BALKURU HALU UTHPADAKARA V. PRL COMMISIONER OF INCOME TAX

WP/28871/2019

AI Insights

The case involves multiple writ petitions filed by various cooperative societies and associations against the orders of the Income Tax authorities, which denied them deductions under Section 80P of the Income Tax Act, 1961, due to delays in filing their income tax returns for the assessment year 2018-19. The petitioners, primarily agricultural and milk business cooperatives, argued that the delays were due to their inexperience and lack of awareness as newly registered entities. The court considered precedents and the genuine hardships faced by the petitioners, leading to the decision to remand the cases for a fresh assessment of their claims.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 763199 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 19-09-2019
• Assessment Year: misc
• Other Referred Cases: Fibrefill Engineers Vs. CIT, Sharavathy Conductors (P.) Ltd. Vs. Chief Commissioner of Income Tax, Bengaluru-2
• Laws Referred To: Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JEEVAN NEERALGI; E I SANMATHI
• Assessee Lawyers: MAHESH UPPIN
• Keywords: Assessment year 2018-19; Condonation of delay; Deduction under section 80P; Income Tax; Writ petition
• Section: 80P; 139(4); 80AC; 226; 227; 143(v)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF SEPTEMBER, 2019 BEFORE THE HON’BLE MR. JUSTICE P.B. BAJANTHRI WRIT PETITION No.28871/2019 (T-IT) C/W WRIT PETITION Nos.28872/2019, 29109/2019, 29110/2019, 28873/2019, 29580/2019, 29583/2019, 29582/2019, 29584/2019 IN WRIT PETITION NO.28871/2019 BETWEEN: Balkuru Halu Uthpadakara Sahakari Sangha Ltd., Balkuru Village, Kundapura Taluk, Udupi District – 576 211. Represented by its C.E.O., Mr.Yogesh. …Petitioner (By Sri. Mahesh R Uppin, Advocate) AND: 1. Prl. Commissioner of Income Tax, Aayakar Bhavan, C.R. Building, N.G. Road, Attavara,Mangaluru – 575 001. 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 2 3. Income Tax Officer, Ward – 2, Aayakar Bhavan, Adi – Udupi Malpe Road, Udupi – 576 103. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 10.05.2019 passed by the R-2 marked as Annexure – “B” and the order dated 17.06.2019 passed by the R-1 marked as Annexure – “C” by issuing a writ in the nature of certiorari. IN WRIT PETITION NO.28872/2019 BETWEEN: Keradi Milk Producers’ Women’s Co-operative Society Ltd., Keradi Village, Kundapura Taluk, Udupi District – 576 233. Represented by its Secretary, Smt. Roopa Shedthi. …Petitioner (By Sri. Mahesh R Uppin, Advocate) AND: 1. Prl. Commissioner of Income Tax, Aayakar Bhavan, C.R. Building, N.G. Road, Attavara, Mangaluru – 575 001. 3 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 3. Income Tax Officer, Ward – 2, Aayakar Bhavan, Adi – Udupi Malpe Road, Udupi – 576 103. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 31.05.2019 passed by the R-2 marked as Annexure – “B” and the order dated 17.06.2019 passed by the R-1 marked as Annexure – “C” by issuing a writ in the nature of certiorary. IN WRIT PETITION NO.29109/2019 BETWEEN: Bidkalkatte Milk Producers’ Co-operative Society Ltd., Bidkalkatte, Kundapura Taluk, Udupi District – 576 222. (Represented by its Secretary - Mr. Ganesha). …Petitioner (By Sri. Mahesh R Uppin, Advocate) AND: 1. Prl. Commissioner of Income Tax, Aayakar Bhavan, 4 C.R. Building, N.G. Road, Attavara,Mangaluru – 575 001. 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 3. Income Tax Officer, Ward – 2, Aayakar Bhavan, Adi – Udupi Malpe Road, Udupi – 576 103. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 31.05.2019 passed by the R-2 marked as Annexure – “B” and the order dated 21.06.2019 passed by the R-1 marked as Annexure – “C”. IN WRIT PETITION NO.29110/2019 BETWEEN: Navanidhi Vividhoddesha Sahakara Sangha Ltd., Ujjodi, Gorigudde, Mangaluru, D.K. District – 575 002. Represented by its C.E.O. Mrs. Prathibha. ..Petitioner (By Sri. Mahesh R Uppin, Advocate) AND: 1. Prl. Commissioner of Income Tax, Aayakar Bhavan, 5 C.R. Building, N.G. Road, Attavara, Mangaluru – 575 001. 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 3. Income Tax Officer, Ward – 2(3), Aayakar Bhavan, Attavara, Mangaluru – 575 001. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 10.05.2019 passed by the R-2 marked as Annexure – “B” and the order dated 25.06.2019 passed by the R-1 marked as Annexure – “C”. IN WRIT PETITION NO.28873/2019 BETWEEN: Thombathu Milk Producers’ Co-operative Society Ltd., Thombathu, Hengavalli Village, Kundapura Taluk, Udupi District – 576 212. (Represented by its Secretary - Sri.Raju Poojary). …Petitioner (By Sri. Mahesh R Uppin, Advocate) AND: 1. Prl. Commissioner of Income Tax, 6 Aayakar Bhavan, C.R. Building, N.G. Road, Attavara, Mangaluru – 575 001. 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 3. Income Tax Officer, Ward – 2, Aayakar Bhavan, Adi – Udupi Malpe Road, Udupi – 576 103. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 31.05.2019 passed by the R-2 marked as Annexure – “B”. IN WRIT PETITION NO.29580/2019 BETWEEN: K.M.Credit Souharda Sahakari Ltd., K.M.Complex, Main Road, Koteshwara, Kundapura Taluk, Udupi District – 576 222. (Represented by its C.E.O. - Mr. Sudarshana). …Petitioner (By Sri. Mahesh R Uppin, Advocate) AND: 1. Prl. Commissioner of Income Tax, 7 Aayakar Bhavan, C.R. Building, N.G. Road, Attavara,Mangaluru – 575 001. 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 3. Income Tax Officer, Ward – 2, Aayakar Bhavan, Adi – Udupi Malpe Road, Udupi – 576 103. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 10.05.2019 passed by the R-2 marked as Annexure – “B” and the order dated 21.06.2019 passed by the R-1 marked as Annexure – “C”. IN WRIT PETITION NO.29583/2019 BETWEEN: Sasthavu Halu Uthpadakara Mahila Sahakara Sangha Ltd., Sasthavu, Pejamangoor Village, Kokkare Post, Brahmavara Taluk, Udupi District – 576 2. Represented by its Secretary – Mrs.Babi. …Petitioner (By Sri. Mahesh R Uppin, Advocate) 8 AND: 1. Prl. Commissioner of Income Tax, Aayakar Bhavan, C.R. Building, N.G. Road, Attavara, Mangaluru – 575 001. 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 3. Income Tax Officer, Ward – 2, Aayakar Bhavan, Adi – Udupi Malpe Road, Udupi – 576 103. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 12.02.2019 passed by the R-2 marked as Annexure – “B” and the order dated 21.06.2019 passed by the R-1 marked as Annexure – “C”. IN WRIT PETITION NO.29582/2019 BETWEEN: Shree Guru Nithyananda Souharda Credit Co-Operative Ltd., Navunda, Byndoor, Byndoor Taluk,Udupi District – 576 224. (Represented by its C.E.O.– Mrs.Pooja T Poojary). …Petitioner (By Sri. Mahesh R Uppin, Advocate) 9 AND: 1. Prl. Commissioner of Income Tax, Aayakar Bhavan, C.R. Building, N.G. Road, Attavara, Mangaluru – 575 001. 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 3. Income Tax Officer, Ward – 2, Aayakar Bhavan, Adi – Udupi Malpe Road, Udupi – 576 103. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 31.05.2019 passed by the R-2 marked as Annexure – “B” and the order dated 17.06.2019 passed by the R-1 marked as Annexure – “C”. IN WRIT PETITION NO.29584/2019 BETWEEN: Padumundu Milk Producers Women Co-operative Society Ltd., Shiriyara Village, Saibrakatte Post, Brahmavara Taluk, Udupi District – 576 210. (Represented by its Secretary – Mrs.Chaitra) … Petitioner (By Sri. Mahesh R Uppin, Advocate) 10 AND: 1. Prl. Commissioner of Income Tax, Aayakar Bhavan, C.R. Building, N.G. Road, Attavara, Mangaluru – 575 001. 2. Dy. Commissioner of Income Tax, Centralized Processing Centre, Bengaluru – 560 500. 3. Income Tax Officer, Ward – 2, Aayakar Bhavan, Adi – Udupi Malpe Road, Udupi – 576 103. ... Respondents (By Sri. Jeevan R Neeralgi, Advocate a/w Sri. E.I.Sanmathi, Advocate) This Writ Petition is filed under Articles 226 and 227 of the Constitution of India praying to quash the order dated 25.06.2019 passed by the R-2 marked as Annexure – “B”. These Writ Petitions coming on for Preliminary Hearing in ‘B’ group, this day, the Court made the following: COMMON ORDER In the instant petitions, petitioners are seeking a writ in the nature of certiorari by quashing the respective impugned orders and a writ in the nature of mandamus 11 by directing respondent No.3 for fresh assessment of their income tax return filed for the Assessment year 2018-19 in accordance with law. 2. The gist of the matters are as under: Case No. Reason for condonation of delay WP No.28871/19 Balkuru Halu Utpadakara Sahakara Sangha Annexure “A” condonation of delay application. Delay is 134 days in filing Return. Newly Registered Society. First year of filing of Return. Unaware of provisions of the Income Tax Act. WP 28872/2019 Keradi Milk Producers Women’s Co-Operative Society Annexure “A” condonation of delay application. Delay is 58 days in filing Return. Newly Registered Society. First year of filing of Return. Mistake in the PAN Number. The same was rectified in the Month of December 2018 and immediately Return was filed. WP No.29109/2018 Bidalkatte Milk Producers Co-Operative Society Annexure “A” condonation of delay application. Delay is 58 days in filing Return. It is a small Society. Situated in a remote village. Secretary was attending BMTC Training Programme for Milk Societies secretaries from 13-10-2018 to 27-10-2018. 12 WP No.29110/2018 Navanidhi Vividhoddesha Sahakare Sangha Ltd Annexure “A” condonation of delay application. Delay is 147 days in filing Return. Not aware of compulsory filing of Income Tax Return. Hence there is a delay in filing the Return. WP No.28873/2018 Thombathu Milk Producers Co-Operative Society Annexure “A” condonation of delay application. Delay is 30 days in filing Return. Situated in a small village. Mistake in the PAN number. Hence there is a delay. WP No. 29580/2019 K.M. Credit Souhardha Sahakari Annexure “A” condonation of delay application. Delay is 79 days in filing Return. Situated in a small village. New Co-Operative Society. Turn over is less than one crore. Not aware of the new provision. WP No.29583/2019 Sasthavu Halu Utpadakara Sahakara Sangha Annexure “A” condonation of delay application. Delay is 63 days in filing Return. Situated in a small village. Turn over is less than one crore. Not aware of the new provision. WP No.29582/2019 Shree Guru Nithyananda Souharda Credit Co- Operative Society Annexure “A” condonation of delay application. Delay is 78 days in filing Return. Situated in a small village. Turn over is less than one crore. Not aware of the new provision. 13 WP No.29584/19 Padumundu Milk Producers Women Co- Operative Society Annexure “A” condonation of delay application. Delay is 143 days in filing Return. No knowledge that if the return is not filed within date not eligible for deduction. 3. Learned counsel for the petitioners submitted that petitioners – assesees had commenced their respective businesses during the financial year 2017-18 (A.Y. 2018-19) and in the first year of filing their respective income tax returns for the Assessment year 2018 -2019, there was delay in filing the returns for which reasons have been assigned to condonation of the delay. However, reasons have not been appreciated by the authority while rejecting the petitioners’ grievance relating to seeking deduction under Section 80 (P) of the Income Tax Act, 1961. 4. Learned counsel for the petitioners further submitted that respondent No.3 has not appreciated the fact that some of the petitioners are Agriculturists, 14 doing Milk business, running Sahakara Sangha and Co- operative societies. They were not aware of filing of returns in time and through the chartered accountant they came to know that there is delay in filing their respective returns. 5. The learned counsel for the petitioners relied on the decision of the Division Bench of the Delhi High Court passed in Fibrefill Engineers Vs. CIT reported in (2017) 177 TTJ 556 (Del.) wherein, it has held the aspect of delay, genuineness and hardship invoking the provisions of Section 80 AC and deduction under Section 80-IC of the Act, could not come in the way of extending the benefit of deduction under Section 80P of the Act. 6. On the other hand, learned counsel for the respondents resisted the contention of learned counsel for the petitioners and relied on the decision of this Court in the case of Sharavathy Conductors (P.) Ltd. 15 Vs. Chief Commissioner of Income Tax, Bengaluru-2 reported in [2017] 87 taxmann.com 244 (Karnataka) at para 5, this Court has taken note of the fact that condonation of delay is rested on the discretionary power of the authority. Thus, petitioner has not made out a case so as to interfere with the impugned order. 7. Heard the learned counsel for the parties. The short question that arise for consideration in the present petitions is, whether the petitioners are entitled for condonation of delay in filing their respective returns before the authority to claim deduction under Section 80P of the Act or not? 8. Undisputed facts are that, petitioners’ Societies which has actively commenced only during the financial year 2017-2018 and the assessment year being 2018-19 and for the first time, they have filed returns under Section 139 (4) of the Act. In view of the delay in filing the return, no doubt Section 80 AC (ii) of the Act is 16 attracted. As there is delay in filing the returns and at the same time as the petitioners are agriculturists, who are also running Milk business, Co-operative Society and Sahakara Sangha, for the first time they have filed returns for the financial year 2017-18, after commencement of their Society in the year 2017-18. Therefore, the authority ought to be liberal in condoning the delay. As per the guidelines of the Division Bench of the Delhi High Court which had invoked various provisions of the Act, regarding the condonation of delay with reference to genuine hardship and that apart, when assessees have come forward to file their respective returns belatedly, taking note of these facts, and their promptness in filing the genuine returns, ought to have considered the same. Having regard to the principles laid down by the Division Bench of the Delhi High Court matters require re-examination relating to provisions relating to Sections 80 P, 80 AC (ii) and 143 (v) of the Act. Accordingly, the impugned 17 orders are set aside and the matters are remanded to respondent No.3 for re-examination of the petitioners claim with regard to the filing of their respective returns for the assessment year 2018-19 and for condonation of delay in the light of the decision of the Division Bench of the Delhi High Court. Further, whether petitioners are entitled for deduction under Section 80P or not shall also be considered. This exercise shall be completed within a period of three months from the date of receipt of the certified copy of this order. In view of the above facts and circumstances, all these petitions stands allowed. Sd/- JUDGE MH/- "