2015 (4) TMI 374

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..... tax at source, meaning thereby that an interest credited below ₹ 10,000/- by urban co-operative Bank will not be liable for the tax deducted at source. Even the learned Asstt. Solicitor General conceded to the position that for amount below ₹ 10,000/- TDS is not required to be deducted by the urban co-operative Bank. The Circular dated 23.10.2003, issued by respondent no.3, thereby directing deduction of tax at source on the deposits does not clarity the aforesaid aspect. The Circular will have to be read in a manner that if the amount more than ₹ 10,000/- is credited as an interest on time deposits. Then the urban co-operative Bank is liable to deduct the TDS as is laid down in said provisions of section 194A and that .....

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..... aced by the respondents on section 194A (3) (viia) is misplaced and not in consonance with the rules of interpretation. The leaned Counsel relies on the judgment of the Apex Court in the case of Mathuram Agrawal vs. State of Madhya Pradesh, reported in AIR 2000 SC 109. 3. Mr. Sharma the learned Asstt. Solicitor General submits that the Commissioner of Income Tax, vide the impugned circular has only clarified the legal position as covered under section 194A of the Income Tax Act. Section 194A(3) (viia) is clear and specific. The exemption is given to the co-operative societies carrying on banking business as specified in said clause (viia) and not to any other Banks. The exemption also is given to deposits other than the time deposits. .....

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..... or paid by a co-operative society to a member thereof or to any other co-operative society. Sub-clause (viia) (a) and (b) lays down the specific categories of the banks which are exempted from deducting TDS. The income accrued on the deposits other than the time deposits made after 1 st day of July, 1995 is not exempted from deducting the TDS by urban co-operative Bank. Sub clause (viia) (a) does not include urban co-operative Bank and sub clause (b) of clause (viia) limits the exemption to deposits other than the time deposits. 6. It is a settled proposition of law that various sub-sections in a provision have to be read in harmony. A head on collision between sub-sections of the same provision has to be avoided. They cannot be rea .....

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