ground of belated filing ofreturn by the assessee? C) Whether a return filed by the assessee beyond theperiod stipulated under section 139(1)/(4) orsection 142(1)/148 can be held as non est in lawand invalid for the purpose of decidingexemption under section 80P of the Income TaxAct, 1961?period stipulated under section 139(1)/(4) orsection 142(1)/148 can be held as non est in lawand invalid for the purpose of decidingexemption under section 80P of the Income TaxAct, 1961? ITA.3/16 and connected cases B) Whether the Tribunal is justified in denying theexemption under section 80P of the Income TaxAct, 1961, on the mere ground of belated filing ofreturn by the assessee?exemption under section 80P of the Income TaxAct, 1961, on the mere ground of belated filing ofreturn by the assessee? C) Whether a return filed by the assessee beyond theperiod stipulated under section 139(1)/(4) orsection 142(1)/148 can be held as non est in lawand invalid for the purpose of decidingexemption under section 80P of the Income TaxAct, 1961?period stipulated under section 139(1)/(4) orsection 142(1)/148 can be held as non est in lawand invalid for the purpose of decidingexemption under section 80P of the Income TaxAct, 1961? D) Whether the Tribunal is correct in law or is justifiedin restricting the provisions for bad and doubtfuldebt at the 7.5% of the gross total income, onthe reason that the assessee is not entitled forthe status of rural branch to claim 10% of theaggregate average advances as bad anddoubtful debt, under section 36(1)(viia) of theIncome Tax Act, 1961?in restricting the provisions for bad and doubtfuldebt at the 7.5% of the gross total income, onthe reason that the assessee is not entitled forthe status of rural branch to claim 10% of theaggregate average advances as bad anddoubtful debt, under section 36(1)(viia) of theIncome Tax Act, 1961? 3. Questions (A), (B) and (C) were answered as per the judgment dated 15.2.2016 in ITA.No.212 of 2013 andconnections. Those findings and answers to those questions areincorporated in answer to questions (A), (B) and (C) formulatedherein. A copy of the judgment in ITA.No.212 of 2013 andconnections will stand appended to this judgment. ITA.3/16 and connected cases With the aforesaid, we remit all these matters forreconsideration by the Income Tax Appellate Tribunal in the lightof the answers rendered herein on substantial questions of law(A), (B) and (C). The Tribunal will thereupon consider the issuesrelating to the bad and doubtful debts and the claim of theassessee in that regard by treating that in all cases whereexemptions are claimed under section 80P and such matters werepending before the assessing authority or before the appellateauthority, including in these appeals, the question of exemptionavailable under section 80P was still available for decision. THOTTATHIL B.RADHAKRISHNAN JUDGE ANU SIVARAMAN JUDGE vgs18/2