IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1639 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C) 17748/2019 of HIGH COURT APPELLANT/PETITIONER: PULPATTA CO-OPERATIVE URBAN CREDIT SOCIETY LTD. NO.7445, PULAPATTA P.O., UMMANEZHI, PALAKKAD-678 632, REPRESENTED BY ITS SECRETARY, JAYASANKARAN.K., AGED 40, S/O.KUTTYRAMAN. BY ADVS.SRI.HARISANKAR V. MENON SMT.K.KRISHNA SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER, WARD 3, AYAKAR BHAVAN, PALAKAKD-678 014. 2 COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR-680 001. THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1642/2019, WA.1651/2019, WA.1641/2019, WA.1652/2019, WA.1649/2019, WA.1647/2019, WA.1646/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:2:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1640 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C) NO.17738/2019 of HIGH COURT APPELLANT/PETITIONER: KARAKURISSI SERVICE CO-OPERATIVE BANK LTD NO. P 1025, KARAKURISSI, PALAKKAD 678 595, REPRESENTED BY ITS SECRETARY, A. JAYASREE, AGED 48, D/O. A. ANIYAN MENON. BY ADVS.SRI.HARISANKAR V. MENON SMT.K.KRISHNA SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER WARD 2, AYAKAR BHAVAN, PALAKKAD 678 014 2 COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR 680 001 OTHER PRESENT: SRI. JOSE JOSEPH THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1639/2016, WA.1641/2019, WA.1642/2019, WA.1643/2019, WA.1644/2019, WA.1646/2019, WA.1647/2019, WA.1649/2019, WA.1651/2019, WA.1652/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:3:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1641 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17751/2019 of HIGH COURT APPELLANT/PETITIONER: THACHAMPARA SERVICE CO-OPERATIVE BANK LTD. NO. 3150, MAIN ROAD, THACHAMPARA, PALAKKAD - 678 593, REPRESENTED BY ITS SECRETARY, JAYAKUMAR.M, AGED 52, S/O. PADMANABHAN NAIR BY ADVS.SRI.HARISANKAR V. MENON SMT.K.KRISHNA SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER, WARD 4, AYAKAR BHAVAN, PALAKKAD - 678 014 2 COMMISSIONER OF INCOME TAX (APPEALS) SAKTHAN NAGAR, THRISSUR - 680 001 OTHER PRESENT: SRI JOSE JOSEPH STANDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1642/2019, WA.1651/2019, WA.1652/2019, WA.1649/2019, WA.1647/2019, WA.1646/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:4:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1642 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17742/2019 of HIGH COURT APPELLANT/PETITIONER: PATTAMBI SERVICE CO-OPERATIVE BANK LTD NO. P 585, RAZMALL COMPLEX, PALLIPURAM ROAD, PATTAMBI, PALAKKAD - 679 303, REPRESENTED BY ITS SECRETARY, C. GIRIJA, AGED 57, D/O.E.P. NARAYANAN NAIR BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER WARD 3, AYAKAR BHAVAN, PALAKKAD - 678 014 2 COMMISSIONER OF INCOME TAX (APPEALS) SAKTHAN NAGAR, THRISSUR - 680 001 OTHER PRESENT: SRI JOSE JOSEPH STANDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1651/2019, WA.1641/2019, WA.1652/2019, WA.1649/2019, WA.1647/2019, WA.1646/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:5:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1643 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17746/2019 of HIGH COURT APPELLANT/PETITIONER: POTTASSERY SERVICE CO-OPERATIVE BANK LTD NO. P543, POTTASSERY P.O., MANNARKKAD, PALAKKAD-678 598, REPRESENTED BY ITS SECRETARY, JOLLY SEBASTIAN, AGED 54, S/O DEVASIA BY ADVS.SRI.HARISANKAR V. MENON SMT.K.KRISHNA SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER WARD 4, AYAKAR BHAVAN, PALAKKAD - 678 014 2 COMMISSIONER OF INCOME TAX (APPEALS) SAKTHAN NAGAR, THRISSUR - 680 001 OTHER PRESENT: SRI JOSE JOSEPH STSNDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1642/2019, WA.1651/2019, WA.1641/2019, WA.1652/2019, WA.1649/2019, WA.1647/2019, WA.1646/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:6:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1644 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17735/2019 of HIGH COURT APPELLANT/PETITIONER: MUNDUR SERVICE CO-OPERATIVE BANK LTD. NO. F 1650, MUNDUR, PALAKKAD - 678 592, REPRESENTED BY ITS SECRETARY, JIJUMON.A.J., AGED 45, S/O.JAYAPRAKASH.A.L. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER WARD 2, AYAKAR BHAVAN, PALAKKAD - 678 014 2 COMMISSIONER OF INCOME TAX (APPEALS) SAKTHAN NAGAR, THRISSUR - 680 001 OTHER PRESENT: SRI JOSE JOSEPH STANDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1642/2019, WA.1651/2019, WA.1641/2019, WA.1652/2019, WA.1649/2019, WA.1647/2019, WA.1646/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:7:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1646 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17789/2019 of HIGH COURT APPELLANT/PETITIONER: KUMARAMPUTHUR SERVICE CO-OPERATIVE BANK LTD., NO.P 373, MANNARKKAD COLLEGE P.O., KUMARAMPUTHUR, MANNARKKAD, PALAKKAD - 678 583, REPRESENTED BY ITS SECRETARY-IN-CHARGE, N.KRISHNADAS, AGED 56, S/O.RAGHAVAN NAIR. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER, WARD 4, AYAKAR BHAVAN, PALAKKAD - 678 014. 2 COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR - 680 001. OTHER PRESENT: SRI JOSE JOSEPH STANDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1642/2019, WA.1651/2019, WA.1641/2019, WA.1652/2019, WA.1649/2019, WA.1647/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:8:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1647 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17731/2019 of HIGH COURT APPELLANT/PETITIONER: M/S.KONGAD SERVICE CO-OPERATIVE BANK LTD., NO.P-538, KONGAD POST, PALAKKAD -678 631, REPRESENTED BY ITS SECRETARY, SHYLA K., AGED 55, D/O.C.GANGADHARAN NAIR. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER, WARD-2, AYAKAR BHAVAN, PALAKKAD - 678 014. 2 COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR-680 001. OTHER PRESENT: SRI JOSE JOSEPH STANDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1642/2019, WA.1651/2019, WA.1641/2019, WA.1652/2019, WA.1649/2019, WA.1646/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:9:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1649 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17740/2019 of HIGH COURT APPELLANT/PETITIONER: THATHAMANGALAM SERVICE CO-OPERATIVE BANK LTD NO. P 502, THATHAMANGALAM, PALAKKAD 678 012, REPRESENTED BY ITS SECRETARY K. JYOTHI, AGED 42, W/O. DIVYA PRASAD. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER, WARD 5, AYAKAR BHAVAN, PALAKKAD 678 014 2 COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR 680 001 OTHER PRESENT: SRI JOSE JOSEPH STANDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1642/2019, WA.1651/2019, WA.1641/2019, WA.1652/2019, WA.1647/2019, WA.1646/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:10:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1651 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17783/2019 of HIGH COURT APPELLANT/PETITIONER: PERINGODE SERVICE CO-OPERATIVE BANK LTD NO F.552, 13/325, PARASSERY POST, KONGAD, PALAKKAD-678 582, REPRESENTED BY ITS SECRETARY IN CHARGE, M.P.SASIKALA, AGED 57, D/O M.P.VASUDEVAN. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER WARD 2, AYAKAR BHAVAN, PALAKKAD-678 014. 2 COMMISSIONER OF INCOME TAX (APPEALS), SAKTHAN NAGAR, THRISSUR-680 001. OTHER PRESENT: SRI JOSE JOSEPH STANDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1642/2019, WA.1641/2019, WA.1652/2019, WA.1649/2019, WA.1647/2019, WA.1646/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:11:- IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI FRIDAY, 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WA.No.1652 of 2019 AGAINST JUDGMENT DATED 01.07.2019 IN WP(C)NO.17729/2019 of HIGH COURT APPELLANT/PETITIONER: MANNARKKAD GOVT EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD, P-630, MANNARKKAD P.O, PALAKKAD-678 582, REPRESENTED BY ITS SECRETARY, ZAIBUNEESA C.P, AGED 57, D/O. MOIDEENKUTTY. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS: 1 INCOME TAX OFFICER WARD 4, AYAKAR BHAVAN, PALAKKAD-678 014 2 COMMISSIONER OF INCOME TAX (APPEALS) SAKTHAN NAGAR, THRISSUR-680 001 OTHER PRESENT: SRI JOSE JOSEPH STANDING COUNSEL THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 19.07.2019, ALONG WITH WA.1644/2019, WA.1642/2019, WA.1651/2019, WA.1641/2019, WA.1649/2019, WA.1647/2019, WA.1646/2019, WA.1643/2019, WA.1640/2019, COURT ON SAME DAY DELIVERED FOLLOWING: W.A. Nos.1639/2019 & Connected cases -:12:- C.K.ABDUL REHIM & R.NARAYANA PISHARADI,JJ. ================== W.A. No.1639, 1640,1641,1642, 1643, 1644, 1646, 1647, 1649, 1651 & 1652 of 2019 -------------------- -------------------- Dated this 19th day of July,2019 JUDGMENT C.K.ABDUL REHIM, J. Since identical judgments of Single Judge are under challenge in these writ appeals, all cases were considered together and disposed of through this common judgment. 2. Ext.P4 orders of Commissioner of Income Tax (Appeals) were challenged in writ petitions. appellants are Co-operative Societies registered under Kerala Co-operative Societies Act, 1969. Assessments of income tax made against societies were challenged claiming deductions allowable under Section 80P of Income Tax Act, 1961(hereinafter referred to as 'the IT Act'). interim applications filed seeking stay against realisation of tax assessed was considered by Appellate Authority and interim stay were granted in all cases by insisting W.A. Nos.1639/2019 & Connected cases -:13:- upon payment of 20% of disputed amount, pending disposal of appeals. When those orders were challenged in writ petitions, learned Single Judge found that insistence for payment of 20% was made based on directions issued by Central Board of Direct Taxes(CBDT). It was found that there is sufficient consideration of merits and there is application of mind from side of Appellate Authority. Hence, by observing that no interference is warranted against interim order in exercise of power vested under Article 226 of Constitution of India, challenges were repelled. However, on request of appellants, instalment facility was granted by allowing payment of amount insisted upon, in five equal monthly instalments. 3. In writ appeals it is contended that, after finalisation of assessments in all these cases, there occurred change in principle of law involved, with respect to deductions permissible under Section 80P of IT Act. It is pointed out that Full Bench of this Court in Mavilayi Service Co operative Bank v. Commissioner of Income Tax (2019(2) KLT 597(FB)) held that W.A. Nos.1639/2019 & Connected cases -:14:- Division Bench judgment in Chirakkal Service Co operative Bank Ltd. v. Commissioner of Income Tax (2016(2) KLT 535) is no more good law, in view of ruling of Apex Court in Citizen Co-operative Society Ltd. v. Assistant Commissioner of Income Tax (2017(4)KLT Online 2013(SC)). It was held therein that, by reason of sub-section (4) of Section 80P, Assessing Officer has to conduct enquiry into factual situations as to activities of Assessee society and to arrive at conclusion whether benefits can be extended or not, in light of said provision. Therefore Full Bench found that law laid down by Division Bench of this Court in Perinthalmanna Co operative Bank Ltd. v. Income Tax Officer and Another (2014(1) KLT Online 1117) has to be affirmed. 4. Contention raised is to effect that, in view of reversal of principle settled in Chirakkal Society's case (supra) assessments completed against appellants requires re-look. Therefore it was contended that insistence for payment of 20% of disputed amount of tax, for granting stay pending disposal of appeal, was W.A. Nos.1639/2019 & Connected cases -:15:- improper and becomes unreasonable. 5. On contrary, learned standing counsel for Government of India (Taxes) contended that, in all these cases there are specific findings entered by Assessing Authority that major activities conducted by Co-operative societies are in nature of banking business and they have given majority of loans which are not coming within ambit and scope of objective of societies and such activities cannot be taken as one falling within scope of Primary Agricultural Credit Societies(PACS). Further, it is contended that there exists no legal grounds for this court to interfere with interim orders passed by Appellate Authority, which falls within discretionary jurisdiction of such authorities. 6. As contended on behalf of revenue, under normal circumstances, interference with respect to interim orders passed by statutory Appellate Authorities has to be restrained. Law remaining settled in this field is primarily that, Appellate Authorities while considering question of granting interim stay shall take into consideration of prima facie merit in appeals. This court as well as W.A. Nos.1639/2019 & Connected cases -:16:- Apex Court has deprecated practice of insisting upon part payments without prima facie consideration of merits and without proper application of mind. Decisions are mainly to extent that, those aspects should also reflect in such interim orders. However, analysis on basis of these settled principle need not to be ventured in cases at hand, because grounds of challenge is mainly on basis of subsequent Full Bench ruling. 7. We take note of fact that this Division Bench had already remanded certain Income Tax Appeals, which were filed challenging orders of Income Tax Appellate Tribunal, on very same subject, in view of Full Bench decision in Mavilayi Society's case (supra). We had also occasion to consider batch of writ appeals which were filed challenging identical judgments of Single Bench in matter of conditional orders passed by first Appellate Authorities, in W.A. No.1529 of 2019 and connected cases, dated 1st July, 2019. In all these matters we have taken view that, in view of law remaining settled through Full Bench decision, factual aspects needs re-look, based on nature of activities of appellant Co-operative W.A. Nos.1639/2019 & Connected cases -:17:- societies. However, contention of learned standing counsel that assessment orders, even though were finalised prior to Full Bench decision, are in strict consonance with principle contained therein assumes importance. This is question which is for consideration of Appellate Authority, probably upon calling for report of Assessing Authority, because there exists no power of remand vested with Commissioner of Income Tax (Appeals). Taking note of such situation, we are of opinion that ultimate finding with respect to question of allowability of deductions under Section 80P is yet to be rendered by Appellate Authority. Therefore uniform insistence for payment of 20% of amount, pending disposal of appeals, cannot be held as justified. Further, we take note of fact that all appellants are registered Co-operative societies functioning with remarkable capital assets. Therefore it cannot be said that there will be any difficulty for realising liabilities, if ultimate decision goes against appellants. Hence we are inclined to direct Appellate Authority for early disposal of appeals and till then to grant absolute stay without insisting upon W.A. Nos.1639/2019 & Connected cases -:18:- payment of any portion of any disputed amounts. Under above mentioned circumstances, all above appeals are hereby allowed. impugned judgments of Single Judge are hereby set aside. Ext-P4 interim order impugned in all these cases are modified to extent of granting absolute stay with respect to realisation of disputed amount of tax in respective appeals, pending disposal of such appeals. Commissioner of Income Tax (Appeals) is hereby directed to dispose of appeals itself, at earliest possible, after affording opportunity to appellants. Sd/- C.K.ABDUL REHIM JUDGE Sd/- R. NARAYANA PISHARADI JUDGE DST //True copy// PA.To Judge Pulpatta Co-Operative Urban Credit Society Ltd. v. Income-tax Officer, Ward-3, Palakakd / Commissioner of Income-tax (Appeals), Thrissur