M/S.k274 Uthukuli Primary Agriculturalcooperative Credit Society Limitedrepresented By Its Secretary1, Uttukuli Post,Uttukuli, Thirupur – 638 751Pan : Aabak4347 v. Income Tax Officer,Ward 1(3), Income Tax Officer

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :18.07.2019 CORAM THE HON'BLE MR.JUSTICE M.SUNDAR W.P.No.4448 of 2019andW.M.P.Nos.5014 & 5016 of 2019 M/s.K274 Uthukuli Primary AgriculturalCooperative Credit Society LimitedRepresented by its Secretary1, Uttukuli Post,Uttukuli, Thirupur – 638 751PAN : AABAK4347E ..Petitioner vs Income Tax Officer,Ward 1(3), Income Tax Officer,No.121, Adam Building,Sixty Feet Road, Tirupur – 641 602 Prayer: Writ Petition filed under Article 226 of theConstitution of India praying to issue a Writ ofCertiorari, call for the records of the Respondent hereinin Order No.ITBA/AST/S/143(3)/2018-19/1014632062(1) passedby the respondent for the Assessment Year 2016-17 and quashthe Order dated 28.12.2018 passed therein and pass any suchfurther or other orders as this Hon'ble Court may deem fitand proper in the circumstances of the case and thus renderjustice. For Petitioner : Mr.B.Raveendran O R D E R Mr.B.Raveendran, learned counsel on record for writpetitioner and Mr.A.N.R.Jayaprathap, learned JuniorStanding counsel (Income Tax) on behalf of lone officialrespondent are before this Court. 2. With consent of learned counsel on both sides, mainwrit petition is taken up and is being disposed of. https://hcservices.ecourts.gov.in/hcservices/ 3. Owing to the nature of the trajectory which thehearing has taken today, the entire writ petition now turnson a very narrow compass. Therefore, it may not benecessary to set out facts in great detail. 4. Suffice to say that the writ petitioner is a PrimaryAgricultural Cooperative Credit Society, registered under'Tamil Nadu Cooperative Societies Act, 1983' ['TNCS Act'for brevity] 5. The instant writ petition has been filed, assailingan order dated 28.12.2018 made by the lone officialrespondent and this order bears reference OrderNo:ITBA/AST/S/143(3)/2018-19/1014632062(1).Thisorder'dated 28.12.2018 bearing reference Order No:ITBA/AST/S/143(3)/2018-19/1014632062(1)', shall hereinafter be referredto as 'impugned order'. To be noted, impugned order is anassessment order, pertaining to Assessment Year 2016-17 quawrit petitioner and the impugned order has been made by thelone official respondent under Section 143(3) of 'IncomeTax Act, 1961' ['IT Act' for brevity] 6. The pivotal submission is that the writ petitionerbeing a Cooperative Society, is entitled to variousdeductions enlisted / adumbrated under Section 80P of ITAct. That Cooperative Societies akin to the writpetitioner, which are registered under TNCS Act areentitled to claim deductions under various heads adumbratedunder Section 80P of IT Act has been laid down by thisCourt in Commissioner of Income Tax, Salem Vs. TiruchengodeAgricultural Producers Cooperative Marketing Society Ltd.,[hereinafter'TiruchengodeAgriculturalProducersCooperative Marketing Society case' for brevity] vide orderdated 02.08.2016 made in Tax Case Appeal Numbers.484 to 487and 490 of 2016. 'Tax Case Appeals' shall be referred to as'TCAs' in plural and 'TCA' in singular for the sake ofbrevity. 7. The aforesaid Tiruchengode Agricultural ProducersCooperative Marketing Society case was rendered by aHon'ble Division Bench of this Court based on VeerakeralamPrimary Agricultural Co-operative Credit Society principlebeing principle laid down by another Hon'ble Division Benchvide judgment in Commissioner of Income Tax Vs. M/s.Veerakeralam Primary Agricultural Co-operative CreditSociety dated 05.07.2016 made in TCA Nos.735, 755 of 2014and 460 of 2015 [hereinafter 'Veerakeralam PrimaryAgricultural Co-operative Credit Society principle' forbrevity]. 7. The aforesaid Tiruchengode Agricultural ProducersCooperative Marketing Society case was rendered by aHon'ble Division Bench of this Court based on VeerakeralamPrimary Agricultural Co-operative Credit Society principlebeing principle laid down by another Hon'ble Division Benchvide judgment in Commissioner of Income Tax Vs. M/s.Veerakeralam Primary Agricultural Co-operative CreditSociety dated 05.07.2016 made in TCA Nos.735, 755 of 2014and 460 of 2015 [hereinafter 'Veerakeralam PrimaryAgricultural Co-operative Credit Society principle' forbrevity]. 8. In the aforesaid cases, Hon'ble Division Benchaddressed itself to the question as to whether PrimaryAgricultural Societies carrying on the business ofproviding credit facilities to its members are entitled toclaim deductions under Section 80P of IT Act and the samewas answered in the affirmative. 9. Reverting to the case on hand, a perusal of theimpugned order reveals that it turns on two heads which asset out in the impugned order reads as follows: '(i) Large deduction under chapter VI-A fromTotal Income.(ii) Low income in comparison to high loans /advances / Investment in shares appearing inbalance sheet.' 10. With regard to (i) supra, as the Hon'ble DivisionBench of this Hon'ble Court has already held thatCooperative Societies akin to the writ petitioner areentitled to claim deductions under various heads adumbratedunder Section 80P of IT Act, the same does not survive.However, this Court is informed that Income Tax Departmentis carrying both Tiruchengode Agricultural ProducersCooperative Marketing Society case and Veerakeralam PrimaryAgricultural Co-operative Credit Society orders in TCAs toHon'ble Supreme Court. On this basis, this Court has passedan order dated 27.06.2019 in W.P.No.2552 of 2019 & etc.,batch interalia to the effect that this question is subjectto outcome of the Special Leave Petitions said to have beenfiled by the department. To be noted, this aforesaid orderdated 27.06.2019 in W.P.No.2552 of 2019 & etc., batch cameto be passed by this Court as that was the lone issuetherein, but in the instant case, that issue is dovetailedwith another issue namely (ii) supra. 11. In the aforesaid backdrop, learned counsel for writpetitioner submitted that the writ petitioner will opt forthe alternate remedy of a statutory appeal with regard tothose aspects of the impugned order excluding the aforesaidissue, which is covered by Veerakeralam PrimaryAgricultural Co-operative Credit Society and TiruchengodeAgricultural Producers Cooperative Marketing Societyprinciples. 12. This takes us to the alternate remedy aspect.Alternate remedy is available to the writ petitioner by wayof an appeal under Section 246A of IT Act. 13. There is a time limit of 30 days prescribed forpreferring an appeal under Section 246A of IT Act, whichlies to Commissioner (Appeals). 14. At the request of writ petitioner, time that hasbeen spent in the instant writ petition i.e., time from thedate of filing of instant writ petition to the date onwhich this order is made available shall stand excluded forcomputing limitation for filing an appeal under Section246A of IT Act. Even after such exclusion, if there is adelay, it is open to the writ petitioner to seekcondonation of the same under Section 249(3) of IT Act andsuch a prayer for condonation of delay shall be dealt withby the Appellate Authority on its own merits. 13. There is a time limit of 30 days prescribed forpreferring an appeal under Section 246A of IT Act, whichlies to Commissioner (Appeals). 14. At the request of writ petitioner, time that hasbeen spent in the instant writ petition i.e., time from thedate of filing of instant writ petition to the date onwhich this order is made available shall stand excluded forcomputing limitation for filing an appeal under Section246A of IT Act. Even after such exclusion, if there is adelay, it is open to the writ petitioner to seekcondonation of the same under Section 249(3) of IT Act andsuch a prayer for condonation of delay shall be dealt withby the Appellate Authority on its own merits. 15. Before parting with this case, it is necessary tomention that alternate remedy rule qua exercise of writjurisdiction is a self imposed restraint. It is a rule ofdiscretion and it is not a rule of compulsion. Though it isnot an absolute rule, Hon'ble Supreme Court in SatyawatiTandon Case [United Bank of India Vs. Satyawati Tondon andothers reported in (2010) 8 SCC 110] held that it should beexercised with greater rigour in fiscal law statutes. Moreimportantly, in Satyawati Tondon case, Hon'ble SupremeCourt held that such a rule has to be applied with utmostrigour when it comes to cases involving taxes, cess, feesetc., In other words, when it comes to fiscal statutes,these rules have to be applied with greater rigour and itis to be applied very strictly with regard to recovery oftaxes, CESS, fess etc., Satyawati Tondon principle wasreiterated by Hon'ble Supreme Court in K.C.Mathew case[Authorized Officer, State Bank of Travancore Vs. MathewK.C. reported in (2018) 3 SCC 85]. Relevant paragraph inK.C.Mathew case is paragraph 10 and the same reads asfollows: '10. In Satyawati Tondon the High Court hadrestrained further proceedings under Section 13(4)of the Act. Upon a detailed consideration of thestatutory scheme under the SARFAESI Act, theavailability of remedy to the aggrieved underSection 17 before the Tribunal and the appellateremedy under Section 18 before the AppellateTribunal, the object and purpose of thelegislation, it was observed that a writ petitionought not to be entertained in view of thealternate statutory remedy available holding: (SCCpp.123 & 128, Paras 43 & 55)“43. Unfortunately, the High Courtoverlooked the settled law that the High Court will ordinarily not entertain apetition under Article 226 of theConstitution if an effective remedy isavailable to the aggrieved person and thatthis Rule applies with greater rigour inmatters involving recovery of taxes, cess,fees, other types of public money and thedues of banks and other financialinstitutions. In our view, while dealingwith the petitions involving challenge tothe action taken for recovery of the publicdues, etc., the High Court must keep inmind that the legislations enacted byParliament and State Legislatures forrecovery of such dues are a code untothemselves inasmuch as they not onlycontaincomprehensiveprocedureforrecovery of the dues but also envisageconstitution of quasi-judicial bodies forredressal of the grievance of any aggrievedperson. Therefore, in all such cases, theHigh Court must insist that before availingremedy under Article 226 of theConstitution, a person must exhaust theremedies available under the relevantstatute. 55.It is a matter of serious concernthat despite repeated pronouncement of thisCourt, the High Courts continue to ignorethe availability of statutory remediesunder the DRT Act and the SARFAESI Act andexercise jurisdiction under Article 226 forpassing orders which have serious adverseimpact on the right of banks and otherfinancial institutions to recover theirdues. We hope and trust that in future theHigh Courts will exercise their discretionin such matters with greater caution, careand circumspection.' 55.It is a matter of serious concernthat despite repeated pronouncement of thisCourt, the High Courts continue to ignorethe availability of statutory remediesunder the DRT Act and the SARFAESI Act andexercise jurisdiction under Article 226 forpassing orders which have serious adverseimpact on the right of banks and otherfinancial institutions to recover theirdues. We hope and trust that in future theHigh Courts will exercise their discretionin such matters with greater caution, careand circumspection.' 16. This writ petition is disposed of, leaving it opento the writ petitioner to avail alternate remedy ofstatutory appeal to Commissioner (Appeals) under Section246A of IT Act, in the manner set out supra in this order. https://hcservices.ecourts.gov.in/hcservices/ 17. This writ petition is disposed of with the aboveobservations.Nocosts.Consequently,connectedmiscellaneous petitions are closed. Sd/- Assistant Registrar(CS) //True Copy// Sub Assistant Registrar kak To The Income Tax Officer,Ward 1(3), Income Tax Officer,No.121, Adam Building,Sixty Feet Road, Tirupur – 641 602 +1cc to Mr.B.Raveendran , Advocate SR.No. 61644+1cc to Mr.A.P.Srinivas , Advocate SR.No. 61751 W.P.No.4448 of 2019andW.M.P.Nos.5014 & 5016 of 2019 A.SK(27/08/2019)