The Primary Agricultural Cooperative Society V. The Union of India and Others

WP/8322/2024

AI Insights

The case involves multiple writ petitions filed by the Primary Agricultural Cooperative Societies (PACS) challenging the rejection of their applications seeking to condone the delay in filing income tax returns for the assessment year 2021-2022 under Section 119(2)(b) of the Income Tax Act, 1961. The petitions were heard in the context of the disruptions caused by the COVID-19 pandemic, which affected normal life and legal proceedings. The High Court noted that the competent authority had followed a circular extending deadlines but failed to consider a subsequent Supreme Court order that provided further extensions due to the pandemic. The court found that the competent authority's reliance on the circular was misplaced, given the binding nature of the Supreme Court's directions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 802475 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 19-08-2024
• Assessment Year: misc
• Other Referred Cases: Suo Motu Writ Petition (C) No.3 of 2020
• Laws Referred To: Income Tax Act, 1961, National Disaster Management Act
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: Y V KUMAR; VIJAY PUNNA
• Assessee Lawyers: P RAMA SHARMA
• Keywords: Assessment Year; Condone delay; Covid-19 impact; Filing Returns; Judicial precedent
• Section: 80P; 119(2)(b)

Judgement Text

"APHC010154332024 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3487] MONDAY ,THE NINETEENTH DAY OF AUGUST TWO THOUSAND AND TWENTY FOUR PRESENT THE HONOURABLE SRI JUSTICE G.NARENDAR THE HONOURABLE SMT JUSTICE KIRANMAYEE MANDAVA WRIT PETITION NOs: 8011, 8012, 8017, 8018, 8023, 8024, 8031, 8032, 8043, 8044, 8056, 8278, 8310, 8313, 8316, 8318, 8320 & 8322/2024 Between: The Primary Agricultural Cooperative Society ...PETITIONER AND The Union of India and Others ...RESPONDENT(S) Counsel for the Petitioner: 1.P RAMA SHARANA SHARMA Counsel for the Respondent(S): 1.VIJAY KUMAR PUNNA 2.Y V ANIL KUMAR (Central Government Counsel) The Court made the followingcommon order: G.NARENDAR, J: Heard learned counsel, Sri Kedarnath, representing on behalf of learned counsel Sri P.Rama Sharana Sharma, representing the learned counsel for appellants, Sri Y.V.Anil 2 Kumar, learned Central Government Counsel, representing for the 1st respondent and Sri Vijay Kumar Punna, learned Central Government standing counsel representing for the 2nd respondent. 2. The short point that arises in all the petitions is that whether the authority was right in rejecting the applications preferred under Section 119(2)(b) of the Act seeking to condone the delay in filing the returns for the assessment year 2021-2022. We have perused the order passed by the competent authority on the applications. The applications by the assesse were preferred invoking the provisions of clause (b) of sub-section 2 of section 119 of the Income Tax Act, 1961, praying to condone the delay in the filing of returns for the assessment year 2021-2022 and thereby, enabling them to claim deduction under Section 80P of the Act. 3. The status of petitioners’ society is not disputed. The petitioners’ society are allPrimarily Agricultural Cooperative Societies(PACS) registered under the Cooperative Societies Act and are engaged in the business of extending financial assistance (loans) to its members. The fact that the society is 3 part of the credit cooperative structure and extends financial assistance only to its members is a fact that can be prima facie inferred from the pleadings. 4. The case of the petitioners is that during the period from around January, 2020 and there onwards, the presence of corona virus came to be detected in the country and a notification came to be issued in March, 2020 by the competent authority under National Disaster Management Act whereby the rampaging corona virus was declared as a calamity and orders came to be issued, drastically regulating daily life of the citizens whereby citizens were even prohibited from venturing out doors. It is also not in dispute that the prohibition continued to be in operation till the end of the year 2020 and 2021 also and it is common knowledge that the virus startedwithering in the fourth quarter of 2021. 5. The fact that normal life was completely disrupted and thrown out of gear needs no reiteration. In fact, that said aspect of the matter came to be taken up by the Hon’ble Apex Court in Suo Motu Writ Petition (C) No.3 of 2020. The Hon’ble Apex Court acknowledging the circumstances and the statutory requirement, 4 severely curtailing moment of men and material and also severe curtailmentof modes of transportation more especially public transports and addressing the unique situation of limitation, was pleased to issue orders/directions whereby the limitations under the various Acts, Statutes, Rules etc., came to be extended from time to time and the last such order came to be passed on 10.01.2022, which reads as under: “1. In March, 2020, this Court took Suo Motu cognizance of the difficulties that might be faced by the litigants in filing petitions/applications/suits/ appeals/ all other quasi proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central and/or State) due to the outbreak of the COVID-19 pandemic. 2. On 23.03.2020, this Court directed extension of the period of limitation in all proceedings before Courts/Tribunals including this Court w.e.f.15.03.2020 till further orders. On 08.03.2021, the order dated 23.03.2020 was brought to an end, permitting the relaxation of period of limitation between 15.03.2020 and 14.03.2021. While doing so, it was made clear that the period of limitation would start from 15.03.2021. 3. Thereafter, due to a second surge in COVID-19 cases, the Supreme Court Advocates on Record Association 5 (SCAORA) intervened in the Suo Motu proceedings by filing Miscellaneous Application No. 665 of 2021 seeking restoration of the order dated 23.03.2020 relaxing limitation. The aforesaid Miscellaneous Application No.665 of 2021 was disposed of by this Court vide Order dated 23.09.2021, wherein this Court extended the period of limitation in all proceedings before the Courts/Tribunals including this Court w.e.f. 15.03.2020 till 02.10.2021. 4. The present Miscellaneous Application has been filed by the Supreme Court Advocates-on-Record Association in the context of the spread of the new variant of the COVID- 19 and the drastic surge in the number of COVID cases across the country.Considering the prevailing conditions, the applicants are seekingthe following: i. allow the present application by restoring the order dated 23.03.2020 passed by this Hon'ble Court in Suo Motu Writ Petition (C) NO. 3 of 2020; and ii. allow the present application by restoring the order dated 27.04.2021 passed by this Hon'ble Court in M.A. no. 665 of 2021 in Suo Motu Writ Petition (C) NO. 3 of 2020; and iii. pass such other order or orders as this Hon'ble Court may deem fit and proper. 5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the 6 prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi- judicial proceedings. II.Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022. III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply. IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 7 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.” 6. On a reading of Paras 5(I), it is apparent that the earlier orders came to be restored and further directed that the period between 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws. In para 5(III), the limitation that stood expired between the period 15.03.2020 to 28.02.2022 was extended by a period of 90 days commencing from 01.03.2022. Thus, it can be safely inferred that the Hon’ble Apex Court taking suomotu cognizance of the effect and impact of the covid-19 has extended the limitations for a period of 90 days effective from 01.03.2022. Apparently, the applications have been preferred much prior to the cut-off date as recognized under the above order. 7. We have perused the order impugned i.e., order dated 21.02.2024. On a reading of Para 6, it is apparent that the competent authority has been pleased to look into the board circular No.17/2021 issued on 09.09.2021 and has passed the 8 order impugned. Apparently, the Circular No.17/2021, dated 09.09.2021, has extended the time limit till 15th of March, 2022. On the said premise and following the circular, the competent authority has rightly passed the order rejecting the application. Though the competent authority cannot be faulted for having followed the circular, yet, in our considered opinion, the competent authority ought to have also looked into the order of the Apex Court dated 10.01.2022 rendered in Miscellaneous Application No.21 of 2022 in Miscellaneous Application No.665 of 2021 in Suo Motu Writ Petition (C) No.3 of 2020. Apparently, the order of the Apex Court has been passed after the issuance of the Circular No.17/2021 on 09.09.2021. 8. In that view, we are of the considered opinion that the orders impugned warrant interference and ought to be set aside and matters be remitted back to the competent authority to reconsider the applications in the light of the directions issued by the Hon’ble Apex Court while considering and disposing of M.A. No.21 of 2022 in M.A. No.665 of 2021 in Suo Motu Writ Petition (C) No.3 of 2020, dated 10.01.2022. It is needless to say that the directions of the Hon’ble Apex Court are a binding precedent and constitutes the law of the land. 9 9. Learned standing counsel for the respondent has made an attempt to convince us otherwise. In this regard, he has placed reliance on the orders passed by the Division Benches of Delhi, Kerala, Gujarath and Bombay. The orders of the Delhi High Court and Kerala High Court are respectively dated 12.03.2018 and 14.03.2023. Be that as it may, the assessment orders involved therein relate to 2006-07 and 2009-10 and2010-11 respectively. We are of the opinion that the said rulings do not relate to the covid period and hence, are of no assistance to the revenue. Insofar as the rulings of the High Court of Bombay and the High Court of Gujarat, we have noted that both the judgments have been rendered much prior to the orders passed by the Hon’ble Apex Court. The Bombay High Court has disposed of the matter on 15.01.2021 and did not have the benefit of the circular dated 09.09.2021 or the directions issued by the Hon’ble Apex Court in M.A. No.21 of 2022 in M.A. No.665 of 2021 in Suo Motu Writ Petition (C) No.3 of 2020, dated 10.01.2022. The judgment of the Gujarath High Court is dated 13.01.2021. Yet again as noted supra, the Hon’ble High Court did not have the benefit of either the circular dated 09.09.2021 or the directions of the Hon’ble Apex Court dated 10.01.2022. Be that as it may, it is 10 also of interest to note the direction of the Division Bench to take lenient view with regard to the consequences of late filing of tax audit reports. The direction-cum- recommendation in Para 51 reads as under: “51. In the result, both the writ applications fail and are hereby rejected. At this stage, we may only observe that the CBDT may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the Tax Audit Reports as provided under section 271B of the Act. We leave it to the better discretion of the CBDT in this regard.” 10. Thus, it is worthy to note that the Division Bench was alive to the situations that may arise and hence, it cannot be stated that the Court was completely oblivious to the sufferings of the common man. Be that as it may, the fact remains that both the judgments rendered by the High Court of Gujarath and High Court of Bombay, were passed almost a year prior to the direction of the Hon’ble Apex Court dated 10.01.2022. Hence, the objections in our opinion do not bear its consideration. 11. In that view, these writ petitions are allowed in part and that the impugned orders dated 21.02.2024 are set aside and remitted back to the authority for reconsideration of the applications 11 preferred under Section 119(2)(b) of the Income Tax Act, 1961, in the light of the directions issued by the Hon’ble Apex Court in M.A. No.21 of 2022 in M.A. No.665 of 2021 in Suo Motu Writ Petition (C) No.3 of 2020, dated 10.01.2022. No costs. As a sequel, interlocutory applications pending, if any, in this case shall stand closed. _______________ G.NARENDAR, J __________________________________ KIRANMAYEE MANDAVA, J Date: 19.08.2024 SS "