2013 (7) TMI 391 - HC - Income Tax

Co- operative societies whether person u/s 2(31) or not for the purpose of inquiry u/s 142 and power to call for information u/s 133 - Revenue contended that the appellants societies would fall within the four corners of the definition person under section 2(31) for the reason that it is an association of persons - Held that - the appellants are registered under the Co-operative Societies Act the appellants must be treated as bodies corporate, therefore, juristic person capable of exercising all the rights of natural person as provided in the Act u/s 2(31) a person comprehends juristic entity - It would make them persons - the proceedings are taken admittedly under section 142 appeal decided against assessee.

Summary

Issues:
1. Interpretation of the definition of "person" under section 2(31) of the Income-tax Act, 1961.
2. Jurisdiction of the Income Tax Department to issue notices to co-operative credit societies.
3. Consideration of co-operative societies as "persons" under the Act.
4. Application of section 142(1) and section 133(6) in the context of the case.

Analysis:
1. The primary issue in this case revolves around the interpretation of the definition of "person" under section 2(31) of the Income-tax Act, 1961. The Court examined whether co-operative societies, such as the appellants in this case, fall within the ambit of the definition. The definition of "person" includes various entities, and the Court analyzed whether co-operative societies could be considered as "persons" under the Act.

2. Another crucial aspect of the judgment is the jurisdiction of the Income Tax Department to issue notices to co-operative credit societies. The notices issued under section 142(1) and section 133(6) of the Income Tax Act were challenged by the appellants. The Court assessed the validity of these notices and whether they were within the jurisdiction of the Income Tax Department.

3. The Court considered the status of co-operative societies as "persons" under the Income-tax Act. The appellants, being primary co-operative credit societies registered under the Kerala Co-operative Societies Act, argued that they should not be considered as "persons" under section 142(1) of the Act. However, the Court analyzed the legal provisions and held that co-operative societies are also encompassed within the definition of "persons" under the Act.

4. Additionally, the Court examined the application of section 142(1) and section 133(6) in the context of the case. The appellants contended that the notices issued were invoking the power under section 133(6) and not under section 142(1). The Court clarified that co-operative societies, being bodies corporate under the Kerala Co-operative Societies Act, are considered as "persons" and are subject to the provisions of the Income-tax Act. The Court dismissed the appeal, emphasizing that the proceedings were taken under section 142 and not under section 133(6), thereby upholding the jurisdiction of the Income Tax Department in issuing the notices.

In conclusion, the Kerala High Court upheld the jurisdiction of the Income Tax Department to issue notices to co-operative credit societies, considering them as "persons" under the Income-tax Act. The Court clarified the applicability of sections 142(1) and 133(6) in the case, emphasizing that co-operative societies are juristic entities falling within the definition of "persons" under the Act. The appeal was dismissed, affirming the validity of the notices issued to the appellants.