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2019 (7) TMI 1444 - HC - Income TaxAlternate remedy - Deduction u/s 80P - whether Primary Agricultural Societies carrying on the business of providing credit facilities to its members are entitled to claim deductions? - HELD THAT - There is a time limit of 30 days prescribed for preferring an appeal under Section 246A of IT Act, which lies to Commissioner (Appeals). At the request of writ petitioner, time that has been spent in the instant writ petition i.e., time from the date of filing of instant writ petition to the date on which this order is made available shall stand excluded for computing limitation for filing an appeal under Section 246A of IT Act. Even after such exclusion, if there is a delay, it is open to the writ petitioner to seek condonation of the same under Section 249(3) of IT Act and such a prayer for condonation of delay shall be dealt with by the Appellate Authority on its own merits. This writ petition is disposed of, leaving it open to the writ petitioner to avail alternate remedy of statutory appeal to Commissioner (Appeals) under Section 246A of IT Act, in the manner set out supra in this order.
Issues:
1. Claim for deductions under Section 80P of IT Act by a Primary Agricultural Cooperative Credit Society. 2. Assessment order by the Income Tax Department under Section 143(3) of IT Act for Assessment Year 2016-17. 3. Availability of alternate remedy of statutory appeal under Section 246A of IT Act. Analysis: Issue 1: Claim for deductions under Section 80P of IT Act The case involved a Primary Agricultural Cooperative Credit Society challenging an assessment order by the Income Tax Department. The petitioner claimed entitlement to deductions under Section 80P of the IT Act, citing precedents such as the Tiruchengode Agricultural Producers Cooperative Marketing Society case and the Veerakeralam Primary Agricultural Co-operative Credit Society principle. The High Court acknowledged the entitlement of Cooperative Societies to claim deductions under Section 80P, as established in previous judgments. Issue 2: Assessment Order under Section 143(3) of IT Act The impugned order dated 28.12.2018 pertained to the Assessment Year 2016-17 and was made by the Income Tax Department under Section 143(3) of the IT Act. The order raised concerns regarding large deductions under chapter VI-A from Total Income and low income in comparison to high loans/advances/investment in shares appearing in the balance sheet. The Court noted that the issue of deductions under Section 80P did not survive due to previous judgments, but the Income Tax Department had taken the matter to the Supreme Court, pending the outcome of Special Leave Petitions. Issue 3: Availability of Alternate Remedy The Court highlighted the availability of an alternate remedy to the petitioner through a statutory appeal under Section 246A of the IT Act. The petitioner was advised to opt for the statutory appeal excluding the issue covered by previous judgments. The Court emphasized the importance of adhering to the alternate remedy rule, stating that it is a self-imposed restraint and a rule of discretion rather than compulsion. Citing precedents like the Satyawati Tandon case and the K.C. Mathew case, the Court underscored the need to exhaust statutory remedies before seeking relief through writ jurisdiction. The petitioner was directed to avail the alternate remedy of a statutory appeal to the Commissioner (Appeals) under Section 246A of the IT Act. In conclusion, the High Court disposed of the writ petition, leaving it open for the petitioner to pursue the statutory appeal while emphasizing the importance of adhering to the alternate remedy rule in fiscal law statutes.
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