2013 (1) TMI 341 - HC - Income Tax

Exemption from TDS on the interest income received - assessee claim to fall within the purview of the notification issued by GOI u/s 194 (A)(iii) (f) - petitioner is a society registered under Travancore-Kochi Literary Scientific and Charitable Societies Registration Act, 1955 - Held that - Reading of the provision of the notification shows that in so far as Societies are concerned, only such of those Societies which are registered under the Societies Registration Act 1860 are exempted. The terms of the notification itself show that a society like the petitioner which is registered under the Travancore-Kochi Literary Scientific and Charitable Societies Registration Act 1955 are not exempted from the levy of TDS. Dispose of this writ petition leaving it open to the petitioner to approach the AO by making an application under Section 197 of the Income Tax Act.

Summary

Issues:
Interpretation of notification under Section 194 A (iii) (f) of the Income Tax Act for exemption from deduction of tax on interest income received by a society registered under the Travancore-Kochi Literary Scientific and Charitable Societies Registration Act, 1955.

Analysis:
The petitioner, a society registered under the Travancore-Kochi Literary Scientific and Charitable Societies Registration Act, 1955, sought a declaration to be exempted from tax deduction on interest income under a notification issued by the Government of India under Section 194 A (iii) (f) of the Income Tax Act. The notification specified exemptions for societies registered under the Societies Registration Act 1860. The court noted that the terms of the notification explicitly excluded societies registered under the Travancore-Kochi Literary Scientific and Charitable Societies Registration Act 1955 from the exemption. The court emphasized the need to interpret exemption provisions strictly and observed that the notification's wording limited the exemption to societies registered under the Societies Registration Act 1860, thereby denying the petitioner's claim for exemption.

The court highlighted that Section 197 of the Income Tax Act empowers the assessing officer to grant certificates for lower tax deduction or no deduction if the recipient's total income justifies it. Consequently, the court disposed of the writ petition, advising the petitioner to approach the assessing officer under Section 197 for possible relief. The judgment clarified that the petitioner's request for exemption based on the notification could not be granted due to the specific registration requirement outlined in the notification. The petitioner was directed to pursue relief through the appropriate application process under Section 197 of the Income Tax Act, leaving the possibility of a lower tax deduction open for consideration by the assessing officer.