TaxTMI 
TaxTMI 
2019 (7) TMI 1446
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....malatha, learned counsel for writ petitioners in W.P.No.4642, 4981 & 5687 of 2019, Mr.B.Raveendran, learned counsel on record for writ petitioner in W.P.Nos.4467 and 4469 of 2019 and Mr.A.P.Srinivas, learned senior standing counsel (Income Tax) assisted by Mr.A.N.R.Jayapratap, learned junior standing counsel (Income Tax) on behalf of the respondents in all the writ petitions are before this Court. 3.To be noted, respondent has filed counter affidavits in some of the writ petitions and pleadings have been completed. Be that as it may with consent of learned counsel on both sides, main writ petitions are taken up, heard out and is being disposed of. 4. There is no disputation or disagreement before this Court that the writ petitioners are Co-operative Societies and that they are Co-operative Societies which are registered under 'Tamil Nadu Cooperative Societies Act, 1983' (hereinafter 'TNCS Act' for brevity). 5. What has been called in question in these writ petitions by the writ petitioners are Assessment Orders made by the respondent under Section 143(3) of 'Income Tax Act, 1961' ('IT Act' for brevity). The impugned orders shall collectively....
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.... Bank Ltd., case (referred to supra) brings to light that the following principles have been laid down by the Hon'ble Division Bench: a) A Cooperative Society registered under TNCS Act is entitled to the benefits / deductions adumbrated in Section 80P of IT Act; b) As a sequitur to the above principle, writ petitioners herein are entitled to deductions under various heads adumbrated in Section 80P of IT Act. c) Owing to insertion of sub-section (4) in Section 80P of IT Act with effect from 01.04.2017 by Finance Act, 2006, a distinction between a Cooperative Bank and a Primary Agricultural Credit Society or a Primary Cooperative Agricultural and Rural Development Bank operates. In other words, while Section 80P will not apply to a Cooperative bank, the deductions will be available to Primary Agricultural Credit Societies and Primary Cooperative Agricultural and Rural Development Banks. Also to be noted, this principle has been laid down by Hon'ble Division Bench by placing reliance on a judgment of Hon'ble Supreme Court in Citizen Cooperative Society Limited Vs. ACIT (reported in (2017) 84 Taxmann.com 114). 12. Before this Court proceeds fur....
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....ry for its operations (obviously at that point of time) and therefore, interest derived from such investments cannot be classified as operational income. On this basis, interest so derived has been assessed under Section 56 of IT Act by treating the same as 'other sources'. The impugned orders have also drawn inspiration from a judgment of Hon'ble Supreme Court in The Totgars' Cooperative Sale Society Limited Vs. Income Tax Officer, Karnataka reported in (2010) 188 Taxmann 282 (SC) and in the considered view of this Court paragraphs 10 and 11 of Cooperative Sale Society Limited case is of relevance and the same read as follows: '10. At the outset, an important circumstance needs to be highlighted. In the present case, the interest held not eligible for deduction under Section 80P(2)(a)(i) of the Act is not the interest received from the members for providing credit facilities to them. What is sought to be taxed under Section 56 of the Act is the interest income arising on the surplus invested in short-term deposits and securities which surplus was not required for business purposes. Assessee(s) markets the produce of its members whose sale proceeds at t....
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....ction 80P(2)(a)(i) is not in respect of interest received from members. In this case, we are only concerned with interest which accrues on funds not required immediately by the assessee(s) for its business purposes and which have been only invested in specified securities as "investment". Further, as stated above, assessee(s) markets the agricultural produce of its members. It retains the sale proceeds in many cases. It is this "retained amount" which was payable to its members, from whom produce was bought, which was invested in short-term deposits/securities. Such an amount, which was retained by the assessee-Society, was a liability and it was shown in the balance-sheet on the liability-side. Therefore, to that extent, such interest income cannot be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) of the Act or in Section 80P(2)(a)(iii) of the Act. Therefore, looking to the facts and circumstances of this case, we are of the view that the Assessing Officer was right in taxing the interest income, indicated above, under Section 56 of the Act. 11. An alternative submission was advanced by the assessee(s) stating that, if interest i....
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...."Other Income" which has been rightly taxed by the Department under Section 56 of the Act.' 16. In the aforesaid backdrop, it was contended that such income on facts is operational income and that writ petitioners are entitled to deduction under Section 80P (2)(d) of IT Act. This turns heavily on facts. As already alluded to supra, both sides submit that this aspect of the matter is not covered either by Ammapet Primary Agricultural Cooperative Bank Ltd., case or for that matter by any other case and is res integra. Therefore, this Court is of the considered view that this is a fit case to relegate the writ petitioners to the alternate remedy by way of a statutory appeal. This Court is informed that remedy of filing statutory appeal to the Commissioner (Appeals) is available for the writ petitioners under Section 246A of IT Act. This Court is informed that in some of these writ petitions, writ petitioners have already preferred statutory appeals. If that be the case, it is open to the writ petitioners to pursue their appeals and obviously this order can be pressed into service before the Appellate Authority. 17. With regard to exercise of writ jurisdiction on the teeth of....
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....ues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 55.It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.' (Underlining made by Court to supply emphasis and highlight) 18. Therefore, this Court disposes of these writ petitions leaving open all questions including the questions/grounds raised in the instant writ petitions to be canvassed in statutory appeals before Commissioner (Appeals) under Section 246-A. At his juncture, learned counsel for w....