2019 (7) TMI 1445 - HC - Income Tax

Alternate 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.

Summary

Issues:
1. Entitlement of deductions under Section 80P of IT Act for Cooperative Societies.
2. Assessment order challenge under Section 143(3) of IT Act for Assessment Year 2016-17.
3. Alternate remedy available through appeal under Section 246A of IT Act.

Analysis:
1. The judgment revolves around the entitlement of deductions under Section 80P of the Income Tax Act for Cooperative Societies registered under the Tamil Nadu Cooperative Societies Act, 1983. The petitioner, a Primary Agricultural Cooperative Credit Society, challenged an assessment order dated 28.12.2018 made by the lone official respondent under Section 143(3) of the IT Act. The court referenced previous cases, including the Tiruchengode Agricultural Producers Cooperative Marketing Society case and the Veerakeralam Primary Agricultural Co-operative Credit Society principle, which established that such Cooperative Societies are indeed entitled to claim deductions under Section 80P of the IT Act.

2. The impugned order in question focused on two main issues: (i) a large deduction under Chapter VI-A from Total Income, and (ii) low income compared to high loans/advances/investment in shares appearing in the balance sheet. The court noted that the first issue was already settled by previous judgments, but the Income Tax Department had taken the matter to the Supreme Court. The petitioner expressed intent to pursue a statutory appeal for aspects of the impugned order not covered by the established principles.

3. The judgment emphasized the availability of an alternate remedy through an appeal under Section 246A of the IT Act. The court highlighted the 30-day time limit for filing such an appeal to the Commissioner (Appeals) and provided for the exclusion of time spent in the writ petition for computing the limitation. The court also discussed the principle of self-imposed restraint regarding alternate remedies in writ jurisdiction, citing cases where the rule was applied rigorously in fiscal law statutes. The judgment concluded by disposing of the writ petition, leaving the petitioner open to avail the statutory appeal as an alternate remedy.

In summary, the judgment clarified the entitlement of Cooperative Societies to deductions under Section 80P of the IT Act, addressed specific issues in the impugned assessment order, and guided the petitioner on the available alternate remedy through a statutory appeal under Section 246A of the IT Act.