THE NANDI SAHAKARI SAKKARE AND ORS V. UNION OF INDIA AND ORS

WP/207753/2017

AI Insights

The case involves a writ petition filed by The Nandi Sahakari Sakkare Karkhane Niyamit Krishnanagar and others against the Union of India and other respondents, challenging the interpretation of Section 36(1)(XVII) of the Income Tax Act as amended by the Finance Act No. 2015. The petitioners sought a declaration that the section should be read in consonance with CBDT Circular No.19/2015, which permits exemption for sugarcane purchased above the government-fixed price. Alternatively, they argued that the excess price paid for sugarcane should be an allowable deduction under Section 37 of the Income Tax Act. However, during the proceedings, the petitioner's counsel opted to rely on the benefits provided under the more recent Circulars No.18/2021 and No.14/2023, leading to the disposal of the petition.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 724162 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 05-08-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M TIRUMALESH
• Assessee Lawyers: A M NAGRAL
• Keywords: Deduction; Exemption; Finance act; Income Tax; Sugarcane purchase
• Section: 119; 37; 226; 36(1)(xvii); 155; 227

Judgement Text

" - 1 - NC: 2024:KHC-K:5666 WP No. 207753 of 2017 IN THE HIGH COURT OF KARNATAKA, KALABURAGI BENCH DATED THIS THE 5TH DAY OF AUGUST, 2024 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 207753 OF 2017 (T-IT) BETWEEN: 1. THE NANDI SAHAKARI SAKKARE KARKHANE NIYAMIT KRISHNANAGAR, HOSUR POST, VIJAYAPUR TALUK VIJAYAPUR DISTRICT-586113 REP. BY ITS MANAGING DIRECTOR SRI. R.T. DESAI 2. SRI. THIMMAPPA RANGAPPA PACHCHENNAVER. S/O RANGAPPA PACHCHENNAVER, AGED: 65 YEARS R/AT NO.93, SHIRABUR VIJAYAPUR-587117 3. SRI. PANDITAPPA VENKATEPPA AMALAZARI, S/O PANDITAPPA AGED: 67 YEARS R/AT. RABAKAVI GALAGALI, BAGALKOT, BILAGI-587117 4. SRI. HANAMANTHAPPA PANDAPPA SONNAD S/O PANDAPPA AGED: 59 YEARS. R/AT MALLAMMA NAGAR, MUDHOL, BAGALKOT-587313 5. SRI. PANDAPPA BHIMAPPA RAGHA S/O PANDAPPA, Digitally signed by BASALINGAPPA SHIVARAJ DHUTTARGAON Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC-K:5666 WP No. 207753 of 2017 AGED 63 YEARS, R/AT. KOLUR BAGALKOT, BILAGI-587301 6. SRI. GOVINDAPPA APPANNA JAKKARADDI. S/O APPANNA, AGED 69 YEARS R/AT NO.141, BADAGI, BILAGI, BAGALKOT-587116 …PETITIONERS (BY SRI. A. M. NAGRAL, ADVOCATE) AND: 1. UNION OF INDIA MINISTRY OF FINANCE SOUTH BLOCK NEW DELHI-110001 REPRESENTED BY ITS SECRETARY 2. CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, 4TH FLOOR, JEEVAN DEEP BUILDING, PARLIAMENT STREET, NEW DELHI-110001 REPRESENTED BY ITS CHAIRMAN 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN SEDAM ROAD, KALABURAGI-585105 4. INCOME TAX OFFICER WARD-1, KALABURAGI-585 101. …RESPONDENTS (BY SRI. M.TIRUMALESH ADVOCATE) - 3 - NC: 2024:KHC-K:5666 WP No. 207753 of 2017 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO ISSUE A) A WRIT DECLARING THE SECTION 36(1)(XVII) OF THE IT ACT INTRODUCED W.E.F.01.04.2016 BY FINANCE ACT NO.2015 ACT, ON 01.04.2015 HAS TO BE READ DOWN IN CONSONANCE WITH (SUBORDINATE LEGISLATION) CBDT (CENTRAL BOARD OF DIRECT TAXES) CIRCULAR NO.19.2015 DATED-27.11.2015 ISSUED U/S. 119 OF THE IT ACT PRODUCED AS ANNEXURE-B, PERMITTING EXEMPTION OF SUGARCANE PURCHASED ABOVE THE PRICE FIXED BY THE GOVERNMENT(SMP). B) ALTERNATIVELY, ISSUE A WRIT DECLARING THAT THE PURCHASED PRICE OF SUGARCANE BY THE ASSESSEE OVER AND ABOVE THE FIXED BY THE GOVERNMENT IS ALLOWABLE DEDUCTION IN ACCORDANCE WITH SECTION 37 OF THE I.T ACT. IN THE INTEREST OF JUSTICE AND EQUITY TO C) ISSUE A WRIT OR TO PASS SUCH OTHER ORDER AS THIS HON’BLE COURT DEEMS FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ ORAL ORDER (PER: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ) 1. Petitioner is before this Court seeking for the following reliefs: a. A writ declaring the section 36(1)(xvii) of the it act introduced w.e.f.01.04.2016 by finance act no.2015 act, on 01.04.2015 has to be read down in consonance with (subordinate legislation) CBDT (central board of direct taxes) Circular No.19.2015 dated-27.11.2015 issued - 4 - NC: 2024:KHC-K:5666 WP No. 207753 of 2017 u/s. 119 of the it act produced as Annexure-B, permitting exemption of sugarcane purchased above the price fixed by the government(SMP). b. Alternatively, issue a writ declaring that the purchased price of sugarcane by the assessee over and above the fixed by the government is allowable deduction in accordance with section 37 of the I.T.Act. in the interest of justice and equity to c. Issue a writ or to pass such other order as this Hon’ble court deems fit to Grant in the facts and circumstances of the present case. 2. Sri A.M.Nagral, learned counsel for the petitioner, has filed a memo enclosing two documents by referring to Circular No.18/2021, dated the 25.10.2021. He submits that a clarification has been issued in respect of Section 36 of the Income Tax Act, 1961, and in terms of the said clarification as per Circular No.14/2023, dated 27.07.2023 issued under Subsection 19 of Section 155 of the Income Tax Act, 1961, a new procedure has been prescribed to enable the petitioner to avail the benefit of the clarification issued in terms of Circular No.18/2021. In that view of the matter, he submits that he would not press the above petition, but seeks permission to avail - 5 - NC: 2024:KHC-K:5666 WP No. 207753 of 2017 the benefits of Circular No.18/2021 and circular No.14 of 2023. Accepting his submission, the petition is disposed. 3. The petitioner if complying and in compliance of circular No.18/2021 and Circular No.14/2023, would be entitled to the benefits there from. The Assessing Authority is directed to pass necessary orders accordingly. 4. The petition is disposed in terms of the above. Sd/- (SURAJ GOVINDARAJ) JUDGE SVH List No.: 1 Sl No.: 40 "