W.a v. District Collector, Malappuram(2009 (4) Klt 485) And The Writ Petition Was Dismissed

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.M.JOSEPH &THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN WEDNESDAY, THE 13TH DAY OF FEBRUARY 2013/24TH MAGHA 1934 WA.No. 234 of 2013 () IN WP(C).30626/2012 ------------------------------------------- AGAINST THE ORDER/JUDGMENT IN WP(C).NO.30626/2012 OF HIGH COURT OF KERALA DATED 02-01-2013 ... APPELLANT(S):PETITIONERS: --------------------------------------------- 1. MANGALAM SERVICE CO-OPERATIVE BANK LIMITED NO. 9701, P.O. MANGALAM, MALAPPURAM 676 561, REPRESENTED BY ITS SECRETARY, ABDUL MAJEED V.M. 2. EDARIKODE SERVICE CO-OPERATIVE BANK LTD NO.F.10739, EDARIKODE P.O, MALAPPURAM 676 501, REPRESENTED BY ITS SECRETARY, ABDUL JALEEL K. REPRESENTED BY ITS SECRETARY, ABDUL JALEEL K. BY ADVS.SRI.P.RAMAKRISHNAN SRI.C.ANIL KUMAR RESPONDENT(S):RESPONDENTS: --------------------------------------------------- 1. THE INCOME TAX OFFICER, WARD III, TIRUR, OFFICE OF THE INCOME TAX OFFICER, TARIFF BAZAR, TOWN HALL ROAD, TIRUR, MALAPPURAM 676 101. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX OFFICER, TARIFF BAZAR, TOWN HALL ROAD, TIRUR, MALAPPURAM 676 101. TARIFF BAZAR, TOWN HALL ROAD, TIRUR, MALAPPURAM 676 101. 3. THE COMMISSIONER OF INCOME TAX (CIB), KOCHI,ERNAKULAM 682 031. 4. UNION OF INDIA, REPRESENTED BY THE SECRETARY TO GOVERNMENT OF INDIA, MINISTRY OF FINANCE, NEW DELHI 110 001. R1 TO R3 BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 13-02-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH & K.RAMAKRISHNAN, JJ. ------------------------------------------------------------ W.A.No.234 of 2013 ----------------------------------------- Dated, this the 13[th] day of February, 2013J U D G M E N T K.M.Joseph, J. Appellants are the writ petitioners. Appellants are PrimaryCo-operative Credit Societies registered under the Kerala Co-operativeSocieties Act. The prayer in the writ petition was to quash Exts.P3, P5,P7, P8 and P9 and not to proceed against the petitioners pursuant to Ext.P(Details not given in the writ petition). The further prayer is to hold thatrespondents are not liable to proceed against the petitioners till a finaldecision is taken in SLP ( C) No.3976/2010. Ext.P3 is the notice issuedunder Section 142(1) of the Income Tax Act, 1961 calling to submit returnsof income. Ext.P5 is yet another notice directing to comply with thedirections or to face proceedings under Section 144 of the Act. Ext.P7 isthe further notice sent by the Ist respondent to the Ist appellant requiringthe Ist appellant to specify the category of person in which the Ist appellantwould be called in the light of definition of 'person' under Section 2 (31) ofthe Act. The Ist appellant submitted detailed explanation. Ext.P8 andExt.P9 are the notices issued by the Ist respondent to the 2[nd] appellantseeking information under Section 142 of the Act. We find from the W.A.No.234 of 2013 W.A.No.234 of 2013 judgment of the learned Single Judge that in support of the contention thatthe appellants are not persons contemplated under Section 142 (1) it iscontended that notices were issued invoking the power under Section 133(6) of the Act and those notices were challenged before this Court bysome other persons and notices were upheld by the Single Bench andDivision Bench of this Court and that in an SLP filed, the Apex Court hasissued notice and stayed the proceedings. The learned Single Judgetook the view that a combined reading of Section 142 (1) and Section 2(31) would show that co-operative societies like the appellants are also'persons' as defined in the Act and it could not therefore be held that thenotices issued were without jurisdiction. Learned Single Judge also tookthe view that the terms of Section 133 (6) and Section 142 (1) areincomparable and therefore the pending proceedings before the ApexCourt cannot be of any assistanceto the appellants. It is further heldthat even if it is assumed that the proceedings are of any relevance, theSingle Judge was bound by the Division Bench, the fact that the ApexCourt has stayed the judgment is no reason to entertain the writ petition.This legal position was found to be clarified by a Division Bench of thisCourt in the judgment in Abdu Rahiman v. District Collector, Malappuram(2009 (4) KLT 485) and the writ petition was dismissed. 2. We heard the learned counsel for the appellants and the learned Standing counsel for the Revenue. Section 2 (31) of the Income Tax Act, 1961, defines a person. “2 (31). “person” includes-- (i)an individual, (ii)a Hindu undivided family, (iii)a company, (iv)a firm, (v)an association of persons or a body of individuals, whether incorporated or not, (vi)a local authority, and (vii)every artificial juridical person, not falling within any of the preceding sub-clauses. {Explanation.--For the purposes of this clause, anassociation of persons or a body of individuals or alocal authority or an artificial juridical person shall bedeemed to be a person, whether or not such person orbody or authority or juridical person was formed orestablished or incorporated with the object of derivingincome, profits or gains.} “ Section 133 confers power on the officer concerned to call for information. Section 142 contemplates inquiry before assessment. UnderSection 142 in respect of a person who has filed return or not filedreturn, the officer has power to call for information obviously for thepurpose of making correct assessment. A perusal of the definition of theword 'person' would show that it includes within its sweep all juridical W.A.No.234 of 2013 persons. Appellants are cooperative societies. Indisputably they areregistered under the Co-operative Societies Act. Section 9 of the KeralaCo-operative Societies Act reads as follows. “9. Co-operative Societies to be bodiescorporate:--The registration of a society shallrender it a body corporate by the name underwhich it is registered, having perpetualsuccession and a common seal and withpower to hold property, enter into contracts,institute and defend suits and other legalproceedings and to do all things necessary forthe purposes for which it was constituted. {provided that the Government and theRegistrar shall have power to regulate andcontrol the working of a society for theeconomic and social betterment of itsmembers and the general public}.” Therefore, appellants are co-operative societies which have beenregistered and which are treated as bodies corporate vide section 9 of theKerala Co-operative Societies Act. 3. Learned Standing Counsel for the Revenue also submits that appellants are really estopped from denying they are persons for thereason that under Section 80P of the Act the income of the co-operative W.A.No.234 of 2013 5 {provided that the Government and theRegistrar shall have power to regulate andcontrol the working of a society for theeconomic and social betterment of itsmembers and the general public}.” Therefore, appellants are co-operative societies which have beenregistered and which are treated as bodies corporate vide section 9 of theKerala Co-operative Societies Act. 3. Learned Standing Counsel for the Revenue also submits that appellants are really estopped from denying they are persons for thereason that under Section 80P of the Act the income of the co-operative W.A.No.234 of 2013 5 society is exempted and they are claiming benefit under Section 194A(viia) . It is submitted by the learned Standing counsel for the Revenue thatthe objection filed by the appellants itself would show that they are claimingbenefit under Section 194A (iiia) of the Act. Section 194A speaks aboutany person, not being an individual or a Hindu undivided family. Therefore,the definition clause except to the extent it is otherwise provided in theSection would necessarily apply, runs the argument. 4. Learned Standing Counsel for the Revenue also has a case that the appellants society would fall within the four corners of the definition'person' under Section 2 (31) for the reason that it is an association ofpersons. We would think that, at any rate, under Section 2 (31) a personcomprehends juristic entity. Having regard to the fact that appellants areregistered under the Co-operative Societies Act appellants must be treatedas bodies corporate, therefore juristic person capable of exercising all therights of natural person as provided in the Act. It would therefore makethem persons. No doubt, the learned counsel for the appellants wouldpoint out that the Apex Court has admitted the SLP and an order of stay isgranted. He also brought to our notice the judgment of the Division Benchof this Court rendered in the case of some other co-operative societiesdirecting proceedings to be kept in abeyance. But, he fairly concedes that W.A.No.234 of 2013 the said litigation relates to proceedings under Section 133 (6). We are notinclined to stall proceedings under the Act on the score that the appellantsare not persons. The proceedings are taken admittedly under Section 142as already noted. Therefore, we are not inclined to interfere. The appealfails, and it is dismissed. (K.M.JOSEPH) JUDGE. MS ( K.RAMAKRISHNAN) JUDGE.