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TMI Blog2024 (6) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... erein after to be referred as the "Act"), the respective assessment orders passed u/s 147 read with section 144B of the Act, the consequent notices for demand, the notice for penalty u/s 271 (1) (c) of the Act, the penalty orders u/s 271 (1) (c) of the Act and consequent demand notices for penalty, for both the assessment years. 4. The brief fact of the case is that the petitioner is a Co-operative Society registered under the Co-operative Societies Act. The case of the petitioner is that he has maintained proper books of accounts in accordance with Section 44 AA of the Act and has got the same audited by his Chartered Accountant. The petitioner had filed the audit report for the relevant assessment years along with accompanying profit and loss account and balance sheet and also filed return of income which discloses receipt of interest from providing credit facilities to its members and also interest on fixed deposit. The petitioner has also claimed deduction under section 80P of the Act. The return filed by the petitioner-organization was selected for scrutiny under Section 143 (2) of the Act and pursuant thereto, the petitioner has submitted the entire documents and detailed di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is seeking to disallow two deductions which were allowed in the original assessment proceedings and hence, there is no reason to believe for any income escaping assessment and hence the very assumption of jurisdiction for re-assessment is wholly illegal and bad in law. He further submits that the re-assessment is based on mechanical grant of sanction by the superior authority and hence is illegal and without jurisdiction. The assessment which stood merged in the order of Commissioner of Income-tax (Appeals) cannot be re-opened. On merits of re-assessment proceedings, it is the case of the petitioner that in absence of stipulation for obtaining a statutory audit under the Jharkhand Co-operative Societies Act in section 80-P of the Act, the Revenue cannot disallow a statutory claim of deduction under section 80-P of the Act, more so, in view of allowance of similar deduction in preceding and succeeding assessment years to the Petitioner-Assessee. 6. Learned counsel further submits on the penalty proceedings u/s 271 (1) (c) of the Act that penalty cannot be imposed solely on the basis of findings in the assessment order without considering the issue of imposition of penalty afresh i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire amount of profits and gains of business that are attributable to any one or more activities mentioned in subsection (2) of Section 80P must be given by way of deduction vide Citizen Co-operative Society. This is because sub-section (4) of Section 80P is in the nature of a proviso to the main provision contained in sub-sections (1) and (2) of Section 80P. The proviso excludes co-operative banks, which are co-operative societies which must possess a licence from the Reserve Bank of India to do banking business. In other words, if an entity does not require a licence to do banking business within the definition of banking under Section 5 (b) of the BR Act, 1949, then it would not fall within the scope of sub-section (4) of Section 80P. 38. While analysing Section 80P of the Act in depth, the following points were noted by this Court: i) Firstly, the marginal note to Section 80P which reads "Deduction in respect of income of co-operative societies" is significant as it indicates the general "drift" of the provision. ii) Secondly, for purposes of eligibility for deduction, the assessee must be a "co-operative society". iii) Thirdly, the gross total income must include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal under the Act, nor has the petitioner in the entire writ petition even whispered any reason either for not availing the appellate remedy, or, as to why the appellate remedy available to the Petitioner under the Act is not an efficacious remedy. It has been further submitted that the Petitioner has invoked the writ jurisdiction of this Court only after expiry of the period of limitation for filing appeal as prescribed under the Act. 10. It has been submitted by Mr. Vaibhav that the initiation of reassessment proceedings is in accordance with law and is not hit by the limitation of 4 years as prescribed in the first proviso to section 147 (un-amended) of the Act as the facts in this case clearly demonstrate that there was failure on part of the petitioner to disclose fully and truly all material facts necessary for his assessment. Original Assessment Order itself records (at para 3.3) that the Assessee did not produce any books of accounts or supporting evidence to justify amounts paid to contractor; further Form 3CA filed by Assessee was issued by the same CA who issued Form 3CD in utter disregard to the provisions of the Jharkhand Co-operative Societies Act read with sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch factual aspects being whether at all there was delay in statutory audit by the State Government or whether at all the State Government failed to appoint auditors under the Jharkhand Co-operative Societies Act for the A.Y. 2013-14 and A.Y. 2014-15, or whether petitioner at all requested the State Government for statutory audit under the Jharkhand Co-operative Societies Act; whether petitioner prepared statement of accounts, etc. and submitted to the Registrar under Rule 58 of the Jharkhand Co-operative Societies Rules, 1959. All these facts were never brought on record by the petitioner in course of the re-assessment proceedings. The aforesaid factual aspects do not make this matter fall within any of the exceptions which would justify the Petitioner in invoking the extra-ordinary writ jurisdiction of this Court having not availed the alternative appellate remedy as provided for under the Act. In this regard it would be profitable to refer following judgments: - (i) In the case of CIT v. Chhabil Dass Agrawal reported in (2014) 1 SCC 603, the Hon'ble Apex Court in paragraphs 16 & 17 has held as under:- "16. In the instant case, the Act provides complete machinery for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court to issue directions, orders or writs in exercise of its jurisdiction under Article 226 of the Constitution of India, the same is no more res integra. Even though the High Court can entertain a writ petition against any order or direction passed/action taken by the State under Article 226 of the Constitution, it ought not to do so as a matter of course when the aggrieved person could have availed of an effective alternative remedy in the manner prescribed by law...... 15. We may usefully refer to the exposition of this Court in Titaghur Paper Mills Co. Ltd. & Anr. Vs. State of Orissa & Ors., wherein it is observed that where a right or liability is created by a statute, which gives a special remedy for enforcing it, the remedy provided by that statute must only be availed of.... .................................................................... 19 In a given case, the assessee may approach the High Court before the statutory period of appeal expires to challenge the assessment order by way of writ petition on the ground that the same is without jurisdiction or passed in excess of jurisdiction-by overstepping or crossing the limits of jurisdiction including in flagra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2018) 6 SCC 603, has held in paragraph 18 as under:- "18. Before interfering with the proposed re-opening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed reassessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial intervention on an assumed change of opinion even in cases where the order of assessment does not address itself to a 10 given aspect sought to be examined in the re-assessment proceedings..." 14. Further, the contention of the petitioner on the doctrine of merger is also misconceived, inasmuch as, the original assessment proceedings which was assailed before the CIT(A) was not on the aspect whether the deduction u/s section 80-P claimed by the petitioner was rightf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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