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TMI Blog2016 (2) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... MEMBER For The Appellant : Mr.R.Vijayaraghavan,Advocate For The Respondent : Mr.P.Radhakrishnan,JCIT, D.R ORDER PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: These four appeals are filed by the Assessee, aggrieved by the common order of the Learned Commissioner of Income Tax(A)- 13, Chennai dated 21.09.2015 in ITA No.213,214, 215 216/CIT(A)-13/14-15 passed under Sec.143(3) read with section 147 Sec. 250 of the Act for the assessment years 2008-09 to 2011-12. 2.1 The Assessee has raised three elaborate grounds in its appeals, however the crux of the issue is that the Assessee is aggrieved by the order of the Ld. CIT (A), who has erred in confirming the orders of the ld. Assessing Officer by holding that the assessee falls in the category of primary credit society as defined in sec 5(ccvi) of Banking Regulation Act is not eligible for deduction u/s.80P of the Act. 2.2. Additional grounds: The CIT(A) ought to have appreciated that the Appellant activities are with its members and hence the income of the society dividend from the Members are exempted from income tax liability on account of mutuality. 3.1 The brief facts of the case are that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is decided in favour of the assessee by the Hon. Jurisdictional High Court in Tax Case (Appeal) Nos.588 to 643, 647 to 688, 744 to 750, 942 to 948, 969 to 982 of 2015 vide order dated 15.10.2015. The Ld.D.R, On the other hand argued in support of the orders of the Revenue, however could not controvert to the submissions of the Ld. A.R. 5. We have heard both the parties and carefully perused the decision cited by the Ld.A.R and the materials available on record. As pointed out by the Ld. A.R., the issue is covered by the decision of the Hon ble jurisdictional High Court cited supra. While deciding the appeal, the Hon ble Jurisdictional High Court had framed the following two substantial question of law (i) Whether a co-operative society, carrying on banking business with the approval of the Reserve Bank of India, is liable to deduct tax U/s.194A of the Income Tax Act, 1961 on the interest paid to its members? (ii) Whether there is any distinction between a co-operative bank and a co-operative society carrying on banking business and if so, under which category the appellant would fall? On the second question framed by the Hon ble Madras High Court, it was held as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds paid by a co-operative society to a member thereof or , the words and brackets paid by a co-operative society (other than a co-operative bank) to a member thereof or to such income credited or paid by a co-operative society shall be substituted; (c) after clause (v), the following Explanation shall be inserted, namely:-- Explanation.--For the purposes of this clause, co-operative bank shall have the same as meaning assigned to it in Part V of the Banking Regulation Act, 1949; (d) for clause (ix), the following clauses shall be substituted, namely:- (ix) to such income credited by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal; (ixa) to such income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal where the amount of such income or, as the case may be, the aggregate of the amounts of such income paid during the financial year does not exceed fifty thousand rupees; (e) in Explanation 1 below clause (xi), for the word excluding , the word including shall be substituted. 62. The relevant portion of the memorandum explaining the clauses in the Finance Bill r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x on payment of interest on time deposit and cannot avoid the same by taking the plea of the general exemption provided under section 194A(3)(v) of the Act. This is because the specific provision of tax deduction provided under section 194A(3)(i)(b) and 194A(3)(viia)(b) of the Act for cooperative banks override the general exemption provided to all co-operative societies for non-deduction of tax from interest payment to members under section 194A(3)(v) of the Act. As there is no difference in the functioning of the co-operative banks and other commercial banks, the Finance Act, 2006 and Finance Act, 2007 amended the provisions of the Act to provide for cooperative banks a taxation regime which is similar to that for the other commercial banks. Therefore, there is no rationale for treating the co-operative banks differently from other commercial banks in the matter of deduction of tax and allowing them to avail the exemption meant for smaller credit cooperative societies formed for the benefit of small number of members. However, as mentioned earlier, a doubt has been created regarding the applicability of the specific provisions mandating deduction of tax from the payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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