M/S.TAMIL NADU CO-OPERATIVE vs. THE ASSISTANT COMMISSIOMNER

TCA.Nos.17, 20, 21 & 26 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.01.2021 CORAM : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Ms.Justice R.N.MANJULA T.C.A.Nos.17, 20, 21 and 26 of 2021 and C.M.P.Nos.255, 256 & 293 of 2021 M/s.Tamilnadu Co-operative Marketing Federation Limited, No.91, St.Mary Road, R.A.Puram, Chennai - 600 018. PAN: AABAT4288M ...Appellant in all cases Vs The Assistant Commissioner of Income Tax, Non Corporate Circle - 3, Income Tax Department, No.121, Mahatma Gandhi Road, Chennai - 600 034. ...Respondent in all cases APPEALS under Section 260A of the Income Tax Act, 1961 against the common order dated 13.05.2019 made in ITA.Nos.2498, 2499, 2500 & 2501/Chny/2017 on the file of the Income Tax Appellate Tribunal, 'A' Bench, Chennai for the assessment years 2009-10, 2010-11, 2012-13 and 2014-15. 1/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 (in all cases) For Appellant: Mr.A.S.Sriraman For Respondent: Mr.T.Ravikumar Senior Standing Counsel COMMON JUDGMENT (Delivered by

T.S.Sivagnanam,J

) These appeals have been filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the common order dated 13.05.2019 ITA.Nos.2498, 2499, 2500 & 2501/Chny/2017 on the file of the Income Tax Appellate Tribunal, 'A' Bench, Chennai ('the Tribunal' for brevity) for the assessment years 2009-10, 2010-11, 2012-13 and 2014-15. 2. T.C.A.No.17 of 2021 has been filed by raising the following substantial questions of law for consideration: “1. Whether the provisions of section 80P of the Act would permit the claim for deduction relatable to the income earned from the activities pursued by the Appellant as per the bye-laws/ memorandum on the consideration of the purposive interpretation of the statutory provision 2/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 under consideration and further on the consideration of rule of consistency? 2. Whether the provisions of section 80P of the Act permit deduction on the rental income earned from commercial space in the computation of taxable total income on the consideration of purposive legislation and further on the consideration of real income theory? 3. Whether the provisions of section 80P of the Act permit deduction on the interest income earned from various sources including the staff welfare advances in the computation of taxable total income on the consideration of purposive legislation and further on the consideration of real income theory? 4. Whether the Appellate Tribunal is justified in shifting the head of income, namely, the rental and interest income earned from various sources from income from business to income from other sources despite the permitted activities as per bye-laws/memorandum of the Appellant which impacted the claim for deductions under section 80P of the Act and the claim for set-off of brought forward losses in the computation of taxable total income? 3/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 5. Whether the provisions of section 147 of the Act permit the reopening of the proceedings for making disallowance of the claim of deductions made u/s 80P of the Act in the computation of taxable total income in the absence of fresh/tangible materials? 6. Whether the Appellate Tribunal is entitled to ignore the validity of the re-assessment completed within the scope of section 147 of the Act while considering the correctness of the claim for deductions u/s 80P of the Act made by the Appellant in the computation of taxable total income?" 3. T.C.A.No.20 of 2021 has been filed by raising the following substantial questions of law for consideration: “1. Whether the provisions of section 80P of the Act would permit the claim for deduction relatable to the income earned from the activities pursued by the Appellant as per the bye-laws/ memorandum on the consideration of the purposive interpretation of the statutory provision under consideration and further on the consideration of rule of consistency? 4/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 2. Whether the provisions of section 80P of the Act permit deduction on the rental income earned from commercial space in the computation of taxable total income on the consideration of purposive legislation and further on the consideration of real income theory? 3. Whether the provisions of section 80P of the Act permit deduction on the interest income earned from various sources including the staff welfare advances in the computation of taxable total income on the consideration of purposive legislation and further on the consideration of real income theory? 4. Whether the Appellate Tribunal is justified in shifting the head of income, namely, the rental and interest income earned from various sources from income from business to income from other sources despite the permitted activities as per bye-laws/memorandum of the Appellant which impacted the claim for deductions under section 80P of the Act and the claim for set-off of brought forward losses in the computation of taxable total income?" 5/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 4. T.C.A.No.21 of 2021 has been filed by raising the following substantial questions of law for consideration: “1. Whether the provisions of section 80P of the Act would permit the claim for deduction relatable to the income earned from the activities pursued by the Appellant as per the bye-laws/ memorandum on the consideration of the purposive interpretation of the statutory provision under consideration and further on the consideration of rule of consistency? 2. Whether the provisions of section 80P of the Act permit deduction on the rental income earned from commercial space in the computation of taxable total income on the consideration of purposive legislation and further on the consideration of real income theory? 3. Whether the provisions of section 80P of the Act permit deduction on the interest income earned from various sources including the staff welfare advances in the computation of taxable total income on the consideration of purposive legislation and further on the consideration of real income theory? 6/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 4. Whether the Appellate Tribunal is justified in shifting the head of income, namely, the rental and interest income earned from various sources from income from business to income from other sources despite the permitted activities as per bye-laws/memorandum of the Appellant which impacted the claim for deductions under section 80P of the Act and the claim for set-off of brought forward losses in the computation of taxable total income? 5. Whether the provisions of section 147 of the Act permit the reopening of the proceedings for making disallowance of the claim of deductions made u/s 80P of the Act in the computation of taxable total income in the absence of fresh/tangible materials? 6. Whether the Appellate Tribunal is entitled to ignore the validity of the re-assessment completed within the scope of section 147 of the Act while considering the correctness of the claim for deductions u/s 80P of the Act made by the Appellant in the computation of taxable total income?" 7/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 5. T.C.A.No.26 of 2021 has been filed by raising the following substantial questions of law for consideration: “1. Whether the provisions of section 80P of the Act would permit the claim for deduction relatable to the income earned from the activities pursued by the Appellant as per the bye-laws/ memorandum on the consideration of the purposive interpretation of the statutory provision under consideration and further on the consideration of rule of consistency? 2. Whether the provisions of section 80P of the Act permit deduction on the rental income earned from commercial space in the computation of taxable total income on the consideration of purposive legislation and further on the consideration of real income theory? 3. Whether the provisions of section 80P of the Act permit deduction on the interest income earned from various sources including the staff welfare advances in the computation of taxable total income on the consideration of purposive legislation and further on the consideration of real income theory? 8/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 4. Whether the Appellate Tribunal is justified in shifting the head of income, namely, the rental and interest income earned from various sources from income from business to income from other sources despite the permitted activities as per bye-laws/memorandum of the Appellant which impacted the claim for deductions under section 80P of the Act and the claim for set-off of brought forward losses in the computation of taxable total income? 5. Whether the provisions of section 147 of the Act permit the reopening of the proceedings for making disallowance of the claim of deductions made u/s 80P of the Act in the computation of taxable total income in the absence of fresh/tangible materials? 6. Whether the Appellate Tribunal is entitled to ignore the validity of the re-assessment completed within the scope of section 147 of the Act while considering the correctness of the claim for deductions u/s 80P of the Act made by the Appellant in the computation of taxable total income?" 9/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 6. We have heard Mr.A.S.Sriraman, learned counsel appearing for the appellant/assessee and Mr.T.Ravikumar, learned Senior Standing Counsel appearing for the respondent/Revenue. 7. The learned counsel for the appellant/assessee submits that the appellant/assessee has already filed the declaration/undertaking under the Vivad Se Vishwas Scheme and is awaiting orders to be passed in Form No.3. 8. In the light of the subsequent event, the Competent Authority shall process the application/declaration in accordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of 2020) and pass appropriate orders as expeditiously as possible. The assessee is given liberty to restore these appeals in the event the ultimate decision to be taken on the declaration filed by the assessee under Section 4 of the said Act is not in favour of the assessee. If such a prayer is made, the Registry shall entertain the prayer without insisting upon any application to be filed for condonation of delay in restoration of the appeals and on such request made by the assessee by 10/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 filing a miscellaneous petition for restoration, the Registry shall place such petition before the appropriate Division Bench for orders. 9. The tax case appeals stand disposed of with the aforementioned liberty and the substantial questions of law framed are left open. No costs. Consequently, connected miscellaneous petitions are closed. (T.S.S.,J.) (R.N.M.,J.) 18.01.2021 Index: Yes/No Internet:Yes/No Speaking Judgment/Non speaking Judgment hvk To 1. The Income Tax Appellate Tribunal, 'A' Bench, Chennai. 2. The Assistant Commissioner of Income Tax, Non Corporate Circle - 3, Income Tax Department, No.121, Mahatma Gandhi Road, Chennai - 600 034. 11/12 https://www.mhc.tn.gov.in/judis/ TCA.Nos.17, 20, 21 & 26 of 2021 T.S.SIVAGNANAM,J AND R.N.MANJULA,J hvk T.C.A.Nos.17, 20, 21 and 26 of 2021 and C.M.P.Nos.255, 256 & 293 of 2021 18.01.2021 12/12 https://www.mhc.tn.gov.in/judis/