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2019 (8) TMI 19 - HC - Income TaxAlternate remedy of a statutory appeal - Deduction u/s 80P - whether Primary Agricultural Societies carrying on the business of providing credit facilities to its members are entitled to claim deductions under Section 80P? - HELD THAT - Alternate remedy is available to the writ petitioner by way of an appeal under Section 246A of IT Act. 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. 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. It is necessary to mention that alternate remedy rule qua exercise of writ jurisdiction is a self imposed restraint. It is a rule of discretion and it is not a rule of compulsion.
Issues:
1. Entitlement of Cooperative Society to claim deductions under Section 80P of IT Act. 2. Assessment order issues related to deductions under Chapter VIA, investments/advances/loans, and high cash in hand. 3. Availability of alternate remedy of statutory appeal under Section 246A of IT Act. Entitlement of Cooperative Society to Claim Deductions under Section 80P of IT Act: The writ petitioner, a Primary Agricultural Cooperative Credit Society, challenged an assessment order under Section 143(3) of the Income Tax Act, 1961. The key argument was the entitlement of Cooperative Societies, like the petitioner, to claim deductions under Section 80P of the IT Act. This issue was supported by precedents such as the Tiruchengode Agricultural Producers Cooperative Marketing Society case and the Veerakeralam Primary Agricultural Co-operative Credit Society principle, both decided by the Hon'ble Division Bench. The Court acknowledged the ongoing challenge by the Income Tax Department in the Supreme Court regarding this matter, leading to a decision to allow the writ petitioner to opt for a statutory appeal for other aspects of the impugned order, excluding the issue covered by the mentioned principles. Assessment Order Issues: The impugned order focused on three main issues: deduction under Chapter VIA, investments/advances/loans, and high cash in hand compared to the preceding year. Regarding the deduction under Chapter VIA, the Court noted that Cooperative Societies similar to the petitioner are entitled to deductions under Section 80P of the IT Act, based on previous judgments. However, the Court highlighted that the Income Tax Department was challenging these precedents in the Supreme Court. The petitioner was advised to pursue a statutory appeal for the remaining aspects of the impugned order. The Court emphasized the availability of an alternate remedy through a statutory appeal under Section 246A of the IT Act, with specific time limits and provisions for condonation of delay. Availability of Alternate Remedy of Statutory Appeal: The Court emphasized the importance of exhausting alternate remedies before seeking writ jurisdiction, especially in fiscal law statutes. Citing the Satyawati Tandon case and the K.C.Mathew case, the Court reiterated the need to apply the alternate remedy rule with rigor in cases involving taxes and fiscal matters. The writ petition was disposed of, allowing the petitioner to pursue the statutory appeal to the Commissioner (Appeals) under Section 246A of the IT Act. The Court clarified that the alternate remedy rule is a self-imposed restraint, not a compulsion, but should be applied strictly in fiscal law cases. This detailed analysis of the judgment highlights the key issues involved, the legal arguments presented, and the Court's decision regarding the entitlement of Cooperative Societies to claim deductions, assessment order issues, and the availability of the statutory appeal as an alternate remedy.
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