2023 (2) TMI 1168 - HC - Income Tax

TDS u/s 194N - cash withdrawals exceeding Rs.1 and from their accounts from District Cooperative Banks - Validity of Circulars issued by the District Co-operative Banks informing the Petitioners about the enforcement of tax deduction at source - HELD THAT - As brought to notice that the Hon ble Chief Minister has sent a letter dated 24.03.2020 to the Hon ble Finance Minister Government of India and that the Chief Secretary Government of Tamil Nadu has sent a Letter in D.O. Lr. No. 15350/CC1/2022 dated 27.09.2022 to the Chairperson Central Board of Direct Taxes New Delhi making requests to exempt the Primary Agricultural Cooperative Credit Societies and other Primary Co-operative Societies from the provisions of Section 194-N of the Income Tax 1961 for the cash withdrawal exceeding Rs. 1 Crore from their accounts from District Co-operative banks. Petitioners seek permission of the Court to withdraw these Writ Petitions reserving the rights of the Petitioners to pursue the matter for exemption and if any adverse order is passed to work out their remedies in that regard before the proper Forum in the manner recognized by law and they have made endorsements to that effect in the court records.

Summary

Issues:
Challenging Circulars on tax deduction at source under Section 194-N of the Income Tax Act, 1961 by District Co-operative Banks.

Analysis:
The High Court of Madras heard multiple Writ Petitions challenging Circulars issued by District Co-operative Banks regarding tax deduction at source under Section 194-N of the Income Tax Act, 1961, for cash withdrawals exceeding Rs.1 from the petitioners' accounts. The petitioners sought exemption for Primary Agricultural Cooperative Credit Societies and other Primary Co-operative Societies from this provision. The Chief Minister and Chief Secretary of Tamil Nadu had corresponded with the Finance Minister and Central Board of Direct Taxes, respectively, requesting such exemptions.

The petitioners, through their learned counsel, requested the court's permission to withdraw the Writ Petitions while reserving their rights to pursue the matter for exemption and seek remedies if adverse orders were passed. The petitioners made endorsements in the court records to this effect. Consequently, the court dismissed the Writ Petitions as withdrawn with the mentioned clarifications, and the connected Miscellaneous Petitions were closed without any costs incurred.