THE COMMISSIONER OF INCOME T vs. THE GEORGE TOWN CO-OPERATIVE

PDF · subscribers
TCA/393/2020HC Madras24 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. Instead, the learned counsel for the appellant/Revenue brought to the court's notice CBDT Circular No.17/2019 dated 08.08.2019. This circular stipulates that appeals shall not be filed or pursued by the Department before the High Court if the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). The Revenue submitted that the tax effect in the present appeal was less than this threshold limit. Consequently, the High Court, in light of the submission regarding the tax effect being below the monetary limit, dismissed the appeal as withdrawn. The court explicitly stated that the substantial questions of law are kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 19.12.2019 passed by the Income Tax Appellate Tribunal (ITAT), 'B' Bench, Chennai. The appeal pertained to assessment year 2012-13 and concerned the deletion of additions made by the Assessing Officer to the income of the respondent, The George Town Co-operative Bank Ltd. The dispute revolved around the applicability of certain provisions of Section 194A of the Income Tax Act concerning tax deduction on interest payments made by the co-operative bank.

What were the issues?

The Tribunal was asked to decide the following substantial questions of law: 1. Whether the Tribunal was correct in deleting the additions made by the Assessing Officer under Section 194A(3)(i)(b), which applies to a co-operative society engaged in the business of banking. 2. Whether the Tribunal's reasoning was flawed by applying the general provision of Section 194A(3)(v) to co-operative societies, overlooking the specific provision of Section 194A(3)(i)(b) applicable to co-operative societies engaged in banking. 3. Whether the Tribunal ought to have applied CBDT Circular No.19/2015 dated 27.11.2015, which states that co-operative banks are required to deduct tax on interest payments on time deposits. The Revenue contended that Section 194A(3)(i)(b) is the specific provision applicable to co-operative banks, and the Tribunal erred in applying the general provision Section 194A(3)(v). The Revenue also relied on CBDT Circular No.19/2015. The judgment does not record specific arguments from the respondent (assessee).

Which sections of the Income-tax Act were involved?

Section 194A,Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.393 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 24.08.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.393 of 2020 The Commissioner of Income Tax, Chennai. ... Appellant Versus The George Town Co-operative Bank Ltd., No.2/62, Natesan Building, Krishnappa Agragaram Street, George Town, Chennai - 600 079 ... Respondent (PAN No.AAAAT 2451K) Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, “B” Bench, Chennai dated 19.12.2019 in I.T.A.No.2856/Chny/2016. For Appellant : Mr.T.Ravi Kumar Senior Standing Counsel For Respondent : Mr.G.Baskar Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.393 of 2020 J U D G M E N T (Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 19.12.2019 passed by the Income Tax Appellate Tribunal, 'B' Bench, Chennai in I.T.A.No.2856/Chny/2016, relating to the assessment year 2012-13, by raising the following substantial questions of law:- "(i) whether on the facts and in the circumstances of the case, the Tribunal was right in deleting the additions made by the Assessing Officer as per Section 194A(3)(i)(b) which applies to a cooperative society engaged in the business of banking? (ii) Is not the reasoning and findings of the Tribunal bad, by applying the provisions of Section 194A(3)(v) which is a general provision applicable to Cooperative Societies over looking Section 194(3)(i)(b) which is a specific provisions applicable to coopeartive society engaged in the business of baking? (iii) Whether the Tribunal ought to have applied the CBDT Circular No.19/2015 dated 27.11.2015 wherein it has stated that the cooperative bank are required to deduct tax on payment of interest on time deposits?" 2. When the matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.393 of 2020 wherein, it is stipulated that appeal shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit. 3. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs. (R.M.D., J.) (M.S.Q., J.) 24.08.2022 r n s

Internet : Yes.

Index : Yes / No. Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.393 of 2020 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. r n s To 1. The Income Tax Appellate Tribunal Madras 'B' Bench, Chennai. 2. The Commissioner of Income Tax, (Appeals) - 5, 121, Mahatma Gandhi Road, Nungambakkam, Chennai. 3. The Assistant Commissioner of Income Tax, Non Corporate Circle-6, Chennai. T.C.A.No.393 of 2020 24.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

More judgments on Section 194A

All 1,500 judgments and leading authorities on Section 194A →

Recent GST High Court judgments

Search GST case law →