Mangalam Service Co-Operative Bank Ltd. and Another vs Income Tax Officer and Others

K.M. Joseph, J.—Appellants are the writ petitioners. Appellants are primary co-operative credit societies registered under the Kerala Co-operative Societies 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 that respondents are not liable to proceed against the petitioners till a final decision is taken in SLP (C) No. 3976 of 2010. Ext. P3 is the notice issued under s. 142(1) of the IT Act, 1961 calling to submit returns of income. Ext. P5 is yet another notice directing to comply with the directions or to face proceedings under s. 144 of the Act. Ext. P7 is the further notice sent by the first respondent to the first appellant requiring the first appellant to specify the category of person in which the first appellant would be called in the light of definition of ''person'' under s. 2(31) of the Act. The first appellant submitted detailed explanation. Ext. P8 and Ext. P9 are the notices issued by the first respondent to the second appellant seeking information under s. 142 of the Act. We find from the judgment of the learned Single Judge that in support of the contention that the appellants are not persons contemplated under s. 142(1) it is contended that notices were issued invoking the power under s. 133(6) of the Act and those notices were challenged before this Court by some other persons and notices were upheld by the Single Bench and Division Bench of this Court and that in an SLP filed, the apex Court has issued notice and stayed the proceedings. The learned Single Judge took the view that a combined reading of s. 142(1) and s. 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 the notices issued were without jurisdiction. Learned Single Judge also took the view that the terms of s. 133(6) and s. 142(1) are incomparable and therefore the pending proceedings before the apex Court cannot be of any assistance to the appellants. It is further held that even if it is assumed that the proceedings are of any relevance, the Single Judge was bound by the Division Bench, the fact that the apex Court 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 this Court in the judgment in Abdu Rahiman Vs. District Collector, and the writ petition was dismissed. We heard the learned counsel for the appellants and the learned standing counsel for the Revenue. Sec. 2(31) of the IT Act, 1961, defines a person.

(31) ''person'' includes--

(i) an individual,

(ii) an HUF,

(iii) a company,

(iv) a firm,

(v) an AOP or a BOI, 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, an AOP or a BOI or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains.

Sec. 133 confers power on the officer concerned to call for information.

Sec. 142 contemplates inquiry before assessment. Under s. 142 in respect of a person who has filed return or not filed return, the officer has power to call for information obviously for the purpose of making correct assessment. A perusal of the definition of the word ''person'' would show that it includes within its sweep all juridical persons. Appellants are co-operative societies. Indisputably they are registered under the Cooperative Societies Act. Sec. 9 of the Kerala Co-operative Societies Act reads as follows :

Co operative societies to be bodies corporate : The registration of a society shall render it a body corporate by the name under which it is registered, having perpetual succession and a common seal and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was constituted :

Provided that the Government and the Registrar shall have power to regulate and control the working of a society for the economic and social betterment of its members and the general public.

Therefore, appellants are co-operative societies which have been registered and which are treated as bodies corporate vide s. 9 of the Kerala Co-operative Societies Act.

Learned standing counsel for the Revenue also submits that appellants are really estopped from denying they are persons for the reason that under s. 80P of the Act the income of the co-operative society is exempted and they are claiming benefit under s. 194A(viia). It is submitted by the learned standing counsel for the Revenue that the objection filed by the appellants itself would show that they are claiming benefit under s. 194A(iiia) of the Act. Sec. 194A speaks about any person, not being an individual or an HUF. Therefore, the definition clause except to the extent it is otherwise provided in the section would necessarily apply, runs the argument. 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 s. 2(31) for the reason that it is an AOP. We would think that, at any rate, under s. 2(31) a person comprehends juristic entity. Having regard to the fact that appellants are registered under the Cooperative Societies Act appellants must be treated as bodies corporate, therefore juristic person capable of exercising all the rights of natural person as provided in the Act. It would therefore make them persons. No doubt, the learned counsel for the appellants would point out that the apex Court has admitted the SLP and an order of stay is granted. He also brought to our notice the judgment of the Division Bench of this Court rendered in the case of some other co-operative societies directing proceedings to be kept in abeyance. But, he fairly concedes that the said litigation relates to proceedings under s. 133(6). We are not inclined to stall proceedings under the Act on the score that the appellants are not persons. The proceedings are taken admittedly under s. 142 as already noted. Therefore, we are not inclined to interfere. The appeal fails, and it is dismissed.