2020 (3) TMI 555 - HC - Income Tax

Deduction u/s 80P - HELD THAT - We had occasion to consider an identical issue in a batch of writ petitions filed by several Primary Agricultural Cooperative Societies, and in the case of K.2058, Saravanmpatti Primary Agricultural Co-operative Credit Society Ltd., Vs. The Income Tax Officer 2020 (2) TMI 214 - MADRAS HIGH COURT while dealing with a claim of deduction under Section 80P of the Income Tax Act by the Co-operative Societies. Aforesaid order is equally applicable to the present case as well, vis-a-vis, this issue. The petitioner is thus permitted to file a statutory appeal challenging the order of assessment before the Commissioner of Income Tax (Appeals) within a period of three (3) weeks from today. No recovery of the demand in relation to issue (ii), that is, in relation to deduction claimed under Section 80P be enforced till such time the appeal is disposed by the first appellate authority.

Summary

Issues:
1. Disallowance under Section 69A of the Income Tax Act for Assessment Year 2012-13
2. Claim of deduction under Section 80P of the Income Tax Act

Analysis:

*Issue 1: Disallowance under Section 69A*
The petitioner, a Primary Agricultural Cooperative Society Limited, challenged an order of assessment for the Assessment Year 2012-13 under the Income Tax Act. The High Court found no grounds to interfere under Article 226 of the Constitution of India, directing the petitioner to pursue appeal remedy. This issue was disposed of accordingly.

*Issue 2: Claim of Deduction under Section 80P*
Regarding the claim of deduction under Section 80P, the High Court referred to a previous judgment involving several Primary Agricultural Cooperative Societies. The court highlighted the distinction between A and B class members within the society. The Assessing Authority rejected the claim of deduction under Section 80P, citing a Supreme Court judgment and a Division Bench ruling. The Division Bench held that the society would be entitled to deduction under Section 80P, emphasizing the definitions of 'members' and 'associate members' under the TNCS Act. The court pointed out errors made by the Assessing Officer and upheld the relief granted to the society by the CIT (A) and confirmed by the Tribunal.

The High Court directed the petitioners to file a statutory appeal before the Commissioner of Income Tax (Appeals) within three weeks, with a stay on recovery of the demand until the appeal is disposed. The judgment emphasized the legal interpretations of the TNCS Act and Section 80P, providing detailed reasoning for the decision. The petition was disposed of accordingly, allowing the petitioner to challenge the order of assessment before the first appellate authority.

This comprehensive analysis of the judgment highlights the legal intricacies involved in the issues of disallowance under Section 69A and the claim of deduction under Section 80P of the Income Tax Act for the Assessment Year 2012-13.