Case Law Details
CIT Vs Tamilnadu Cooperative Housing Federation Ltd. (Madras High Court)
Introduction: In a significant legal development, the Madras High Court recently delivered a noteworthy judgment in the case of CIT vs. Tamilnadu Cooperative Housing Federation Ltd. This ruling pertains to a Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal, Madras ‘D’ Bench, dated 20.02.2014 (ITA No.2185/Mds/2013).
Detailed Analysis: The crux of the matter revolves around two pivotal questions of law raised in the appeal:
(i) Deduction under Section 80P(2): The Income Tax Appellate Tribunal had directed the assessing officer to allow deduction under Section 80P(2) of the Income Tax Act to the assessee. The question arises – was the Tribunal justified in upholding this order of the Commissioner of Income Tax (appeals)? The case involves a meticulous examination of the facts and circumstances.
(ii) Restriction by Section 80P(4): Another critical question addressed is whether the claim for deduction by the assessee is restricted by Section 80P(4) of the Income Tax Act. The Tribunal held in favor of the assessee, asserting that Section 80P(4) does not impose limitations on the deduction claimed. This involves a detailed legal analysis in the context of the specific nature of the cooperative society involved.
Reference is made to a previous Division Bench decision (Tax Case Appeal Nos. 655 to 658 of 2016) that considered similar substantial questions of law. The court in that case ruled in favor of the assessee, emphasizing that being a mere cooperative society and not a cooperative bank, the deduction under Section 80P(2) should be allowed.
Given the precedent and the nature of the present case, the court found no error in the conclusions reached by the Assessing Officer, the Appellate Authority, and the Tribunal. The judgment supports the position that Section 80P(4) does not restrict the deduction claimed by a cooperative society under Section 80P(2).
Conclusion: In conclusion, the Madras High Court’s decision in CIT vs. Tamilnadu Cooperative Housing Federation Ltd. establishes a crucial precedent. The judgment reinforces the interpretation that Section 80P(4) does not act as a hindrance to the deduction claimed by cooperative societies under Section 80P(2). This ruling is a significant clarification that will have implications for similar cases, providing clarity on the application of these provisions in the context of cooperative societies.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The Revenue has preferred this Tax Case Appeal under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras ‘D’ Bench, dated 20.02.2014 in ITA No.2185/Mds/2013.
2. The following two substantial questions of law have been raised for consideration in this Appeal:-
(i) Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in upholding the order of the Commissioner of Income Tax (appeals), directing the assessing officer to allow deduction under Section 80P(2) of the Income Tax Act, to the assessee?
(ii) Whether under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law, in holding that the assessee’s claim for deduction is not restricted by Section 80P (4) of the Income Tax Act?
3. While dealing with Tax Case Appeal Nos. 655 to 658 of 2016, a Division Bench of this Court to which one of us (Nooty. Ramamohana Rao, J) is a member, had occasion to consider the very same substantial questions of law which have fallen for consideration in this appeal and those substantial questions of law were answered in favour of the Assessee and against the Revenue, as the Assessee is a mere Co-operative Society but not a Co-operative Bank.
4. In that view of the matter, we have not found any error committed by the Assessing Officer, the Appellate Authority and the Tribunal in coming to the conclusions to which they have arrived at. We subscribe to the same reasoning and accordingly, we dismiss this Tax Case Appeal. No costs.
