9911796707
|
Home
Issues Involved:
The judgment involves the interpretation of section 80P(2)(a)(vi) of the Income-tax Act regarding the entitlement of a co-operative society to deduction from its gross total income based on the collective disposal of the labour of its members. Judgment Details: Issue 1: Interpretation of Section 80P(2)(a)(vi) - Collective Disposal of Labour The petitioner, a co-operative society of graduate engineers, disputed the assessment of income-tax for 1984-85, claiming benefit u/s 80P(2)(a)(vi) for deduction of profits and gains due to its collective disposal of member labour. However, all authorities, including the Appellate Tribunal, held that the society did not meet the criteria as the members did not directly engage in labour but provided only supervisory work. The court emphasized that the society's income must result from the actual labour of its members, whether manual or mental, specialized to the society's activities. The judgment clarified that the society's income is exempt only if derived from the labour of its members, not from employed labour or capital investments. Issue 2: Alternative Remedy and Court's Jurisdiction The court addressed the contention regarding the availability of an alternative remedy u/r 256 of the Income-tax Act for reference to the court, stating that while such remedies should be pursued, the court's extraordinary jurisdiction can be invoked for interpreting statutory provisions. The court rejected the argument that the petitioner should have raised the issue of member labour type during assessment, as the court's role is not to disturb factual findings. The judgment cited precedent to support the petitioner's right to raise legal questions under articles 226 and 227 of the Constitution. Conclusion: The court upheld the Appellate Tribunal's decision that the society did not qualify for the deduction under section 80P(2)(a)(vi) as its income did not directly result from the labour of its members. The judgment emphasized that the society's income must be attributable to the specialized labour of its members for exemption. The writ application was dismissed, affirming the Tribunal's decision.
|
