Keerampara Service Co-Operative Bank Ltd Vs ITO (Kerala High Court)
Kerala High Court has set aside income tax reassessment proceedings initiated against Keerampara Service Co-Operative Bank Ltd., ruling that notices and assessment orders issued under a Permanent Account Number (PAN) that had been cancelled denied the petitioner a proper opportunity to contest the matter. The judgment, delivered in the case of Keerampara Service Co-Operative Bank Ltd Vs ITO, highlights the importance of correct taxpayer identification in tax administration.
Keerampara Service Co-Operative Bank Ltd., classified as a Primary Agricultural Credit Co-operative Society, is engaged in providing credit services to its members. The society asserted its eligibility for exemption under Section 80P of the Income Tax Act, 1961. Initially, the bank was allotted a PAN (AAECK5393D) that incorrectly identified its status as a ‘company’ instead of a ‘co-operative society’. This misclassification prevented the bank from claiming the rightful Section 80P exemption. Recognizing the error, the bank applied for and was subsequently issued a new PAN (AAIAK3165H), which correctly reflected its status as an Association of Persons (AOP).
Despite the issuance of the new PAN, the Income Tax Officer (ITO) proceeded to issue a notice under Section 148 of the Income Tax Act, 1961, on March 30, 2021, initiating reassessment proceedings. Crucially, this notice, and all subsequent communications including the final assessment order (Ext.P7) dated March 31, 2022, consistently referred to the cancelled PAN. The bank argued that this reliance on a defunct PAN prevented it from effectively contesting the matter or even pursuing appellate remedies, as attempts to upload an appeal against the assessment order were unsuccessful due to the PAN discrepancy.
