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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD
Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU
O R D E R PER S.S.GODARA, J.M. : This Assessee’s appeal for AY.2013-14 arises from the CIT(A), Tirupathi’s order dated 24-04-2019 passed in case No. 10117/2017-18, involving proceedings u/s. 143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]. Case called twice. None appears at assessee’s behest. Heard Sri Waseem Ur Rehman, learned DR representing the Revenue.
:- 2 -: The Kuppam Co-op. Town Bank Ltd., Kuppam The Assessee’s sole substantive ground pleaded in the instant appeal reads as under:
The ld.CIT(A) is not legally correct and proper in dismissing the claim of the assessee, the addition of Rs5,15,522/- added by the assessee as no TDS was made on the interest payments to its members, following the decision of the hon’ble high court of Madras in the case of Coimbatore District Central Co-operative Bank Ltd; reported in 382 ITR 266 (Mad)(HC)
Coming to the sole issue of applicability of sec 194A(3)(v) qua the assessee/ a co-operative society’s interest payments made to its members, we note that this tribunal’s coordinate bench’s order dated 25..06.2021 in ITA 482 & 483/Hyd/2018 in ACIT vs. Tirupathi Co-operative Bank Ltd. Holds in light of the Finance Act, 2015’s prospective amendment w.e.f. 1.6.2015 that the same; excluding a co-operative bank from the purview of a co-operative society u/s 194A(3)(v), that the impugned TDS deduction does not apply in respect to interest payments made to members as follows:
4. We have given our thoughtful consideration to rival pleadings against and in support of the impugned Section 40(a)(ia) disallowance pertaining to the assessee a co- operative bank having not deducted TDS whilst making interest payments exceeding Rs.10,000/- each to its members. The Revenue's case in light of its pleadings is that the CIT(A) has erred in law and on facts in making the assessee's act of non- deduction of TDS as covered u/s.194A(3)(v) than u/s.194A(3)(i)(b) for the reason that the same are general and specific provisions; respectively wherein the latter prevails over the former generalia specialibus non derogant". We find no merit in Revenue's
:- 3 -: The Kuppam Co-op. Town Bank Ltd., Kuppam foregoing arguments. This is for the reason that although Section 194A3(i)(b) prescribes the threshold limit of TDS deduction as Rs.10,000/- in the impugned assessment year(s), section also contains sub clause-(v) that this mechanism does not come into play in case of payments made by a co-operative society to its members. We make it clear that we are dealing with AYs.2013-14 and 2014-15 whereas the legislature has excluded a co-operative bank vide Finance Act, 2015 w.e.f.01-06-2015 only. It further transpires that the Hon'ble President of the tribunal had also constituted a Special Bench in & 2056/Chny/2014 in The Virudhunagar District Central Co-operative Bank Ltd. Vs. ITO u/s.255(4) of the Act to this effect. The said learned Special Bench's order dt.09-10-2018 has decided the very issue in assessee's favour and against the department by following hon'ble Madras high court's judgement (supra) mutatis mutandis. Their lordships have also considered the explanatory Memorandum to the Finance Bill 2015 to hold that the foregoing amendment in Section 194A(3)(i)(v) of the Act excluding a co-operative bank from a co-operative society; applies with prospective effect only. It has been further emphasized in para 53 of the said hon'ble high court's detailed discussion that "if a taxing statute and an exclusion clause contained in a taxing statute are to be construed strictly, the provisions themselves should make it clear as to who are to be charged or exempted and what are the circumstances under which they are charged or excluded". We adopt the very analogy herein as well to hold that the exclusion clause herein is section 194A(3)(v) of the Act. We reject Revenue's substantive grounds raised in the instant appeal in light thereof. The CIT(A)'s identical action deleting Section 40(a)(ia) disallowance in both these years stands upheld.”
3. We adopt the above extracted detailed reasoning mutatis mutandis to delete the impugned sec.40(a)(ia) disallowance of Rs.5,15,522/-. This assessee’s appeal is allowed in above terms.
:- 4 -: The Kuppam Co-op. Town Bank Ltd., Kuppam We lastly acknowledge that although the instant lis is being decided after a period of 90 days from the date of hearing as per Rule 34(5) of the IT(AT) Rules 1963, the same however, does not apply in the covid lockdown situation as per hon'ble apex court's recent directions dated 27-04-2021 in M.A.No.665/2021 in SM(W)C No.3/2020 'In Re Cognizance for extension of limitation' making it clear that in such cases where the limitation period (including that prescribed for institution as well as termination) shall stand excluded from 14th of March, 2021 till further orders. Pronounced in Open Court on 02nd September, 2021.