9911796707
TMI Blog2022 (11) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... ties function for the purposes of advancing crop and fertilizer loans to agriculturalists and have accounts with R2 banks - HELD THAT:- Identical issue arose in a batch of matters in the case of S.N. 299 Molasi Primary Agricultural Cooperative Credit Society [2022 (11) TMI 1213 - MADRAS HIGH COURT] it was open to the banks to establish before the assessing officers that the sums withdrawn by the member societies did not represent income in their hands, after considering the evidence available in that regard. The aforesaid examination can be carried out only in the instance of the societies and not at the instance of the banks, who are payers, with statutory responsibility to deduct. That apart, the matter is stated to be pending in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitions has been filed by Primary Agricultural Co-operative Credit Societies (in short 'Society/Societies') and turns on the appreciation of a common set of facts as well as legal provisions. 2. All the petitioner societies challenge Circulars issued by the District Central Cooperative Banks, Salem and Kancheepuram arrayed as R2 in all writ petitions except W.P. Nos. 2221, 2242, 2238, 2236, 2227, 2662 arrayed as R1 (referred to as 'Banks') bearing Na.Ka. No. 2416/95/Accts. Dated 16.03.2021 and Na.Ka. 1545/2006-07/P.13 dated 29.03.2021 respectively. The societies function for the purposes of advancing crop and fertilizer loans to agriculturalists and have accounts with R2 banks. 3. I have had occasion to consider the identical issue as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... small traders. 6. That apart, the funds withdrawn by the petitioners for onward transmission to the farmers, even if construed to be the income of the petitioner societies together with other incomes earned by the societies, are entitled for deduction in terms of Section 80P of the Act. This would also support their stand that no tax is liable to be deducted at source from the withdrawals. 7. The petitioners additionally submit that, in the budget speech of the Hon'ble Finance Minister, while introducing Section 194N, the proposal for deduction of tax of cash withdrawals was restricted to business payments only. The avowed object was 'to discourage the practice of making business payments in cash' and it was proposed 'to levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MCs and thus argue that there would be no liability to tax and consequently no necessity to deduct tax at source. 11. The respondents contest the writ petitions vehemently. The Income tax department reiterates the mandatory nature of Section 194 N. Only the Kanchipuram Central Cooperative Bank Ltd has filed a counter in W.P. No.21856 of 2022 challenging the maintainability of the Writ Petitions in light of the decision of this Court in K. Marappan V. Deputy Registrar of Co-operative Society (2006 (4) MLJ 641). 12. The Full Bench of this Court has in the above decision, held that under the scheme of the Tamil Nadu Cooperative Societies Act, 1983, it is only the alternative and statutory appeal mechanism, particularly appeal provision u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction at nil/lower rate under various provisions of the Act. However, Section 194N is conspicuous by its absence therein, and does not figure in the list of such provisions. 16. The intention is clear, that compliance with the requirement of Section 194 N is non-negotiable except in line with the specific exceptions stipulated under the proviso extracted below: Provided also that nothing contained in this section shall apply to any payment made to- (i) the Government; (ii) any banking company or co-operative society engaged in carrying on the business of banking or a post office; (iii) any business correspondent of a banking company or cooperative society engaged in carrying on the business of banking, in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T North Block who would process such requests.' The petitioners may thus approach the competent authority in the Government seeking relief from the application of Section 194N of the Act. 19. The submissions in relation to the grant of deduction under Section 80P are premature as is reliance upon the judgement in the matter of Eli Lilly. Eligibility to deduction must be tested by the authorities in the course of assessment as it involves the determination of several questions of fact. The society is always entitled to, in the return of income filed by it, seek credit of the taxes attributable to the income returned by it and any excess deduction, if the stand of the societies is accepted in assessment, would have to be refunded to them. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
