9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 762 - HC - Income TaxDeduction u/s 80P(2)(b)(i) - milk procured from member-village societies and marked to the federal Society - whether the appellant was a primary society or not for the purpose of Section 80 P(2)(b)(i) ? - whether the appellant is an Apex Society or a Central Society ? - HELD THAT - There is no dispute that the petitioner is a Co-operative society registered under the provisions of the Tamil Nadu Co-operative Societies Act, 1983. The expression Primary Society has not been defined in the Income Tax Act, 1961. Only expression - primary co-operative agricultural and rural development bank has been defined. The expression Primary Society has not been defined in the Income Tax Act, 1961. The expression Primary Society has been defined in Section 2(21) of the Tamil Nadu Co-operative Societies Act, 1983. Thus, only if the appellant is neither an Apex Society or a Central Society , as defined above, it will not be entitled to the benefit of the deduction under Section 80 P(2)(b)(i) of the Income Tax Act, 1961. There is no discussion as to whether the petitioner is an Apex Society or a Central Society . Instead, the case was argued on the strength of the G.O.Ms. No.555 dated 21.3.1980. Neither the AO nor the Appellate Commissioner or the Appellate Tribunal have examined the status of the appellant from the point of the view of the definition of a Primary Society in Section 2(21) of the Tamil Nadu Co-operative Societies Act, 1983. Since the issue as to whether the appellant is an Apex Society or a Central Society or not has not been examined by any of the lower authority, viz the Assessing Officer, Appellate Commissioner or the Appellate Tribunal, we are forced to interfere with the impugned orders. We are therefore of the view, the impugned common order passed by the Income Tax Appellate Tribunal have to be set aside and the cases be remitted back to the Assessing Officer for re-examine the issue as to whether the appellant would be Primary Society or whether the appellant was an an Apex Society or a Central Society or not. We, therefore remit the case back to the Assessing Officer to re-examine the issue in the light of the definition of the Tamil Nadu Co-operative Societies Act, 1989 and to pass a afresh order in the light of the definition contained in the Tamil Nadu Co-operative Societies Act, 1989, within a period of six months from the date of receipt of a copy of this order by the Assessing Officer. The appellant shall produce documents to substantiate its status before the Assessing Officer.
Issues Involved:
1. Entitlement to deduction under Section 80P(2)(b)(i) of the Income Tax Act, 1961. 2. Validity of reopening of assessment under Section 147 of the Income Tax Act. 3. Determination of whether the appellant is a "primary society" or an "apex society" or "central society" under the Tamil Nadu Co-operative Societies Act, 1983. Analysis of Judgment: 1. Entitlement to Deduction under Section 80P(2)(b)(i): The primary issue is whether the appellant is entitled to a deduction under Section 80P(2)(b)(i) of the Income Tax Act, 1961. The Tribunal had previously denied this deduction, stating that the appellant, a District Co-operative Milk Producers Union, is not a primary society but a federal co-operative society. The Tribunal referenced the Supreme Court's decision in Assam Cooperative Apex Marketing Society Ltd. v. CIT, which emphasized that primary societies must directly engage in activities like supplying milk, oilseeds, fruits, or vegetables raised by their members. The Tribunal noted that the appellant collects milk from primary societies at the village or taluk level, processes it, and supplies it to state apex societies. Therefore, the appellant's activities extend beyond merely supplying milk, including processing milk and producing by-products such as butter and ghee. Consequently, the Tribunal concluded that the appellant does not meet the criteria of a "primary society" as specified in Section 80P(2)(b). 2. Validity of Reopening of Assessment under Section 147: The appellant contended that the reopening of assessments for the years 1992-93 and 1993-94 under Section 147 was invalid, arguing that there was no failure to disclose material facts necessary for assessment. They maintained that all relevant details were available in the returns and annexures filed. The appellant also argued that the notice for reopening was issued beyond the permissible period of four years, making it time-barred. The Tribunal, however, had not addressed the issue of reopening in its order, focusing instead on the merits of the case. The appellant argued that the Tribunal should have considered the Supreme Court's decisions, which establish that reopening based on a mere change of opinion is unsustainable in law. 3. Determination of Status as "Primary Society," "Apex Society," or "Central Society": The core of the dispute revolves around whether the appellant qualifies as a "primary society" under the Tamil Nadu Co-operative Societies Act, 1983. The Act defines a "primary society" as a registered society that is neither an apex society nor a central society. The appellant argued that it is a primary society engaged in supplying milk to a federal society, as per a government order (G.O.Ms.No.555). The Tribunal and lower authorities did not examine the appellant's status in light of the definitions provided in the Tamil Nadu Co-operative Societies Act. The High Court noted this oversight and emphasized the need to determine whether the appellant is an apex society or a central society, which would disqualify it from being considered a primary society. Conclusion and Remand: The High Court concluded that the issue of the appellant's status as a primary society needs thorough examination. It set aside the impugned orders of the Tribunal and remanded the case back to the Assessing Officer. The Assessing Officer is directed to re-examine the appellant's status in light of the definitions in the Tamil Nadu Co-operative Societies Act and pass a fresh order within six months. The appellant is required to produce relevant documents to substantiate its status. The appeals were disposed of with these observations, and no costs were awarded.
|
