2022 (4) TMI 115 - HC - Income Tax

High Court modifies orders in Revenue's appeals against co-operative societies, emphasizes liberal interpretation of Section 80P

The Income Tax Officer Ward - 1, Coimbatore Versus K 97 Kinathukadavu Primary Agriculture Co-operative Credit Society Ltd., DR (L) C. 13. Kinathukadavu Co-operative Primary Agriculture & Rural Development Bank Ltd., 9841-Karadivavi Primary Agricultural Co-operative Credit Society Ltd. And Others

The Income Tax Officer Ward - 1, Coimbatore Versus K 97 Kinathukadavu Primary Agriculture Co-operative Credit Society Ltd., DR (L) C. 13. Kinathukadavu ... Issues:Validity of common order passed by the learned Judge in the writ petitions filed by the co-operative societies questioning the orders of assessment and demanding payment of tax.Analysis:The High Court of Madras heard writ appeals filed by the Revenue challenging the validity of a common order passed by the learned Judge in the writ petitions filed by co-operative societies questioning assessment orders and tax demands. The lead case involved an Agricultural Cooperative Credit Society registered under the Tamil Nadu Cooperative Societies Act, 1983, which filed a return of income for the assessment year 2016-2017 claiming deduction under Section 80-P of the Income-tax Act. The assessment completed under Section 143(3) of the Act demanded tax while disallowing the claim under Section 80P. The learned Judge disposed of the writ petition after finding the issue covered by a previous judgment of the Division Bench of the Court, which held that the exemption under Section 80P(4) of the Act applies to credit societies. However, an appeal against this judgment was pending before the Supreme Court, prompting the learned Judge to direct a stay on the assessment orders pending the outcome of the Supreme Court appeal.The Revenue challenged the learned Judge's decision to entertain the writ petitions alongside statutory appeals filed before the CIT (Appeals) simultaneously. The Revenue cited a previous judgment of the Division Bench upholding the applicability of Section 80P to cooperative credit societies. The Supreme Court had permitted the Revenue to withdraw an appeal while leaving the question of law open for consideration. The co-operative societies had also filed statutory appeals pending before the Appellate Authority. The respondents argued that the Supreme Court's decision in a related case emphasized a liberal and reasonable interpretation of Section 80P to benefit the cooperative sector, urging the Appellate Authority to consider this decision while disposing of their appeals.The High Court directed the respondents to raise all contentions, including eligibility under Section 80P, before the Appellate Authority, which was instructed to consider the claims of the co-operative societies in light of the Supreme Court's decision. The impugned orders were modified accordingly, and all writ appeals were disposed of with no costs, leading to the closure of connected miscellaneous petitions.