High Court of KeralaSingle Judge2023-09-08Disposed of with liberty to file returns within...

THE MUVATTUPUZHA HOUSING CO-OPERATIVE SOCIETY LTD; PUTHENCRUZ GOVT.SERVANT'S CO-OPERATIVE SOCIETY LTD; KOOTHATTUKULAM FARMERS SERVICE CO-OPERATIVE BANK LTD v. INCOME TAX DEPARTMENT, PRINCIPAL CHIEF COMMISSIONER

Case / Petition Number:WP(C) Nos.15059/2023, 15154/2023, 15167/2023

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Dinesh Kumar Singh
Judgment Date: 2023-09-08
Court Decision / Holding: The writ petitions are disposed of with liberty to the petitioners to file returns of their income within one month from today. If filed, the assessing authority will examine the return in accordance with the law and pass the final assessment orders expeditiously.
Final Disposition: Disposed of with liberty to file returns within one month; final assessment to be completed in due course.

Parties to the Case

Appellants / Petitioners

The Muvattupuzha Housing Co-Operative Society Ltd
Puthencruz Govt.SERVANT'S Co-Operative Society Ltd
Koothattukulam Farmers Service Co-Operative Bank Ltd

Respondents

Income Tax Officer, Ward 1 & TPS, Thodupuzha, Temple Road, Thodupuzha, Idukki
Principal Chief Commissioner, C R Building, I S Press Road, Ernakulam, Kochi

Legal Representation & Advocates

Counsels for Petitioners

• C.A. Jojo

Counsels for Respondents

• Christopher Abraham

Case Synopsis & Summary

The present writ petitions—WP(C) Nos. 15059/2023, 15154/2023 and 15167/2023—challenge notices issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2019-20 against three cooperative societies registered under the Kerala Co-operative Societies Act, 1969. The petitioners had not filed income tax returns on the belief that their entire income qualified for exemption under Section 80P, and therefore they were not obliged to file. The Assessing Authority, however, treated the non-filing as concealment and issued notices under Section 148A to initiate assessment proceedings, followed by orders under Section 148 for continuation of proceedings. The petitioners contended that the exemption under Section 80P precludes liability and argues that the notices and joint actions under 148A were not warranted in their cases. They prayed for liberty to file returns and to pursue their eligibility arguments under 80P. After hearing, the Court disposed of the petitions by directing the petitioners to file returns within one month from the date of the order; the Assessing Authority is to examine the returns as per law and pass final assessment orders expeditiously. The judgment underscores the tension between 148A procedures and exemptions under 80P for cooperative societies, especially within the framework of the Kerala Co-operative Societies Act.

Provisions of Law Cited

Income Tax Act, 1961 – Section 148 (notice)Income Tax Act, 1961 – Section 148A (notice under 148A)Income Tax Act, 1961 – Clause (D) of Section 148AIncome Tax Act, 1961 – Section 80PKerala Co-operative Societies Act, 1969 and Rules thereunder

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that their entire income is exempt under Section 80P, hence there was no obligation to file returns. They challenge the validity/necessity of notices issued under Section 148 and the subsequent 148A proceedings, seeking liberty to file returns and to have their exemption claims considered under the statute.

Contentions of Respondents

The respondents contend that concealed income was detected and the notices issued under Section 148 and 148A were proper for assessment for AY 2019-20; they seek to proceed with the statutory assessment in accordance with law.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Anshul Jain v. Principal Commissioner of Income Tax and another	[2022] 449 ITR 256 (SC)	Mentioned Only	Cited in the respondents’ exhibits; not analyzed in the reasoning of the present judgment.
Anshul Jain v. Principal Commissioner of Income Tax	[2022] 449 ITR 251 (P&H)	Mentioned Only	Cited in the exhibits; not discussed in the judgment’s reasoning.
M/s Viswabharathi Medicals v. Income Tax Officer	W.P.(C). No. 37527 of 2022 (Kerala HC)	Mentioned Only	Cited in the Kerala High Court’s copy of the proceedings/references; not analysed in the judgment.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM ## PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 8[TH] DAY OF SEPTEMBER 2023 / 17TH BHADRA, 1945 ## WP(C) NO. 15059 OF 2023 ## PETITIONER/S: THE MUVATTUPUZHA HOUSING CO-OPERATIVE SOCIETY LTD E 299, KAVUMPADY, MUVATTUPUZHA P.O, ERNAKULAM, REPRESENTED BY ITS SECRETARY, PIN - 686661 BY ADV C.A.JOJO ## RESPONDENT/S: - 1 THE INCOME TAX OFFICER, WARD 1 & TPS, THODUPUZHA, TEMPLE ROAD, THODUPUZHA, IDUKKI, PIN - 685584 - 2 THE PRINCIPAL CHIEF COMMISSIONER, C R BUILDING, I S PRESS ROAD, COCHIN, PIN - 682018 BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.09.2023, ALONG WITH WP(C).15154/2023, 15167/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **W.P.(C) Nos.15059/2023, 15154/2023, 15167/2023** **-2-** IN THE HIGH COURT OF KERALA AT ERNAKULAM ## PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 8[TH] DAY OF SEPTEMBER 2023 / 17TH BHADRA, 1945 ## WP(C) NO. 15154 OF 2023 ## PETITIONER/S: PUTHENCRUZ GOVT.SERVANT'S CO-OPERATIVE SOCIETY LTD, NO. E 153, PUTHENCRUZ P.O, ERNAKULAM, COCHIN -682308, REPRESENTED BY ITS SECRETARY BY ADV C.A.JOJO ## RESPONDENT/S: - 1 THE INCOME TAX OFFICER, NON CORP WARD 1(1), KOCHI, C. R. BUILDING, I.S PRESS ROAD COCHIN-682018 - 2 THE PRINCIPAL CHIEF COMMISSIONER, C R BUILDING, I S PRESS ROAD, ERNAKULAM COCHIN, PIN - 682018 BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT ## OTHER PRESENT: ## CHRISTOPHER ABRAHAM-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.09.2023, ALONG WITH WP(C).15059/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **W.P.(C) Nos.15059/2023, 15154/2023, 15167/2023** **-3-** IN THE HIGH COURT OF KERALA AT ERNAKULAM ## PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 8[TH] DAY OF SEPTEMBER 2023 / 17TH BHADRA, 1945 WP(C) NO. 15167 OF 2023 ## PETITIONER/S: KOOTHATTUKULAM FARMERS SERVICE CO-OPERATIVE BANK LTD, E 45, KOOTHATTUKULAM P.O, ERNAKULAM -PIN-686662 REPRESENTED BY ITS MANAGING DIRECTOR. BY ADV C.A.JOJO ## RESPONDENT/S: - 1 THE INCOME TAX OFFICER,WARD 1 & TPS, THODUPUZHA, TEMPLE ROAD, THODUPUZHA, IDUKKI, PIN -685584 - 2 THE PRINCIPAL CHIEF COMMISSIONER,C R BUILDING, I S PRESS ROAD, ERNAKULAM, COCHIN, PIN – 682018 BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.09.2023, ALONG WITH WP(C).15059/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **W.P.(C) Nos.15059/2023, 15154/2023, 15167/2023** **-4-** ## J U D G M E N T [WP(C) Nos.15059/2023, 15154/2023, 15167/2023] The present writ petitions have been filed impugning the notices issued under Section 148 of the Income Tax Act 1961 and further proceedings taken pursuant to the notices issued for the Assessment Year 2019-20. 2. The petitioners are Co-operative Societies registered under the provisions of the Kerala Co-operative Societies Act 1969 and Rules made thereunder. The petitioners did not file the return of their income for the Assessment Year 2019-20 on the belief that the petitioners' entire income was exempt under Section 80P of the Income Tax Act, and, therefore, they were not required to file the return of their income. 3. The assessing authority believes that the petitioners have concealed their income and tried to escape the assessment. The petitioners were therefore issued notices ## **W.P.(C) Nos.15059/2023, 15154/2023, 15167/2023** **-5-** under Section 148A, and after considering their response, the orders in Ext.P3 were passed for proceeding against them. In response to the orders passed under Section 148 of the Income Tax Act, the petitioners have not filed their return of income. 4. After some argument, the learned Counsel for the petitioners submits that these petitions may be disposed of with liberty to the petitioners to file the return of income and take all the pleas which are available to them under the law in respect of their claim for their income being jumped under Section 80P of the Income Tax Act. 5. Considering the said submission, the present writ petitions are disposed of with liberty to the petitioners to file returns of their income within a period of one month from today. If the petitioners file their return of income within a period of one month from today, the assessing authority will examine the return in accordance with the law and pass the final assessment orders expeditiously. **W.P.(C) Nos.15059/2023, 15154/2023, 15167/2023** **-6-** With the aforesaid direction, the writ petitions stand finally disposed of. Sd/- DINESH KUMAR SINGH JUDGE jjj ## **W.P.(C) Nos.15059/2023, 15154/2023, 15167/2023** **-7-** APPENDIX OF WP(C) 15154/2023 - PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE NOTICE U/S 148A(B) DATED 08.02.2023 ISSUED BY THE 1ST RESPONDENT - Exhibit P2 A TRUE COPY OF THE REPLY SUBMITTED TO THE 1ST RESPONDENT DATED 14.02.2023 - Exhibit P3 A TRUE COPY OF THE ORDER UNDER CLAUSE (D) OF S.148A DATED 22.03.2023 ISSUED THE 1ST RESPONDENT - Exhibit P4 A TRUE COPY OF THE STATUS QUO ORDER IN WP ( C) 24112 OF 2019 DATED 04.09.2019 - Exhibit P5 A TRUE COPY OF THE STAY ORDER IN WP ( C) 4368 OF 2023 DATED 12.04.2023 - RESPONDENT EXHIBITS - Exhibit R1(a) copy of the Supreme Court judgment dated 02.09.2022 in the case of anshul Jain v. Principal Commissioner of Income tax and another [2022] 449 ITR 256 (SC) - Exhibit R1 (b) Copy of the judgment of the Punjab and Haryana High Court in the case of Anshul Jain v. Principal Commissioner of Income Tax dated 02.06.2022 [2022] 449 ITR 251 (P and H) Exhibit R1(c) Copy of the judgment of the Kerala High Court dated 07.12.2022 in W.P. (C) No. 37527 of 2022 in the case of M/s Viswabharathi Medicals v. Income Tax Officer ## **W.P.(C) Nos.15059/2023, 15154/2023, 15167/2023** **-8-** APPENDIX OF WP(C) 15167/2023 - PETITIONER EXHIBITS - Exhibit P1 - A TRUE COPY OF THE LETTER DATED 30.01.2023 ISSUED BY THE 1ST RESPONDENT - Exhibit P2 A TRUE COPY OF THE REPLY SUBMITTED TO THE 1ST RESPONDENT DATED 10.02.2023 Exhibit P3 A TRUE COPY OF THE NOTICE U/S 148A(B) DATED 28.02.2023 ISSUED BY THE 1ST RESPONDENT - Exhibit P4 THE RELEVANT PAGE OF COPY OF THE AUDITED BALANCE SHEET AND PROFIT AND LOSS STATEMENT OF THE PETITIONER FOR FY 2018-19 DATED 23.09.2019 - Exhibit P5 A TRUE COPY OF THE STATUS QUO ORDER IN WP ( C) 24112 OF 2019 DATED 04.09.2019 - Exhibit P6 A TRUE COPY OF THE STAY ORDER IN WP ( C) 4368 OF 2023 DATED 12.04.2023 - RESPONDENT EXHIBITS - Exhibit R1(a) Copy of the Supreme Court judgment dated 02.09.2022 in the case of Anshul Jain v. Principal Commissioner of Income Tax and another [2022] 449 ITR 256 (SC) - Exhibit R1 (b) Copy of the judgment of the Punjab and Haryana High Court in the case of Anshul Jain v. Principal Commissioner of Income Tax dated 02.06.2022 [2022] 449 ITR 251 (Pand H) - Exhibit R1(c) Copy of the judgment of the Kerala High Court dated 07.12.2022 in W.P.(C). No.37527 of 2022 in the case of m/s Viswabharathi Medicals v. Income Tax Officer - Exhibit R1(d) True copy of the order dated 23.03.2023 passed under clause (d) of section 148A of the Income Tax Act. - Exhibit R1(e) True copy of notice under section 148 of the Income Tax Act dated 27.03.2023 calling for return of income for Assessment Year 2019-20 **W.P.(C) Nos.15059/2023, 15154/2023, 15167/2023** **-9-** ## APPENDIX OF WP(C) 15059/2023 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE NOTICE U/S 148A(B) DATED 02.03.2023 ISSUED BY THE 1ST RESPONDENT Exhibit P2 A TRUE COPY OF THE REPLY SUBMITTED TO THE 1ST RESPONDENT DATED 10.02.2023 - Exhibit P3 A TRUE COPY OF THE ORDER UNDER CLAUSE (D) OF S.148A DATED 25.03.2023 ISSUED THE 1ST RESPONDENT - Exhibit P4 A TRUE COPY OF THE NOTICE U/S S.148 DATED 2703.2023 ISSUED THE 1ST RESPONDENT - Exhibit P5 A TRUE COPY OF THE STATUS QUO ORDER IN WP ( C) 24112 OF 2019 DATED 04.09.2019 - Exhibit P6 A TRUE COPY OF THE STAY ORDER IN WP ( C) 4368 OF 2023 DATED 12.04.2023 - RESPONDENT EXHIBITS - Exhibit R1(a) Copy of the Supreme Court decision dated 02.09.2022 in the case of Anshul Jain v Principal Commissioner of Income Tax and Another {2022} 449 ITR 256 (SC) - Exhibit R1 (b) Copy of the Judgment of the Punjab and Haryana High Court in the case of Anshul Jain v. Principal Commissioner of Income Tax dated 02.06.2022, [2022] 449 ITR 251 (P and H) Exhibit R1(c) Copy of the Judgment of the Kerala High Court dated 07.12.2022 in W.P.(C) No. 37527 of 2022 in the case of M/s Viswabharathi Medicals v. Income Tax Officer