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TMI Blog2018 (6) TMI 1515X X X X Extracts X X X X X X X X Extracts X X X X ..... when no return was filed. In all the other cases, returns were filed; but the question arises as to whether the Societies were entitled to claim deduction under Section 80P(2)(iii) of the Income Tax Act, 1961 [for brevity "IT Act"]. 2. The questions of law framed in the appeals are re-framed as follows: I.T.A.No.273/2015: Whether the Tribunal was correct in having affirmed the orders of the lower authorities declining deduction under Section 80P for the mere reason that no return was filed; when deduction as permissible under Section 80A(1) is of the total income? I.T.A.Nos. 139, 140, 142, 143, 151, 153, 154 & 156 of 2016: (i) Whether the Tribunal was correct in having upheld the order of the first appellate authority granting deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the deduction under Section 10A has to be made from the gross total income at the time of computing the total income under Chapter IV of the Act and not at the stage of computation under Chapter VI. We do not think that the said proposition would apply here, since it is not the particular income that is granted a deduction, but the institution which is granted it on the ground of it being a Co-operative Society, as defined under Section 80P, carrying on such activities from which the income is generated as specified in sub-section (2) of Section 80P. We also see that the AO had relied on Section 80A(5) to specifically decline the deduction claim under Section 80P for reason of the same having not been made with the filing of a proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Section 139; even when a notice was issued under Section 142(1), is not a technical defect. We also do not think that the decision in Yokogawa India Ltd. applies, since deduction as spoken of in Section 80A(1) with reference to the provision under sub-chapter 'C' being 80P, is with respect to the institution being a Co-operative Society. Only when a return is filed claiming deduction under Section 80P, the AO will be enabled to first consider the question of eligibility of the assessee and then consider the allowability of deduction from the total income. We, hence, answer the question of law framed in I.T.A.No.273 of 2015 against the assessee and in favour of the Revenue. The I.T.A. would stand dismissed. 6. The Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x and taps trees belonging to its members and other persons, which takes it out of an activity of marketing of agricultural produce grown by the members alone. It is also emphasized that essentially the Society is engaged in vending of toddy under license, which cannot be said to be marketing of agricultural produce. What is intended by the exemption provision is to grant an incentive to the agricultural activity, which cannot be extended to 'toddy' coming under the definition of 'liquor' as defined under the Abkari Act. 7. We are unable to agree with the contentions of the learned Standing Counsel. We have considered the issue in the light of the findings on facts elaborately taken note of by the first appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial nature of the activity of growing trees for the purpose of tapping toddy. The fact of the tree tax being paid by the Society is only on account of the license of tapping and vending having been obtained by the Society. The tax so paid is on behalf of the members of the Society. We also have to notice that tapping of toddy is a traditional agricultural enterprise within the State and the State also encourages it; as distinguished from the foreign liquor trade. We, hence, do not find any reason to interfere with the orders of the Tribunal. We answer the questions of law as framed by us in the appeals filed by the Revenue, against the Revenue and in favour of the assessee. 9. One other question raised by the Revenue is as to the perversit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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