Ita/27/2016 Of M/S Atholi Service Co-Operative Bank v. The 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 FRIDAY, THE 18TH DAY OF MARCH 2016/28TH PHALGUNA, 1937 ITA.No. 27 of 2016 () ---------------------- AGAINST THE ORDER/JUDGMENT IN ITA 332/2015 of I.T.A.TRIBUNAL,COCHINBENCH DATED 08-10-2015 APPELLANT(S): ------------- M/S ATHOLI SERVICE CO-OPERATIVE BANK P.O ATHOLI, KOZHIKODE-673315 BY ADVS.SRI.ANIL D. NAIR SRI.R.SREEJITH KUM.SOUMYA PRAKASH KUM.MEKHALA M.BENNY RESPONDENT(S): --------------- THE INCOME TAX OFFICER WARD 2 (3) KOZHIKODE-673 001. R BY SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ALONG WITHI.T.A.NO. 24 OF 2016 ON 18-03-2016, THE COURT ON THE SAME DAY DELIVEREDTHE FOLLOWING: THOTTATHIL B.RADHAKRISHNAN &ANU SIVARAMAN, JJ. = = = = = = = = = = = = = = = = = = = = = = = I.T.A.No.27 of 2016 = = = = = = = = = = = = = = = = = = = = = = = Dated this the 18[th] day of March, 2016 JUDGMENT Anu Sivaraman, J. 1.We have heard the learned counsel appearing for the appellantand Sri.K.M.V.Pandalai, learned standing counsel for IncomeTax Department.and Sri.K.M.V.Pandalai, learned standing counsel for IncomeTax Department. 2.The matters raised are interlinked with the issues inI.T.A.No.212 of 2013 and connections, as rightly pointed outby the learned counsel on all sides. Under such circumstances,we adopt the following substantial questions of law, whichwere formulated in I.T.A.No. 212 of 2013 and connections, asquestions that arise from the appeals which are bunched upand decided through this judgment:I.T.A.No.212 of 2013 and connections, as rightly pointed outby the learned counsel on all sides. Under such circumstances,we adopt the following substantial questions of law, whichwere formulated in I.T.A.No. 212 of 2013 and connections, asquestions that arise from the appeals which are bunched upand decided through this judgment: A) Whether on the facts and in the circumstances of thecase under consideration, the Tribunal is correct in lawin deciding against the assessee, the issue regardingentitlement for exemption under section 80P, ignoringcase under consideration, the Tribunal is correct in lawin deciding against the assessee, the issue regardingentitlement for exemption under section 80P, ignoring the fact that the assessee is a primary agriculturalcredit society? B) Whether the Tribunal is justified in denying the exemptionunder section 80P of the Income Tax Act, 1961, on themere ground of belated filing f return by the assessee?under section 80P of the Income Tax Act, 1961, on themere ground of belated filing f return by the assessee? C) Whether a return filed by the assessee beyond the periodstipulated under section 139(1)/(4) or section 142(1)/148 can be held as non est in law and invalid for thepurpose of deciding exemption under section 80P of theIncome Tax Act, 1961?stipulated under section 139(1)/(4) or section 142(1)/148 can be held as non est in law and invalid for thepurpose of deciding exemption under section 80P of theIncome Tax Act, 1961? D) Whether the Tribunal is correct in law or is justified inrestricting the provisions for bad and doubtful debt atthe 7.5% of the gross total income, on the reason thatthe assessee is not entitled for the status of ruralbranch to claim 10% of the aggregate averageadvances as bad and doubtful debt, under section 36(1)(viia) of the Income Tax Act, 1961?restricting the provisions for bad and doubtful debt atthe 7.5% of the gross total income, on the reason thatthe assessee is not entitled for the status of ruralbranch to claim 10% of the aggregate averageadvances as bad and doubtful debt, under section 36(1)(viia) of the Income Tax Act, 1961? D) Whether the Tribunal is correct in law or is justified inrestricting the provisions for bad and doubtful debt atthe 7.5% of the gross total income, on the reason thatthe assessee is not entitled for the status of ruralbranch to claim 10% of the aggregate averageadvances as bad and doubtful debt, under section 36(1)(viia) of the Income Tax Act, 1961?restricting the provisions for bad and doubtful debt atthe 7.5% of the gross total income, on the reason thatthe assessee is not entitled for the status of ruralbranch to claim 10% of the aggregate averageadvances as bad and doubtful debt, under section 36(1)(viia) of the Income Tax Act, 1961? 3. Questions (A), (B) and (C) were answered as per the judgmentdated 15.2.2016 in ITA.No.212 of 2013 and connections. Thosefindings and answers to those questions are incorporated inanswer to questions (A), (B) and (C) formulated herein. A copyof the judgment in ITA.No.212 of 2013 and connections willstand appended to this judgment.dated 15.2.2016 in ITA.No.212 of 2013 and connections. Thosefindings and answers to those questions are incorporated inanswer to questions (A), (B) and (C) formulated herein. A copyof the judgment in ITA.No.212 of 2013 and connections willstand appended to this judgment. I.T.A.No.27/16 4.With the aforesaid, we remit this matter for reconsideration bythe Income Tax Appellate Tribunal in the light of the answersrendered herein on substantial questions of law (A), (B) and(C). The Tribunal will thereupon consider the issues relating tothe bad and doubtful debts and the claim of the assessee inthat regard by treating that in all cases where exemptions areclaimed under section 80P and such matters were pendingbefore the assessing authority or before the appellateauthority, including in this appeal, the question of exemptionavailable under Section 80P was still available for decision.the Income Tax Appellate Tribunal in the light of the answersrendered herein on substantial questions of law (A), (B) and(C). The Tribunal will thereupon consider the issues relating tothe bad and doubtful debts and the claim of the assessee inthat regard by treating that in all cases where exemptions areclaimed under section 80P and such matters were pendingbefore the assessing authority or before the appellateauthority, including in this appeal, the question of exemptionavailable under Section 80P was still available for decision. sd/- Thottathil B.Radhakrishnan, Judge sd/- Anu Sivaraman, Judge sj18/3 P.A. to Judge