Case Law Details
Janaseva Urban Cooperative Credit Society Limited Vs ITO (Bombay High Court)
The Bombay High Court granted interim relief to Janaseva Urban Cooperative Credit Society Limited in a dispute regarding disallowance of deduction under Section 80P of the Income Tax Act, 1961, restraining the Income Tax Department from taking coercive recovery measures.
For the Assessment Year (AY) 2019–2020, the assessment order proposed to add ₹32,16,371 disallowed under Section 80P as business income. The order noted that the petitioner had not filed its return despite conducting transactions totaling ₹8,63,55,868, including cash deposits, time deposits, and interest income. The petitioner argued that there was no finding that this amount constituted its income and highlighted inconsistencies in the computation sheet, which listed ₹8,95,72,239 as income from other sources. The petitioner also submitted that ₹23,49,186 had already been recovered, which exceeded the potential tax liability.
The Court directed that no coercive action be taken against the petitioner for AY 2019–2020 until the next hearing. Regarding AY 2020–2021, the petitioner had filed an appeal and deposited over 20% of the demand; the Court noted that coercive steps should not be taken as per Clause 4 of the CBDT circular dated 29 February 2016. Similarly, for AY 2021–2022, no coercive action was to be initiated until the next hearing.
The petitioner’s request to operate bank accounts with total deposits of ₹1,27,49,507 was deferred for consideration after hearing the respondents. Notice was issued to the respondents, returnable on 17 March 2025.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Heard learned counsel for the Petitioner. The assessment order for the assessment year 2019-2020 at page 144 of the writ petition mentions that deduction claim cannot be allowed to the tune of Rs. 32,16,371/-. The same is proposed to be added as income from business on disallowance of deduction claimed under Section 80P of Rs. 32,16,371/-. The assessment order at para 4.2.1. mentions a complete description of issues involved. The assessment order records that it is verified from the e-filing portal that the assessee has not filed his return of income for the assessment year 2019-2020 despite having made transactions to the tune of Rs.8,63,55,868/- on account of cash deposits, time deposits, interest incomes received from the bank for assessment year 20192020. Therefore, the income(s) from above transactions have not been offered to tax as per the provisions of the Income Tax Act, 1961.
2. Learned counsel for the petitioner submitted that there is no finding that this amount of Rs. 8,63,55,868/- is the income of the petitioner. On the contrary, the total income as per the proposal is assessed as Rs.32,21,371/-. In the computation sheet the income from other sources is mentioned as Rs.8,95,72,239/- which according to the learned counsel is contrary to the assessment order itself. It is therefore submitted that the demand made is exorbitant.
3. It is further submitted that so far as this income assessment is concerned, the appeal is not filed.
4. It is the contention of the learned counsel for the petitioner that already an amount of Rs.23,49,186/- has been recovered. It is the submission that even if the total tax demand of Rs. 32,00,000/- is taken to be the income, the department has recovered much more than what the tax liability on the petitioner would be.
5. In such view of the matter till the next date no coercive steps be taken against petitioner in respect of the assessment order for the assessment year 2019-2020.
6. So far as the assessment year 2020-2021 is concerned, the petitioner has already filed an appeal and an amount of more than 20% of the demand has been paid. It is submitted that as per the clause 4 of the circular dated 29/02/2016 at page 99, the respondents ought not to take coercive steps against the petitioner. A case for grant of ad-interim relief is made out. For the assessment year 2021-2022, no coercive steps to be taken against the petitioner till the next date.
7. The request for operating the bank accounts which now has total deposit of Rs.1,27,49,507/- as per the chart submitted by learned counsel for the petitioner, will be considered on the next date after hearing the respondents.
8. Issue notice to the respondents returnable on 17/03/2025.
Author Bio
