Cooperative Societies eligible for tax deductions per IT Act | Statutory appeal advised for unresolved issues

The court affirmed that Cooperative Societies under the Tamil Nadu Cooperative Societies Act, 1983 are entitled to deductions under Section 80P of the IT Act. The assessment order challenged under Section 143(3) was upheld, with the court referencing established principles from previous cases. The petitioner was advised on the availability of an alternate remedy through a statutory appeal under Section 246A of the IT Act, emphasizing the importance of exhausting such remedies before seeking relief through writ jurisdiction. The judgment concluded by disposing of the writ petition, allowing the petitioner to pursue the statutory appeal for unresolved issues in the assessment order.

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Issues:
1. Entitlement of deductions under Section 80P of IT Act for Cooperative Societies.
2. Assessment order challenge under Section 143(3) of IT Act for Assessment Year 2016-17.
3. Alternate remedy available through appeal under Section 246A of IT Act.

Analysis:
1. The judgment revolves around the entitlement of deductions under Section 80P of the Income Tax Act for Cooperative Societies registered under the Tamil Nadu Cooperative Societies Act, 1983. The petitioner, a Primary Agricultural Cooperative Credit Society, challenged an assessment order dated 28.12.2018 made by the lone official respondent under Section 143(3) of the IT Act. The court referenced previous cases, including the Tiruchengode Agricultural Producers Cooperative Marketing Society case and the Veerakeralam Primary Agricultural Co-operative Credit Society principle, which established that such Cooperative Societies are indeed entitled to claim deductions under Section 80P of the IT Act.

2. The impugned order in question focused on two main issues: (i) a large deduction under Chapter VI-A from Total Income, and (ii) low income compared to high loans/advances/investment in shares appearing in the balance sheet. The court noted that the first issue was already settled by previous judgments, but the Income Tax Department had taken the matter to the Supreme Court. The petitioner expressed intent to pursue a statutory appeal for aspects of the impugned order not covered by the established principles.

3. The judgment emphasized the availability of an alternate remedy through an appeal under Section 246A of the IT Act. The court highlighted the 30-day time limit for filing such an appeal to the Commissioner (Appeals) and provided for the exclusion of time spent in the writ petition for computing the limitation. The court also discussed the principle of self-imposed restraint regarding alternate remedies in writ jurisdiction, citing cases where the rule was applied rigorously in fiscal law statutes. The judgment concluded by disposing of the writ petition, leaving the petitioner open to avail the statutory appeal as an alternate remedy.

In summary, the judgment clarified the entitlement of Cooperative Societies to deductions under Section 80P of the IT Act, addressed specific issues in the impugned assessment order, and guided the petitioner on the available alternate remedy through a statutory appeal under Section 246A of the IT Act.

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