9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (4) TMI 644 - AT - Income TaxTDS u/s 194A - payment of interest by the assessee to its members and to the other co-operative societies for want of deduction of tax at source - invoking provisions of sections 201(1) and 201(1A) - Held that - Identical issue was considered and decided by the co-ordinate bench of this Tribunal vide order dt.30.5.2014 in the case of Bagalkot Central District Co-operative Society (2015 (1) TMI 1005 - ITAT BANGALORE ) wherein the Bench has held that co-operative society carrying on banking business need not to deduct tax at source under Section 194A in respect of the interest paid to members on deposits by virtue of exemption granted vide clause (v) of the sub-section (3) of the said section. - Decided in favour of assessee
Issues:
- Whether the assessee, a co-operative society engaged in banking services, was liable for default in deducting tax at source under Sections 201(1) and 201(1A) of the Income Tax Act, 1961 for the Assessment Years 2012-13 and 2013-14. - Whether the assessee was required to deduct tax at source when making interest payments to its members or to other co-operative societies without obtaining declaration in Form No.15G/15H. - Whether the exemption granted under Section 194A(3)(v) of the Act applied to the assessee's case, absolving them from the obligation to deduct tax at source. Analysis: 1. The Revenue filed five appeals against the orders of the Commissioner of Income Tax (Appeals) concerning the non-deduction of tax at source by the assessee, a co-operative society engaged in banking services. The Assessing Officer found the assessee liable for default in deducting tax at source from interest payments to non-members but not to its own members or other co-operative societies without Form No.15G/15H declarations. The CIT (Appeals) accepted the assessee's claim that they were not obligated to deduct tax at source under Section 194A(3)(v) of the Act, citing a Tribunal decision in a similar case. 2. The Tribunal considered the issue and observed that previous decisions had established that co-operative societies engaged in banking activities need not deduct tax at source under Section 194A when paying interest to members, as per the exemption under Section 194A(3)(v). The Tribunal referred to specific provisions of the Act and a chart illustrating the applicability of tax deduction based on the type of interest payment and payee. The Tribunal also highlighted the distinction between different types of co-operative societies and the classification of payees as members or non-members for tax deduction purposes. 3. The Tribunal addressed arguments raised by the Departmental Representative regarding conflicting interpretations of the law and cited relevant circulars clarifying the exemption under Section 194A(3)(v) for co-operative societies. The Tribunal emphasized that the exemption for co-operative societies paying interest to members was distinct from provisions applicable to non-member depositors. Additionally, the Tribunal considered decisions from other benches and upheld the CIT (Appeals) orders, concluding that the assessee was entitled to the exemption and dismissing the Revenue's appeals. 4. In the final judgment, the Tribunal upheld the CIT (Appeals) orders, stating that the co-operative society was not in error for not deducting tax at source under Section 194A(3)(v) when making interest payments to its members or other co-operative societies. The appeals by the Revenue were dismissed, confirming the assessee's entitlement to the exemption under the Income Tax Act. Conclusion: The judgment by the Appellate Tribunal ITAT BANGALORE addressed the issues of tax deduction at source by a co-operative society engaged in banking services, highlighting the exemption under Section 194A(3)(v) of the Income Tax Act. The Tribunal relied on precedents and legal provisions to conclude that the assessee was not liable for default in deducting tax at source when making interest payments to members or other co-operative societies, ultimately dismissing the Revenue's appeals.
|
