SHRI. SHANKARLING V. THE INCOME TAX OFFICER

WP/144171/2020

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The case involves Shankarling Co-operative Credit Souharda Sahakari, a society initially registered under the Karnataka Co-operative Societies Act, 1959, and later under the Karnataka Souharda Sahakari Act, 1997. The society contested an assessment order denying them exemption under Section 80(P)(2)(a)(i) of the Income Tax Act, 1961, claiming that the term 'co-operative' in Section 2(19) of the Income Tax Act should include societies registered under the Karnataka Souharda Sahakari Act. The High Court of Karnataka, referencing a previous decision, ruled in favor of the petitioner, acknowledging their entitlement to the benefits under Section 80(P) of the Income Tax Act.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 754557 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 25-03-2021
• Assessment Year: misc
• Other Referred Cases: W.P.No.48414/2018
• Laws Referred To: Income Tax Act, 1961, Karnataka Souharda Sahakari Act, 1997, Karnataka Co-operative Societies Act, 1959
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: H R KAMBIYAVAR; PATRI K
• Keywords: Assessment Order; Co-operative Society; Income tax exemption; Writ of Certiorari
• Section: 2(19); 2(e); 80-P(2)(a)(i)

Judgement Text

"IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 25TH DAY OF MARCH 2021 BEFORE THE HON’BLE MR. JUSTICE SACHIN SHANKAR MAGADUM W.P.NO.144171/2020 (T-IT) BETWEEN SHRI. SHANKARLING CO-OPERATIVE CREDIT SOUHARDA SAHAKARI, NIYAMIT, SANKESHWAR, SUBHAS ROAD, SANKESHWAR, DIST. BEALGAVI, REP. BY ITS CEO, SHRI RAMU, S/O. APPA KAPASE, AGED 78 YEARS. ... PETITIONER (BY SRI.H.R.KAMBIYAVAR, ADV. AND SMT.PATRI SHASHIKALA K.) AND 1 . THE INCOME TAX OFFICER WARD 1 (3), KIMJI BAI BUILDING, OPP. CIVIL HOSPITAL, BELAGAVI-590001 2 . O/O COMMISSIONER OF INCOME TAX (APPEALS), HUBBALLI, CENTRAL REVENUE BUILDING, NAVANAGAR, HUBBALLI-580025 3 . THE COMMISSIONER OF INCOME TAX (ADMINISTRATION), KIMJI BAI BUILDING, OPP. CIVIL HOSPITAL, BELAGAVI-590001 ... RESPONDENTS (BY SRI.Y.V.RAVIRAJ, ADV.) THIS PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO A) TO DECLARE THAT THE WORD \"CO-OPERATIVE\" IN SECTION 2(19) OF THE I.T.ACT APPLIES TO ALL IDENTITIES REGISTERED UNDER THE STATE LAW INCLUDING A CO-OPERATIVE AS DEFINED UNDER SECTION 2(e) OF THE 2 KARNATGAKA SOUHARDA SAHAKARI ACT, 1997 BY HARMONIOUS CONSTRUCTION OF BOTH THE ENACTMENTS. B) CONSEQUENTLY ISSUE A WRIT OF CERTIORARI TO QUASH THE IMPUGNED ORDER BEARING NO.PAN:AADAS3568D ITA NO.CIT(A)HUBLI/10118/2017-18 DATED 02.12.2019 VIDE ANNEXURE-C WAS PASSED BY THE 2ND RESPONDENT. THIS PETITION COMING ON FOR PRELIMINARY HEARING ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner-society was initially registered under the Karnataka Co-operative Societies Act, 1959. Later the petitioner-society resolved to get the society registered under the provisions of under the Karnataka Souharda Sahakari Act, 1997 and the same was registered on 22.09.2001. The society submitted its returns on 28.09.2012 declaring gross total income to the tune of Rs.36,87,999/-. After claiming deduction of Rs.36,87,999/- under Section 80(P)(2)(a)(i) of Income Tax, Act, 1961 (hereinafter referred to as ‘I.T.Act’ for short). 2. Respondent No.1 passed an order of assessment by holding that petitioner-society is not entitled for exemption under Section 80(P)(2)(a)(i) of the I.T.Act. This 3 order was questioned by the petitioner-society herein before respondent No.2/appellate authority who by the impugned order as per Annexure-C has confirmed the order passed by the assessing authority. 3. The instant writ petition is filed by the society questioning the order passed by the appellate authority as per Annexure-C confirming the order of the assessing authority. The petitioner-society also sought writ to declare the word ‘co-operative’ incorporated in Section 2(19) of the I.T.Act to be extended to all the registered societies as defined under Section 2(e) of the Karnataka Souharda Sahakari Act, 1997. 4. Heard the learned counsel for the petitioner and learned counsel for the respondents. 5. It is stated across the bar that insofar as controversy relating to entities registered under the Karnataka Souharda Sahakari Act, 1997 is concerned, the same is no more res integra. This court in 4 W.P.No.48414/2018 and connected matter disposed off on 16.01.2020 has allowed the writ petitions by issuing declaration to the effect that, entities registered under the Karnataka Souharda Sahakari Act, 1997 would fit into the definition of “co-operative society” as enacted in Section 2(19) of the I.T.Act. Therefore, subject to all just exceptions, petitioner is entitled to stake his claim for the benefit of Section 80(P) of the I.T.Act. In the light of the ratio laid down by the Co-ordinate Bench of this court, I am of the view that the petitioner is also entitled to the relief in the present writ petition. 6. However, the assessment order passed by assessing authority does not confine to the benefit under Section 80(P) and there are other components wherein the assessing authority has dealt with and has passed an order. In the instant writ petition, this court would confine only to that portion of the order which squarely fall under Section 80(P) of the I.T.Act. The other claims do not fall 5 within the domain of writ jurisdiction and thereby the petitioner is at liberty to seek redressal of his claim in respect of remaining components where assessing authority has passed an order raising demand pursuant to the assessment order. 7. Insofar as remaining claims are concerned, the same cannot be examined by this court under Articles 226 and 227 of the Constitution of India. The remaining claim has been dealt by the appellate authority and the same is partly allowed. If the petitioner has any grievance in respect of claims other than claim under Section 80(P) of the I.T.Act, it is always open for the petitioner to seek redressal of his grievance before appropriate forum. 8. Since in the instant writ petition, the petitioner has questioned the order passed by the assessing authority as well as appellate authority, I deem it fit to extend the benefit under Section 14 of the Limitation Act to the petitioner, since he was bonafidely questioning the entire 6 order. In that view of the matter, opportunity is reserved to the petitioner to seek redressal insofar as other claims are concerned. In the event, such an appeal is filed, the authorities shall consider question of limitation under Section 14 of the Limitation Act. 9. Insofar as claim benefit under Section 80(P) of the I.T.Act is concerned, it is subject to the verification by the assessing authority. 10. Learned counsel for the respondents would submit to this court that, insofar as the declaration laid down by this court in the batch of writ petitions cited supra, he would bring to the notice of this court that respondents have already challenged the said order and the same is pending consideration before the Division Bench of this court. The said submission is taken on record. Even if the said submission is taken on record, but however, that would not come in the way of this court in granting similar relief to the present petitioner who is on 7 the same footing and thereby he is also entitled to have the benefit of the order passed by this court in the afore- cited writ petitions. With these observations, I proceed to pass the following: ORDER The writ petition is partly allowed by holding that petitioner is entitled for exemption under Section 80(P) of the I.T.Act. However, it is open for the assessing authority to verify the claim under Section 80(P)(2)(a)(i) I.T.Act. Insofar as other claims are concerned, liberty is reserved to the petitioner to seek appropriate relief before the competent forum. In the event, the petitioner opts to challenge other claims before competent forum, he is entitled benefit under 8 Section 14 of the Limitation Act and the same shall be considered by the authority in accordance with law. Sd/- JUDGE MBS/- "