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2011 Supreme(Raj) 1374
[Citation : 2012(2) RLW 1492 (Raj.)]
(Rajasthan High Court)
P.L.V.P. Bachat Evam Sakh Sahkari Samiti Vs. U.O.I. (Dr. Kothari, J.)
HON'BLE DR. VINEET KOTHARI, J.
Pushtikar Laghu Vyaparik Pratishthan Bachat Evam Sakh Sahkari Samiti Ltd.
Versus
Union of India & Ors.
S.B. Civil Writ Petition No. 8537 of 2011, decided on 05.12.2011
Dinesh Mehta, for Petitioner;
K.K. Bissa, for Respondents
Headnote:Income Tax Act, 1961, Secs. 147/148 — Reassessment/reopening proceedings u/S. 147/148 of the Act — Income to the tune of Rs. 11,99,228/- chargeable to tax escaped assessment — Contention that notice is barred by limitation of 4 years and petitioner society being banking company, its total income is deductible u/S. 80(p)(2)(a)(i) of the Act — Held — Limitation would not apply as Assessing Authority obtained the approval of Commissioner u/S. 151 of the Act and assessee failed to disclose fully and truly all material facts — Such interest income of investment would not be business profit and therefore, would not be deductible from income u/S. 80(p)(2) of the Act — Both the questions are mixed questions of law and facts which deserve to be adjudicated upon by assessing authority — Premature to decide at this stage. (Paras 8 to 13)
Writ petition dismissed.
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2. The Assessing Authority- Dy. Commissioner, Income Tax, Circle-2, Jodhpur gave the said notice and supplied the reasons for issuance of said notice upon demand by the assessee vide his letter dtd. 11.4.2011 which reasons according to the Assessing Authority are as under:
"REASONS FOR RE-OPENING THE CASE U/s. 147 OF THE L.T. ACT, 1961
M/s. Pushtikar Laghu Vyaparik Pratishthan
Evam Shakh Sahakari Samiti Ltd.
Jodhpur.
In this case assessee has filed return of income for A.Y. 2004-2005 amounting of Rs. 81,23,534/- and claiming exemption u/S. 80P of the I.T. Act, 1961 and declared NIL Income on 29.10.2004.
The assessment has been completed u/S. 143 (3) on 6.7.2005 at the returned income NIL...
The Hon'ble Supreme Court of India has announced decision in favour of department in the case S.L.P. (C.No. 7527 of 2009) in the case of M/s. Totgar's Coop. Society Ltd. - reg - The decision is quoted in the 322 IT at page No. 283 (SC). There is similar issue involved in the M/s. Pustikar Laghu Vyaparik Pratisthan Evan Shakh Sahakari Samiti Ltd., Jodhpur. The A.O. has allowed 80P on the interest received of Rs. 11,99,228/- on various FDRs. As per the decision of Hon'ble Supreme Court it will be taxed as income from other sources and it is taxable. I have reason to believe that income to tune of Rs. 11,99,228/- chargeable to tax has escaped assessment of the for the A.Y. 2004-05.
dated : 5.3.2011."
3. The present writ petition was filed by the assessee in this Court on 12.9.2011 and while issuing notice to the respondents, this Court vide order dtd. 22.9.2011 directed that assessing authority- respondent No. 2 will not pass any final order in pursuance of impugned notice under Section 147/148 of the Act. The respondents have filed reply to the writ petition along with the additional affidavit of respondent with approval of CIT for issuance of such notice, to which a rejoinder has also been filed by the petitioner.
4. The certificate of registration and objectives and functions of petitioner-society to the relevant extract are extracted below:
"In pursuance of the provisions of the Multi State Cooperative Societies Act, 2002, a Society by the name of Pustikar Laghu Vyaparik Prastisthan Bachat Evam Sakh Sahkari Samiti Ltd., Jodhpur (Rajasthan) with the registered office at 4 F. 71, New Power House Road, Jodhpur (Rajasthan) has been registered, by conversion, as Multi-State Cooperative Society under Section 22 of the Multi -State Cooperative Societies Act, 2002 (39 of 2002) and the Rules thereunder. The registration number of the Society is MSCS/CR/253/2007. The area of operation of the Society will be confined to the States of Rajasthan Maharashtra & Andhra Pradesh.
5. OBJECTIVES AND FUNCTIONS
The following are the objectives and functions of the Society:
a. Promote social and economic betterment of members through self help and mutual aid in accordance with co-operative principles specified in the First Scheduled of the act.
b. To make available funds for members for establishing business, trading activities, meeting social, domestic and religious requirements. This fund is available for members, non-members and other similar financial institution."
5. The learned counsel for the petitioner, Mr. Dinesh Mehta mainly raised following two contentions before this Court for assailing the impugned notice under Section 147/148 of the Act:
(i) The said notice dtd. 18.3.2011 for assessment year 2004-2005 is barred by limitation of 4 years prescribed under Section 147 of the Act.
(ii) The petitioner-Society admittedly being banking company, its total income is deductible under Sec. 80P(
