Ita/32/2016 Of Cherthala South Service Co-Operative Bank Limited 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. 32 of 2016 () ---------------------- AGAINST THE ORDER/JUDGMENT IN ITA 55/2015 of I.T.A.TRIBUNAL,COCHINBENCH DATED APPELLANT(S)/APPELLANT/ACCUSSE: ------------------------------ CHERTHALA SOUTH SERVICE CO-OPERATIVE BANK LIMITED NO.1344 REPRESENTED BY ITS SECRETARY SRI. JOSHY B, CHERTHALA SOUTH ZONE, CHERTHALA, ALAPPUZHA DISTRICT, PIN 688524 BY ADVS. SRI.C.A.JOJO SRI.JACOB CHACKO SRI.MATHEWS JOSEPH RESPONDENT(S)/RESPONDENT/REVENUE: --------------------------------- THE INCOME TAX OFFICER WARD NO.1, DEVASWAM BUILDING, ALAPPUZHA, PIN 688011 R BY SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON18-03-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOTTATHIL B.RADHAKRISHNAN& ANU SIVARAMAN, JJ. ----------------------------------------------- ITA.No.32 of 2016 ----------------------------------------------- Dated this the 18[th] March, 2016JUDGMENT Anu Sivaraman, J. We have heard Sri.C.A.Jojo, learned counsel appearing forthe appellants and Sri.K.M.V.Pandalai, learned standing counselfor 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 in the appeals which are decided through thisjudgment: 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.32/16 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. The learned counsel for the appellants also submitted that 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. The learned counsel for the appellants also submitted that the effect of different High Courts approving clarificationNo.133/2007 issued by the CBDT had also not been considered bythe Tribunal. Questions (A), (B) and (C) were answered as per thejudgment 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) formulated ITA.32/16 herein. A copy of the judgment in ITA.No.212 of 2013 andconnections will stand appended to this judgment. 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. Thequestion of the effect of the decisions of the different High Courtstouching clarification No.133/2007 issued by the CBDT as urgedby the leaned counsel for the appellants is also left open to beconsidered by the Tribunal following this order of remit. THOTTATHIL B.RADHAKRISHNAN JUDGE ANU SIVARAMAN JUDGE vgs18/3