2022 (4) TMI 240 - HC - Income Tax

Reopening of assessment u/s 147 - deduction u/s 80P - HELD THAT - In view of the change in scenario, the respondents / co-operative societies are inclined to appear before the assessing officer, by submitting their explanations and seek the reason for issuance of the notices under Section 148 of the Act and thereafter, act upon in the manner known to law. We are not inclined to interfere with the order impugned herein. However, the appellant shall submit the reasons for reopening the assessment under section 148 of the Act, within a period of two weeks from the date of receipt of a copy of this judgment. On receipt of the same, the respondents / cooperative societies shall file their objections to the notices issued u/s 148, within a period of four weeks.

Issues:
1. Validity of notices under section 148 of the Income Tax Act, 1961 and consequential replies.
2. Entitlement of Primary Agricultural Cooperative Societies to claim deduction under section 80P of the Act.
3. Judicial interpretation of the benefit under Section 80P of the Income Tax Act.
4. Applicability of the judgment dated 02.08.2016 passed by the Division Bench of the Court.
5. Implications of the Special Leave Petitions filed by the Revenue in the Supreme Court.
6. Compliance requirements for the notice under section 148 of the Act.
7. Disposal of the writ petitions and directions issued by the learned Judge.

Analysis:

1. The appeals arose from the order dated 11.06.2019 concerning notices issued under section 148 of the Income Tax Act, 1961 and consequential replies. The respondents, Primary Agricultural Cooperative Societies, had filed writ petitions to challenge the notices proposing to assess/re-assess income for the assessment year 2012-2013. The respondents claimed deduction under section 80P of the Act, which was rejected by the appellant, leading to statutory appeals before the Commissioner of Income Tax (Appeals), Coimbatore.

2. The main contention was the entitlement of the cooperative societies to claim deduction under section 80P of the Act. The learned Judge, considering the submissions, observed that the issue was covered by a previous judgment of the Division Bench, which held that cooperative societies are entitled to the benefit of Section 80P. However, the Revenue had filed a Special Leave Petition (SLP) in the Supreme Court against this order, which was pending consideration.

3. The judgment dated 02.08.2016 by the Division Bench clarified the interpretation of Section 80P, stating that cooperative credit societies were entitled to its benefits. The Revenue had appealed this decision in the Supreme Court, and the matter was permitted to be withdrawn, leaving the question of law open for consideration.

4. The Senior Standing Counsel for the appellant argued that the respondents should have followed the proper procedure upon receiving the notice under Section 148, as outlined by the Supreme Court in previous cases. The learned Judge directed the appellant to provide reasons for reopening the assessment, and the respondents to file objections within a specified period, ensuring compliance with legal procedures.

5. Considering the change in circumstances and the willingness of the cooperative societies to cooperate with the assessing officer, the Court declined to interfere with the impugned order. The appellant was instructed to follow the prescribed procedure for handling objections to the notices issued under section 148, emphasizing the importance of timely compliance and due process.

6. In conclusion, the intra-court appeals were disposed of without costs, and the connected miscellaneous petitions were closed, emphasizing the need for adherence to legal procedures and the rule of law in tax assessments and appeals.

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