Service Co-Operative Bank Ltd v. Commissioner Of

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943 WP(C).No.8610 OF 2021(A) PETITIONER: POOTHRIKKA SERVICE CO-OPERATIVE BANK LTD. NO.E 344,KOLENCHERY P.O., ERNAKULAM, PIN-682 311,REPRESENTED BY ITS SECRETARY. BY ADV. SRI.C.A.JOJO RESPONDENTS: INCOME TAX OFFICER,WARD-2, INCOME TAX OFFICE, R S ROAD,1ALUVA, ERNAKULAM-683 101. COMMISSIONER OF INCOME TAX (APPEALS)-2,OFFICE OF THE COMMISSIONER OF INCOME TAX,2CENTRAL REVENUE TOWER,KOCHI-682 018. ADDITIONAL COMMISSIONER,3NATIONAL E-ASSESSMENT CENTRE,NEW DELHI – 110 005. R1-3 BY SRI.CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON31.03.2021, ALONG WITH WP(C).8642/2021(E), WP(C).8652/2021(F), THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943WP(C).No.8642 OF 2021(E) PETITIONER: MAMALA SERVICE CO-OPERATIVE BANK LTD. NO.2799,MAMALA P.O., ERNAKULAM,PIN-682 035, REPRESENTED BY ITS SECRETARY. BY ADV. SRI.C.A.JOJO RESPONDENTS: INCOME TAX OFFICER, WARD-2,INCOME TAX OFFICE,1R.S.ROAD, ALUVA,ERNAKUAM-683 101. COMMISSIONER OF INCOME TAX (APPEALS)-2, 2OFFICE OF THE COMMISSIONER OF INCOME TAX,CENTRAL REVENUE TOWER, KOCHI-682 018. R1-2 BY SRI. CHRISTOPHER ABRAHAM, STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON31.03.2021, ALONG WITH WP(C).8610/2021(A), WP(C).8652/2021(F),THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNESDAY, THE 31ST DAY OF MARCH 2021 / 10TH CHAITHRA, 1943WP(C).No.8652 OF 2021(F) PETITIONER: VADAVUCODE FARMERS SERVICE CO-OPERATIVE BANK LTD. NO.651,VADAVUKODE P.O., ERNAKULAM, PIN-682 310,REPRESENTED BY ITS MANAGING DIRECTOR. BY ADV. SRI.C.A.JOJO RESPONDENTS: INCOME TAX OFFICER,WARD-3, INCOME TAX OFFICE, 1R.S.ROAD, ALUVA, ERNAKULAM-683 101. COMMISSIONER OF INCOME TAX (APPEALS)-2,OFFICE OF THE COMMISSIONER OF INCOME TAX,2CENTRAL REVENUE TOWER,KOCHI-682 018.ADDITIONAL COMMISSIONER,3NATIONAL E-ASSESSMENT CENTRE,NEW DELHI-110 005. R1-3 BY SRI. CHRISTOPHER ABRAHAM, STANDING COUNSEL. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.03.2021, ALONG WITH WP(C).8610/2021(A), WP(C).8642/2021(E), THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT (W.P.(C) Nos.8610 of 2021,8642 of 2021 and 8652 of 2021) Dated this the 31st day of March 2021 Heard the learned counsel appearing for thepetitioners in these writ petitions. appearing for the petitioners that petitioners arethe co-operative banks and they are entitled for thebenefits of Section 80(P)of the Income Tax Act. The learned counsel for petitioners submit that theassessment order denying the benefit of Section80(P)of the Income Tax Act has been challenged bythe petitioners by filing statutory appeals beforethe 2[nd] respondent, the Commissioner of the IncomeTax (Appeals). However, during pendency of thoseappeals, the Assessing Officer has communicated tothe petitioners that the petitioners should pay 20%of the demand and then apply for stay of demand.This course of action adopted by the respondents, in submission of the learned counsel for thepetitioners is contrary to the judgment by the WP(C).Nos.8610 OF 2021 AND CONNECTED CASES Hon'ble Supreme COurt in the matter of Mavilayi ServiceCo-operative Bank Ltd.v. Commissionerof Income Tax, Calicut, reported in [2019(2) KHC 287]. It is further argued that this Court in a series ofjudgments has quashed such action on the part of therespondents. 3.The learned Standing Counsel takes notice for respondents and argues that the petitioners canat the most prefer stay petitions and can seek stayin the impugned orders. 4.I have considered the submissions inadvance. submission of the learned counsel for thepetitioners is contrary to the judgment by the WP(C).Nos.8610 OF 2021 AND CONNECTED CASES Hon'ble Supreme COurt in the matter of Mavilayi ServiceCo-operative Bank Ltd.v. Commissionerof Income Tax, Calicut, reported in [2019(2) KHC 287]. It is further argued that this Court in a series ofjudgments has quashed such action on the part of therespondents. 3.The learned Standing Counsel takes notice for respondents and argues that the petitioners canat the most prefer stay petitions and can seek stayin the impugned orders. 4.I have considered the submissions inadvance. 5.The question which is pending for adjudication before the appellate authority iswhether the petitioners who are co-operativeSocieties are entitled for deduction under Section80 (P) of the Income Tax Act. The Assessing Officerhas denied the benefit of Section 80 (P) of theIncome Tax Act to the petitioner societies. In thematter of Mavilayi Service Co-operative Bank Ltd. 6 the question regarding liability of the co-operativesocieties to pay the income tax assess was decided.The Division Bench of this Court relying on the saidjudgment in W.A.No. 1536/2019 dated 01-07-2019, hasquashed the action on the part of respondents withthe direction that the Commissioner of the IncomeTax should consider and dispose of the statutoryappeals filed by the appellant co-operativesocieties at the earliest taking note of Full Benchdecision in the matter of Mavilayi ServiceCo-operative Bank Ltd. and till then the recoveryand collection of taxes should be kept in abeyance.Similar is the judgment of the learned Single Judgein W.P.(C) No. 5234/2020, the Electricity BoardEmployees Co-operative Society Ltd. v. Income TaxOfficer decided on 26-02-2020. In this view of the matter, in the light ofratio of judgment of this Court, in the matter ofTheAngadipuramServiceCo-operativeBankLtd.v.The Commissioner of Income Tax (Appeals), the writpetitions are allowed. The 2[nd] respondent is directed WP(C).Nos.8610 OF 2021 AND CONNECTED CASES 7 to decide the pending appeals expeditiously and till then the respondents are directed to keep therecovery proceedings pursuant to the assessmentorder in abeyance. Sd/- A.M.BADARJUDGE SSK/31/03 APPENDIX OF WP(C) No.8610/2021 PETITIONER'S EXHIBITS: APPENDIX OF WP(C) No.8642/2021 PETITIONER'S EXHIBITS: EXHIBIT P1A TRUE COPY OF THE CERTIFICATE IN THISREGARD ISSUED BY THE ASSISTANT REGISTRAR(GENERAL) KUNNATHUNADU DATED 14.12.2016.REGARD ISSUED BY THE ASSISTANT REGISTRAR(GENERAL) KUNNATHUNADU DATED 14.12.2016. EXHIBIT P2A TRUE COPY OF THE ASSESSMENT ORDER FOR AY-2017-18 DATED 29.12.2019 ISSUED BY THE 1STRESPONDENT.2017-18 DATED 29.12.2019 ISSUED BY THE 1STRESPONDENT. EXHIBIT P3A TRUE COPY OF THE DEMAND NOTICE FOR ANAMOUNT OF RS.1,45,27,306/- U/S. 156 DATED30.12.2019 ISSUED BY THE 1ST RESPONDENT.AMOUNT OF RS.1,45,27,306/- U/S. 156 DATED30.12.2019 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P4A TRUE COPY OF THE APPEAL FOR AY 2017-18BEFORE THE 2ND RESPONDENT DATED 22.01.2020.BEFORE THE 2ND RESPONDENT DATED 22.01.2020.EXHIBIT P5A TRUE COPY OF THE STAY PETITIONER FOR AY2017-18 BEFORE THE 2ND RESPONDENT DATED24.03.2021.2017-18 BEFORE THE 2ND RESPONDENT DATED24.03.2021. EXHIBIT P6A TRUE COPY OF THE NOTICE OF DEMANDDEMANDING 20 % OF TAX DATED 24.03.2021 FORAYS 2017-18 ISSUED BY THE 1ST RESPONDENT.DEMANDING 20 % OF TAX DATED 24.03.2021 FORAYS 2017-18 ISSUED BY THE 1ST RESPONDENT.EXHIBIT P7A TRUE COPY OF THE JUDGMENT IN WA 1536 OF2019 DATED 01.07.2019.2019 DATED 01.07.2019. EXHIBIT P8A TRUE COPY OF THE JUDGMENT IN WP(C) 5234OF 2020 DATED 26.02.2020.OF 2020 DATED 26.02.2020. RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE APPENDIX OF WP(C) No.8652/2021 PETITIONER'S EXHIBITS: EXHIBIT P1 EXHIBIT P6A TRUE COPY OF THE NOTICE OF DEMANDDEMANDING 20 % OF TAX DATED 24.03.2021 FORAYS 2017-18 ISSUED BY THE 1ST RESPONDENT.DEMANDING 20 % OF TAX DATED 24.03.2021 FORAYS 2017-18 ISSUED BY THE 1ST RESPONDENT.EXHIBIT P7A TRUE COPY OF THE JUDGMENT IN WA 1536 OF2019 DATED 01.07.2019.2019 DATED 01.07.2019. EXHIBIT P8A TRUE COPY OF THE JUDGMENT IN WP(C) 5234OF 2020 DATED 26.02.2020.OF 2020 DATED 26.02.2020. RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE APPENDIX OF WP(C) No.8652/2021 PETITIONER'S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE CERTIFICATE OFREGISTRATION ISSUED BY THE ASSISTANTREGISTRAR PERUMBAVOOR DATED 4.10.2018.REGISTRATION ISSUED BY THE ASSISTANTREGISTRAR PERUMBAVOOR DATED 4.10.2018. EXHIBIT P2A TRUE COPY OF THE ASSESSMENT ORDER FOR AY2017-18 DATED 31.12.2019 ISSUED BY THE 1STRESPONDENT.2017-18 DATED 31.12.2019 ISSUED BY THE 1STRESPONDENT. EXHIBIT P3A TRUE COPY OF THE DEMAND NOTICE FOR ANAMOUNT OF RS.8,36,62,521/- U/S 156 DATED31.12.2019 ISSUED BY THE 1ST RESPONDENT.AMOUNT OF RS.8,36,62,521/- U/S 156 DATED31.12.2019 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P4A TRUE COPY OF THE APPEAL FOR AY 2017-18BEFORE THE 2ND RESPONDENT DATED 13.1.2020.BEFORE THE 2ND RESPONDENT DATED 13.1.2020. EXHIBIT P5A TRUE COPY OF THE STAY PETITION FOR AY2017-18 BEFORE THE 2ND RESPONDENT DATED24.3.2021.2017-18 BEFORE THE 2ND RESPONDENT DATED24.3.2021. EXHIBIT P6A TRUE COPY OF THE ASSESSMENT ORDER FOR AY2018-19 DATED 17.2.2021 ISSUED BY THE 3RDRESPONDENT.2018-19 DATED 17.2.2021 ISSUED BY THE 3RDRESPONDENT. EXHIBIT P7A TRUE COPY OF THE DEMAND NOTICE FOR ANAMOUNT OF RS.1,90,97,273/- U/S 156 DATED17.2.2021 ISSUED BY THE 3RD RESPONDENT.AMOUNT OF RS.1,90,97,273/- U/S 156 DATED17.2.2021 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P8A TRUE COPY OF THE APPEAL FOR AY 2018-19BEFORE THE 2ND RESPONDENT DATED 8.3.2021.BEFORE THE 2ND RESPONDENT DATED 8.3.2021. EXHIBIT P9A TRUE COPY OF THE STAY PETITION FOR AY2018-19 BEFORE THE 2ND RESPONDENT DATED24.3.2021.2018-19 BEFORE THE 2ND RESPONDENT DATED24.3.2021. EXHIBIT P10A TRUE COPY OF THE NOTICE OF DEMANDDEMANDING 20% OF TAX DATED 24.3.2021 FORAYS 2017-18 AND 2018-19 ISSUED BY THE 1STRESPONDENT.DEMANDING 20% OF TAX DATED 24.3.2021 FORAYS 2017-18 AND 2018-19 ISSUED BY THE 1STRESPONDENT. EXHIBIT P11A TRUE COPY OF THE JUDGMENT IN W.A.1536 OF2019 DATED 1.7.2019.2019 DATED 1.7.2019. RESPONDENT'S EXHIBITS:NIL SSK //TRUE COPY// PA TO JUDGE