J U D G M E N T v. The Judgment In Peroorkada (Supra

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 28 DAY OF NOVEMBER 2022 / 7TH AGRAHAYANA, 1944 WP(C) NO.34316 OF 2022 PETITIONER: CHERTHALA TALUK AGRICULTURAL CREDIT CO-OPERATIVE SOCIETY H.W 11, CHERTHALA P.O, ALAPPUZHA-688524REPRESENTED BY ITS SECRETARY , PIN - 688524BY ADV C.A.JOJO RESPONDENTS: 1INCOME TAX OFFICERWARD-1 &TPS, ALAPPUZHA ALAPPUZHA – 688011.2INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE,NORTH BLOCK, NEW DELHI-110001. 3THE COMMISSIONER OF INCOME TAX (APPEALS)OFFICE OF THE COMMISSIONER OF INCOME TAX, KOTTAYAM-686002, PIN - 686002 OTHER PRESENT: ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON28.11.2022, ALONG WITH WP(C).33413/2022, 34334/2022, THE COURT ONTHE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 28 DAY OF NOVEMBER 2022 / 7TH AGRAHAYANA, 1944 WP(C) NO. 33413 OF 2022 PETITIONER: UZHUVA SERVICE CO-OPERATIVE BANK LTDNO.A 305PATTANAKKAD P.O, CHERTHALA, ALAPPUZHA-688531REPRESENTED BY ITS SECRETARY , PIN - 688531BY ADV C.A.JOJO RESPONDENTS: 1INCOME TAX OFFICERWARD-4, ALAPPUZHA ALAPPUZHA - 6880112INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE,NORTH BLOCK, NEW DELHI-110001.3THE COMMISSIONER OF INCOME TAX (APPEALS)OFFICE OF THE COMMISSIONER OF INCOME TAX, KOTTAYAM-686002, PIN - 686002ADV. JOSE JOSEPH (SC)THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON28.11.2022, ALONG WITH WP(C).34316/2022 AND CONNECTED CASES, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 28 DAY OF NOVEMBER 2022 / 7TH AGRAHAYANA, 1944 WP(C) NO. 34334 OF 2022 PETITIONER: MUTTOM SERVICE CO-OPERATIVE BANK LTD., NO.1165, MAIN ROAD CHERTHALA P.O, ALAPPUZHA-688524REPRESENTED BY ITS SECRETARY , PIN - 688524BY ADV C.A.JOJO RESPONDENTS: 1INCOME TAX OFFICER,WARD-1 &TPS, ALAPPUZHA ALAPPUZHA - 6880112INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE,NORTH BLOCK, NEW DELHI-1100013THE COMMISSIONER OF INCOME TAX (APPEALS)OFFICE OF THE COMMISSIONER OF INCOME TAX, KOTTAYAM-686002, PIN - 686002ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON28.11.2022, ALONG WITH WP(C).34316/2022 AND CONNECTED CASES, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: J U D G M E N T [WP(C) Nos.34316/2022, 33413/2022, 34334/2022] The petitioners in these cases suffered orders of assessment under theprovisions of the Income Tax Act, 1961 for the assessment year 2020-21. In W.P (C)Nos.34316/2022 and 33413/2022 the assessing officer appears to have denieddeduction in respect of interest income under Section 80 P (ii) (d) of the IncomeTax Act. It is the case of the petitioner that the issue stands covered in favour of thepetitioner by the judgment in PCIT v. Peroorkada Service Co-OperativeBank Ltd.; 442 ITR 141 and that the assessing officer has failed to consider thesaid judgment while finalizing the assessment against the petitioner. 2.The learned standing counsel appearing for the respondentDepartment states that the issue raised by the petitioner is to be agitated by by filingan appeal against the order of assessment and not by way of a writ petition underArticle 226 of the Constitution of India. It is submitted that the question as towhether the petitioner was actually entitled to deduction under Section 80 P (ii) (d)of the Income Tax Act is a matter to be determined with reference to the facts andtherefore the petitioner cannot challenge the assessment order directly by filing awrit petition under Article 226 of the Constitution of India. 2.The learned standing counsel appearing for the respondentDepartment states that the issue raised by the petitioner is to be agitated by by filingan appeal against the order of assessment and not by way of a writ petition underArticle 226 of the Constitution of India. It is submitted that the question as towhether the petitioner was actually entitled to deduction under Section 80 P (ii) (d)of the Income Tax Act is a matter to be determined with reference to the facts andtherefore the petitioner cannot challenge the assessment order directly by filing awrit petition under Article 226 of the Constitution of India. 3.In W.P (C) No.34334/2022 the petitioner challenges the order ofassessment for assessment year 2020-21 on the ground that the assessing officerdenied the deduction under Section 80 P as well as under Section 80 P (ii) (d)without considering the judgment of the Supreme Court reported in 431 ITR 1. It issubmitted that the deduction under Section 80 P (ii) (d) was denied by discarding the judgment in Peroorkada (supra). 4.Having heard the learned counsel appearing for the petitioner and thelearned standing counsel appearing for the respondent bank, I am of the view thatsince it is admitted that the judgment of the Supreme Court reported in Mavilayi Service Co-operative Bank Ltd. and others v. Commissioner of IncomeTax and another; 431 ITR 1 and was not considered while finalizing theassessment which was subject matter of challenge in W.P (C) No.34334/2022 andsince the decision in Peroorkada (supra)[442 ITR 141]was not considered whiledenying the benefit of deduction under Section 80P (ii) (d), the assessment orderswhich are impugned are liable to be set aside and the matter remanded to therespective assessing authorities for reconsideration after taking into considerationof the judgments referred to above. A Division Bench of this court to which I wasalso a party has by judgment in M/s. Poonjar Service Co-operative BankLtd., v. Income Tax officer (judgment dated 28-06-2022 in WA No.753/2021)concluded as follows; “An erroneous assessment occasioned by ignoring a binding judgment of theSupreme Court cannot be trivialized as an order against which an appellateremedy lies that would provide justice to an assessee.” Having regard to the above and taking into consideration of the judgment of theDivision Bench in M/s. Poonjar Service Co-operative Bank Ltd., (supra)these writ petitions are allowed. Accordingly orders of assessment produced asExt.P1 in all these writ petitions are quashed and the assessments are remanded tothe National Faceless Assessment Centre for fresh consideration in accordance withlaw after affording to the petitioner an opportunity of being heard and taking into consideration the law laid down in the judgments referred to above. The needful shall be done as expeditiously as possible and without any undue delay. AMG Sd/-GOPINATH P. JUDGE APPENDIX OF WP(C) 33413/2022 PETITIONER EXHIBITS Exhibit P1EXHIBIT-P1: A TRUE COPY OF THE ASSESSMENT ORDER U/S 143(1) WITH NIL INCOME FOR AY 2019-20 DATED 12.02.2020ISSUED BY THE 2ND RESPONDENT143(1) WITH NIL INCOME FOR AY 2019-20 DATED 12.02.2020ISSUED BY THE 2ND RESPONDENT Exhibit P2A TRUE COPY OF THE DEMAND NOTICE U/S 156 WITH RS.5/-AY2018-19 DATED 25.02.2021 ISSUED BY THE SECOND RESPONDENT.2018-19 DATED 25.02.2021 ISSUED BY THE SECOND RESPONDENT. Exhibit P3EXHIBIT P3 A TRUE COPY OF THE ALLOWED APPELLATE ORDER IN ITA NO.A.71/CIT(A)/KTM/2016-17 FOR AY 2014-15 DATED28.02.2018 ISSUED BY THE THIRD RESPONDENT.IN ITA NO.A.71/CIT(A)/KTM/2016-17 FOR AY 2014-15 DATED28.02.2018 ISSUED BY THE THIRD RESPONDENT. Exhibit P4EXHIBIT P4: A TRUE COPY OF THE ASSESSMENT ORDER U/S 143(3) FOR AY 2020-21 DATED 20.09.2022 ISSUED BY THE SECOND RESPONDENT 143(3) FOR AY 2020-21 DATED 20.09.2022 ISSUED BY THE SECOND RESPONDENT Exhibit P5EXHIBIT P5: A TRUE COPY OF THE DEMAND NOTICE U/S 156 FOR AY 2020-21 DATED 20.09.2022 ISSUED BY THE SECOND RESPONDENT.FOR AY 2020-21 DATED 20.09.2022 ISSUED BY THE SECOND RESPONDENT. Exhibit P3EXHIBIT P3 A TRUE COPY OF THE ALLOWED APPELLATE ORDER IN ITA NO.A.71/CIT(A)/KTM/2016-17 FOR AY 2014-15 DATED28.02.2018 ISSUED BY THE THIRD RESPONDENT.IN ITA NO.A.71/CIT(A)/KTM/2016-17 FOR AY 2014-15 DATED28.02.2018 ISSUED BY THE THIRD RESPONDENT. Exhibit P4EXHIBIT P4: A TRUE COPY OF THE ASSESSMENT ORDER U/S 143(3) FOR AY 2020-21 DATED 20.09.2022 ISSUED BY THE SECOND RESPONDENT 143(3) FOR AY 2020-21 DATED 20.09.2022 ISSUED BY THE SECOND RESPONDENT Exhibit P5EXHIBIT P5: A TRUE COPY OF THE DEMAND NOTICE U/S 156 FOR AY 2020-21 DATED 20.09.2022 ISSUED BY THE SECOND RESPONDENT.FOR AY 2020-21 DATED 20.09.2022 ISSUED BY THE SECOND RESPONDENT. APPENDIX OF WP(C) 34334/2022 PETITIONER EXHIBITS Exhibit P1A TRUE COPY OF THE ASSESSMENT ORDER U/S 143(3) WITH NIL INCOME FOR AY 2016-17 DATED 17.12.2018 ISSUED BY THE SECOND RESPONDENTNIL INCOME FOR AY 2016-17 DATED 17.12.2018 ISSUED BY THE SECOND RESPONDENT Exhibit P2EXHIBIT P2: A TRUE COPY OF THE ALLOWED APPELLATE ORDER IN ITA NO.A.38/CIT(A)/KTM/2017-18 FOR AY 2015-16 DATED 17.07.2018 ISSUED BY THE THIRD RESPONDENT.ORDER IN ITA NO.A.38/CIT(A)/KTM/2017-18 FOR AY 2015-16 DATED 17.07.2018 ISSUED BY THE THIRD RESPONDENT. Exhibit P3EXHIBIT P3: A TRUE COPY OF THE ASSESSMENT ORDER U/S 143(3) FOR AY 2020-21 DATED 27.09.2022 ISSUED BY THE SECOND RESPONDENT143(3) FOR AY 2020-21 DATED 27.09.2022 ISSUED BY THE SECOND RESPONDENT Exhibit P4EXHIBIT P4: A TRUE COPY OF THE DEMAND NOTICE U/S 156 FOR AY 2020-21 DATED 27.09.2022 ISSUED BY THE SECOND RESPONDENTFOR AY 2020-21 DATED 27.09.2022 ISSUED BY THE SECOND RESPONDENT Exhibit P5EXHIBIT P5: A TRUE COPY OF THE STAY ORDER IN WP (C ) NO.33413/2022 DATED 20.10.2022 NO.33413/2022 DATED 20.10.2022 APPENDIX OF WP(C) 34316/2022 PETITIONER EXHIBITS Exhibit P1EXHIBIT-P1: A TRUE COPY OF THE RELEVANT PAGES OF INTIMATION U/S 143(1) WITH NIL DEMAND FOR AY 2019-20 DATED 12.02.2020 ISSUED BY THE CPC BANGALOREINTIMATION U/S 143(1) WITH NIL DEMAND FOR AY 2019-20 DATED 12.02.2020 ISSUED BY THE CPC BANGALORE Exhibit P2EXHIBIT P2: A TRUE COPY OF THE ASSESSMENT ORDER U/S 143(3) FOR AY 2020-21 DATED 27.09.2022 ISSUED BY THE SECOND RESPONDENT143(3) FOR AY 2020-21 DATED 27.09.2022 ISSUED BY THE SECOND RESPONDENT Exhibit P3EXHIBIT P3: A TRUE COPY OF THE DEMAND NOTICE U/S 156 FOR AY 2020-21 DATED 27.09.2022 ISSUED BY THE SECOND RESPONDENTFOR AY 2020-21 DATED 27.09.2022 ISSUED BY THE SECOND RESPONDENT Exhibit P4EXHIBIT P4: A TRUE COPY OF THE STAY ORDER IN WP (C ) NO.33413/2022 DATED 20.10.2022NO.33413/2022 DATED 20.10.2022