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TMI Blog2018 (9) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant Co-operative Bank was not under obligation to deduct the amount from the TDS, for the assessment years prior to 1/06/2015 i.e. from 2010-11 to 2013-14. Assessee had not defaulted in not deducting tax at source out of such payments made to its members / Co-operative societies. Thus, there was no liability to deduct tax at source and the assessee cannot be said to have violated the provisions of section 194A - decided in favour of assessee. - ITA No.1967/PUN/2016 - - - Dated:- 25-9-2018 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM For The Appellant : Shri Sanket Joshi For The Respondent: Shri Pankaj Garg ORDER PER SUSHMA CHOWLA, JM: The appeal filed by assessee is against order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of said amendment which is prospective in nature, the co-operative banks were not liable to deduct TDS in respect of interest paid to its members and therefore, the disallowance u/s 40(a)(ia) made for this year is not justified. 3. The issue raised in the present appeal is against obligation of assessee Co-operative bank to deduct tax at source out of interest paid on deposits of its members. 4. The learned Authorized Representative for the assessee at the outset pointed out that the issue raised in the present appeal is squarely covered by the ratio laid down by the Hon ble Bombay High Court in Saraswat Co-operative Bank Ltd. Vs. ITO and Anr in Tax Appeal Nos.3 to 9 11 of 2015, judgment dated 07.03.2017 and the Pune Bench of Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f an individual or Hindu Undivided Family, the said provisions are applicable on satisfaction of certain conditions, but for deciding the present issue before us, same are not relevant. 10. The assessee before us is a Co-operative Bank. Certain exemptions are provided which are enlisted in sub-section (3) of section 194A of the Act, which lays down that provisions of sub-section (1) shall not apply and we are concerned with clause (v) thereunder, which reads as under:- 194A(3) The provisions of sub-section (1) shall not apply .. (v) to such income credited or 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 to any ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x from payment of interest on time deposits of its members, on or after 01.06.2015. It is also clarified that Hence, a cooperative bank was not required to deduct tax from the payment of interest on time deposits of its members paid or credited before 1st June, 2015. 13. The Hon ble Bombay High Court in Saraswat Co-operative Bank Ltd. Vs. (1) ITO (2) Union of India (supra) referred to the Explanatory Notes of the provisions of the Finance Act, 2015, dated 27.11.2015, wherein the position was clarified about obligation of Co-operative banks from deduction of tax at source under section 194A of the Act. The Hon ble High Court referred to the Explanatory Note para 42.5 and stated that position of relevant law is clearly specified in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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