2021 (12) TMI 565 - HC - Income Tax

Exemption u/s 80P(2)(a)(vi) - whether the assessee was engaged in the collective disposal labour of its members? - HELD THAT - Society s functions are based upon its bye laws. The bye laws itself would have thrown light upon the question that arises for consideration in the instant case. On an examination of the bye laws, the Tribunal could have easily come to a conclusion whether the income derived by the society was through collective disposal of the labour of its members. Materials like the bye laws were already on record for the Tribunal to appreciate the claim of the assessee. We find on a consideration of the order of the Tribunal that the remand to the assessing officer was not necessary in the peculiar facts of the case and on the other hand, as a final fact finding authority Tribunal itself could have appreciated the facts by itself. The assessment relates to the assessment year 2008-09 and at this distance of time, it is not in the interests of all to remand it to the assessing officer. We set aside the order of the Tribunal and remand the same for fresh consideration by the Tribunal itself. The Tribunal shall examine the issue arising under Section 80P(2)(6)(a) of the Act, as expeditiously as possible, preferably within six months.

Summary

Issues:
1. Application of TDS on rent payments under Section 40(a)(ia) r.w.s.194J.
2. Taxation of interest incomes received from members.
3. Eligibility for deduction under Section 80P(2)(a)(vi) of the Income Tax Act.

Analysis:
1. The appellant, a co-operative society, filed a return declaring a loss, but the assessing officer demanded income tax and interest. The CIT (Appeal) allowed the appeal, stating the society's income was exempt under Section 80P(2)(a)(vi) of the Act. The Tribunal remanded the issue for detailed examination of the bye laws. The High Court found the remand unnecessary, as the Tribunal could have decided based on existing records. The Court set aside the Tribunal's order and remanded it for fresh consideration by the Tribunal itself, emphasizing expeditious resolution within six months.

2. The Tribunal's decision to remand the claim for exemption under Section 80P(2)(a)(vi) to the assessing officer was challenged. The High Court held that the Tribunal could have decided based on existing records, including the society's bye laws, without the need for remand. The Court directed the Tribunal to re-examine the issue promptly, allowing the appellant to submit additional materials if required.

3. Section 80P(2)(a)(vi) allows deduction if a co-operative society is engaged in the collective disposal of its members' labor. The Tribunal had remanded the matter for fresh consideration, but the High Court found this unnecessary. The Court directed the Tribunal to reevaluate the issue promptly, emphasizing the availability of existing materials for assessment. The appellant was granted the liberty to provide additional materials in support of the claim under Section 80P(2)(a)(vi) within the legal framework.