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2021 (9) TMI 1450 - HC - Income TaxAssessment u/s 144B - Deduction u/s 80P - violation of the principles of natural justice - Petitioner is a primary agricultural credit co-operative society registered under the Kerala Co-operative Societies Act 1967 - HELD THAT:- As per the decision in Mavilayi Service Co-operative Bank and Others v. Commissioner of Income Tax, Calicut and Others [2021 (1) TMI 488 - SUPREME COURT] the income tax authority cannot go behind the classification accorded to the society under the Cooperative Societies Act and merely because the word ‘bank’ is included in the name of the society, the same would not be sufficient to deprive a primary agricultural credit society of the benefits of deduction u/s 80P of the Act. Contrary to the findings in the assessment order mentioned earlier, it is seen from Ext. P4 acknowledgement from the Income tax department itself that the Department received petitioner’s reply along with relevant case law as a response on 28-07-2021. Thus there is merit in the petitioner’s contention that the impugned order is bad on account of violation of the principles of natural justice. It is relevant to refer to the Division Bench Judgment of this Court in Poonjar Service Cooperative Bank Ltd. v. Income Tax Officer [2021 (6) TMI 1084 - KERALA HIGH COURT]. In the afore cited judgment, the learned single Judge had refused to interfere with an order of assessment and relegated the assessee to the remedy of a statutory appeal. However in appeal, noticing that the assessing officer had failed to apply the law laid down by the Supreme Court in Mavilayi’s Case [2021 (1) TMI 488 - SUPREME COURT] the Division Bench set aside the order of the learned single Judge and quashed the assessment order and directed the assessing authority to redo the assessment. The assessment order is liable to be set aside on the aforesaid reason also since the assessing officer had clearly failed to apply the dictum laid down Mavilayi’s Case. Ext.P5 order of assessment for the year 2018-19 is quashed and the first respondent is directed to re-do the assessment of the petitioner society for the said assessment year afresh after issuing notice to the petitioner and after affording him an opportunity of being heard.
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