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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI V. DURGA RAO & SHRI G. MANJUNATHA
Consolidated Appeals (17)
आयकर अपील�य अ�धकरण, ‘सी ’ �याय पीठ,चे�नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ BENCH, CHENNAI �ी वी. दुगा� राव, �या�यक सद�य एवं �ी जी . मंजुनाथ, लेखा सद�य के सम$ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER
S.No ITA No. Asst.Year Appellant Respondent 1. 2020-21 The Income Tax M/s. Madurai District Central Co- 451/Chny/2022 Officer, operative Bank Ltd. Head Office Branch, TDS Ward, Madurai. 186, MDCC Building, North Veli Street, Opp. Head Post Office Madurai-625 001. PAN: AADFT 2450 TAN : MRIT00069G 2. 452/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Virudhunagar Main Road Madurai. Kalligudi Branch.PIN-625 701 Tirumangalam Taluk TAN: CHET14857D 3. The Income Tax M/s. Madurai District Central Co- 453/Chny/2022 2020-21 Officer, operative Bank Ltd. TDS Ward, Elumalai Branch Madurai. Parasakthi Mahal, Near Pettai Kaliamman Kovil.Main Bazaar,Elumalai PIN : 625 535 TAN: CHET 14858E 4. 454/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Uthamapalayam Branch Madurai. South Ratha Vidhi, Uthamapalayam,Theni PIN : 625 533 TAN: MRIM02723A 5. 2020-21 The Income Tax M/s. Madurai District Central Co- 455/Chny/2022 Officer, operative Bank Ltd. TDS Ward, Palanganatham Branch Madurai. 35, Madakulam Main Road Madurai-625 003 TAN: MRIT 00380C 6. 456/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Nagamalai Pudukottai Branch Madurai. Alwarnagar, Nagamalai Pudukottai, Madurai-625 019 TAN: MRIT 00383F 7. The Income Tax M/s. Madurai District Central Co- 457/Chny/2022 2020-21 Officer, operative Bank Ltd. TDS Ward, Pudur Branch Madurai. 47,Alagarkovil Road Madurai-625 007. TAN: MRIT 00384G 8. 2020-21 The Income Tax M/s. Madurai District Central Co- 458/Chny/2022 Officer, operative Bank Ltd. TDS Ward, K.K.Nagar Branch Madurai. 19/9,80 Feet Road, KK Nagar, Madurai-625 007. TAN: MRIT 00427A 9. 459/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Madurai East Branch Madurai. SVS Street, Madurai-625 001. TAN: MRIT 00428B 10. 460/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co-
ITA Nos 451 to 484/Chny/2022
Officer, operative Bank Ltd. TDS Ward, Arapalayam Branch Madurai. A.A.Road,Gnanaolivupuram Madurai-625 010. TAN: MRIT 00426G 11. 461/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Villapuram Branch Madurai. Aruppukottai Road, Villapuram Madurai-625 001. TAN: MRIT 00430D 12. 462/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Thiruparankundram Branch Madurai. Thirunagar, New Building, Poonga Street, Madurai-625 006. TAN: MRIT 00431E 13. 2020-21 The Income Tax M/s. Madurai District Central Co- 463/Chny/2022 Officer, operative Bank Ltd. TDS Ward, Krishnapuram Colony Branch Madurai. 20, Krishnapuram Colony , 2nd Street, Madurai-625 014. TAN: MRIT 01291D 14. 464/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Otthakadai Branch Madurai. Melur Road, Otthakadai Madurai-625 106 TAN: MRIT 02544D 15. The Income Tax M/s. Madurai District Central Co- 465/Chny/2022 2020-21 Officer, operative Bank Ltd. TDS Ward, IyerBangalow Branch Madurai. 390/3,Srinivas, VOC Street Bank Colony,Narayanapuram Madurai-625 014. TAN: MRIT 03300D 16. 466/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Anna Nagar Branch Madurai. 580, Main Road, A.A. NAGAR Madurai-625 020. TAN: MRIT 00425F 17. 2020-21 The Income Tax M/s. Madurai District Central Co- 467/Chny/2022 Officer, operative Bank Ltd. TDS Ward, Bodinayakanur Branch Madurai. South Raja Street, Bodinayakanur,Theni. PIN- 625 513 TAN: MRIT 03322E 18. 468/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Aundipatti Branch Madurai. Theni Main, Jakkampatti, Aundipatti. PIN- 625 512 TAN: MRIT 03323F 19. 2020-21 The Income Tax M/s. Madurai District Central Co- 469/Chny/2022 Officer, operative Bank Ltd. TDS Ward, Thirumangamam Branch Madurai. Madurai Road, Thirumangalam PIN- 625 706 TAN: MRIT 03324G
ITA Nos 451 to 484/Chny/2022 20. 470/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Chinnamanur Branch Madurai. Old Municipality Road, Chinnamanur,Theni. PIN- 625 515 TAN: MRIT 03325A 21. The Income Tax M/s. Madurai District Central Co- 471/Chny/2022 2020-21 Officer, operative Bank Ltd. TDS Ward, Usilampatti Branch Madurai. Old Post Office Street, Usilampatti-625 532. TAN: MRIT 03327C 22. 2020-21 The Income Tax M/s. Madurai District Central Co- 472/Chny/2022 Officer, operative Bank Ltd. TDS Ward, T.Kallupatti Branch Madurai. T.Kallupatti, Peraiur, Madurai Dt. PIN: 625 702 . TAN: MRIT 03328D 23. 473/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Solavandan Branch Madurai. 4/12/13, Railway Feeder Road Sholavandan,Madurai PIN: 625 214. TAN: MRIT 03329E 24. The Income Tax M/s. Madurai District Central Co- 474/Chny/2022 2020-21 Officer, operative Bank Ltd. TDS Ward, Allinagaram Branch Madurai. Periyakulam Road, Near Gokila Hospital, Allinagaram, Madurai Dist. PIN: 625 531. TAN: MRIT 03330F 25. 475/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Peraiyur Branch Madurai. 8-1/59, Palace Road, Peraiyur, Madurai Dt. PIN : 625 703. TAN: MRIT 03331G 26. 2020-21 The Income Tax M/s. Madurai District Central Co- 476/Chny/2022 Officer, operative Bank Ltd. TDS Ward, Theni Branch Madurai. 287, Subban Chetti Street, Near Old Sri Ram Theatre, Theni-625 531. TAN: MRIT 03332A 27. 477/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Melur Branch Madurai. 71, Madurai Road, Melur, Madurai-625 109. TAN: MRIT 03333B 28. 2020-21 The Income Tax M/s. Madurai District Central Co- 478/Chny/2022 Officer, operative Bank Ltd. TDS Ward, NCS Mill Branch Madurai. (Alanganallur) 15B, Metthupatti, Alanganallur, Madurai-625 502. TAN: MRIT 03335D 29. 479/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Myladumparai Branch Madurai.
ITA Nos 451 to 484/Chny/2022 Main Road, Myladumparai, Aundipatti, Theni-625 579. TAN: MRIT 03336E 30. 480/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Vadipatti Branch Madurai. 7-2-7/1B, Madurai Road, Vadipatti, Madurai-625 218. TAN: MRIT 03338G` 31. The Income Tax M/s. Madurai District Central Co- 481/Chny/2022 2020-21 Officer, operative Bank Ltd. TDS Ward, Cumbum Branch Madurai. Near Apollo Medicals, Ambethkar Street, Cumbum, Theni-625 516. TAN: MRIT 03339A 32. 482/Chny/2022 2020-21 The Income Tax M/s. Madurai District Central Co- Officer, operative Bank Ltd. TDS Ward, Periyakulam Branch Madurai. Near Agraharam Street, Thenkarai, Periyakulam, Theni-625 601. TAN: MRIT 03340B 33. The Income Tax M/s. Madurai District Central Co- 483/Chny/2022 2020-21 Officer, operative Bank Ltd. TDS Ward, Kottampatti Branch Madurai. Trichy-Madurai Road, Kottampatti-625 103. TAN: MRIT 03341C 34. The Income Tax M/s. Madurai District Central Co- 484/Chny/2022 2020-21 Officer, operative Bank Ltd. TDS Ward, Keelayur Branch Madurai. 4/449, Melur to Thirupathur Road, Melur Taluk. Madurai DT PIN: 625 102. TAN: MRIT 04038G
अपीलाथ�क�ओरसे/ Appellant by : Mr. P.Sajit Kumar, JCIT : Mr. K.Ravi, Advocate & ��यथ�क�ओरसे/Respondent by Mr.S.Sundar, C.A
: 22.06.2022 सुनवाईक�तार�ख/Date of hearing : 29.06.2022 घोषणाक�तार�ख /Date of Pronouncement आदेश / O R D E R PER BENCH:
This bunch of 34 appeals filed by the Revenue are
directed against separate, but identical orders of the
Commissioner of Income Tax (Appeals), National Faceless
Appeal Centre (NFAC), Delhi, dated 30.03.2022 / 25.03.2022
ITA Nos 451 to 484/Chny/2022 /24.03.2022 and pertain to assessment year 2020-21. Since,
facts are identical and issues are common, for the sake of
convenience, these appeals are heard together and are being
disposed off, by this consolidated order.
The Revenue has raised common grounds of appeal
for the assessment year 2020-21, which reads as under:-
“1. Whether the Commissioner of lncome Tax (Appeals), NFAC was right in holding that the Primary Co-operative Societies that disbursed the Pongal cash gift on behalf of the Government of Tamil Nadu are Business Correspondents of the Petitioners Bank?
Whether provisions of the section 194N of the Income Tax Act, 1961 are applicable only if the cash withdrawals from the bank accounts are in the nature of income in the hands of the account holders?
Whether the CIT(A) has erred in not appreciating that the Deductor is under legal obligation to effect TDS in terms of the provisions introduced by the Legislature and that has not been held as ultravires yet. 4.Whether the CIT(A) has erred in not appreciating the fact that the deductor cannot decide the taxability of the amount to be distributed to the Payees. 5. Whether the CIT(A) erred in not appreciating Section 198 Specifically declaring that the amount to be deducted in terms of Section 194N of the IT Act would not be included as income in the hands of the assessee
Whether the CIT(A) has failed to appreciate that the nature of transaction as Contemplated u/s. 194N ; relevant especially when the provisions are explicit and clear. 7. Whether the conclusion of the CITA) that the primary co- operative societies are business correspondents is right especially inasmuch as the decision of the Hon'ble High Court of Madras in the case of Tirunelveli District Central Cooperative Bank has been stayed by the Division Bench of the Hon’ble High Court (Madurai
ITA Nos 451 to 484/Chny/2022 Bench) vide order in WA(MD) NO. I137 of 2020 and CMP (MD) No. 6226 of 2020 dated 17-12-2020.”
We have heard both the parties, perused materials
available on record and gone through orders of the authorities
below. When these appeals were taken up for hearing, the
learned Sr. AR appeared for the Revenue strongly opposed
out of turn listing of appeals for hearing in light of provisions
of section 253(4) of the Income Tax Act, 1961, and argued that
when the appellant/Department filed appeals, the Registry of
the Tribunal is bound to give minimum thirty days time from
date of receipt of memorandum of appeal to enable other party
to file cross objection, if any. In this case, appeals have been
filed by the Revenue on 30.05.2022 and considering
minimum timeline of five working days for service, the
Respondent in these cases would not have received appeal
memorandum not before 06.06.2022. Therefore, considering
the timeline, cases could not have been posted for hearing any
day prior to 06.07.2022 and thus, argued that there is
procedural lapse, which needs to be corrected. The learned
Sr.AR for the Revenue further referring to CBDT Circular
No.3/2018 and clause 10(a) submitted that where
ITA Nos 451 to 484/Chny/2022 constitutional validity of the provisions of an Act or Rule is
under challenge, then the Department is mandated to contest
adverse orders passed by the CIT(A) before the Tribunal
irrespective of the tax effect involved in the cases. In these
cases, it was brought to our notice that the Respondent, M/s.
Madurai District Central Co-operative Bank Ltd., has filed a
Writ Petition, inter-alia, praying for Writ of Declaration before
the Hon’ble High Court of Madurai Bench to declare
provisions of section 194N of the Income Tax Act, 1961, as
illegal, arbitrary, infringes the fundamental rights under Article
14, 19(i)(g) along with Article 265 and 300A of the Constitution
of India, since there is challenge before the Hon’ble High
Court on constitutional validity of the provisions, appeals need
to be heard on merits, irrespective of tax effects. The learned
Sr.AR for the Revenue further referring to decision of the
Hon’ble Jurisdictional High Court of Madras in the case of
Tirunelveli District Central Co-operative Bank Ltd vs. JCIT in
W.P. No. 6102 of 2020 dated 27.07.2020 submitted that
Division Bench of the Hon’ble High Court of Madras (Madurai
Bench) have been reported to have been stayed operation of
Single Judge judgement in W.A(MD) No.1905 of 2020 and
ITA Nos 451 to 484/Chny/2022 thus, there is no valid and operational judgement on the merits
of the issue involved in all these appeals and thus, it cannot
be heard as covered matters. The learned Sr.AR therefore,
submitted that as per provisions of section 194N of the Act, the
Respondent/ assessee bank needs to deduct TDS on cash
withdrawals from their savings bank accounts. However, these
Respondents have not deducted TDS as per law, and hence,
the Assessing Officer has rightly computed short deduction of
TDS and consequent interest u/s.201(1) & 201(1A) of the
Income Tax Act, 1961, and their orders should be upheld.
The learned counsel for the Respondents submitted that
tax effect involved in all these appeals is less than monetary
limit prescribed by the CBDT for filing appeal before the
Tribunal in terms of Circular No.3/2018 and thus, these
appeals filed by the Revenue are not maintainable and need
to be dismissed.
We have heard both the sides and considered relevant
materials on record. After hearing both sides, we deem it fit to
answer first procedural issue raised by the learned Sr.AR
appeared for the Revenue. We find that although, provisions of
section 253(4) mandates 30 days time limit for filing cross
ITA Nos 451 to 484/Chny/2022 objection, if any, by the Respondents to appeals filed by any
party, but in this case, the Revenue cannot question listing of
appeals before the limitation period of 30 days, because the
Respondent/ assessees in all these appeals have made
statement at bar through their learned Authorized
Representative that they do not want to file any cross
objection, because they have got relief from the first appellate
authority. Further, it is wisdom of the Registry of the Tribunal to
list appeals out of turn, if it feels that issues can be disposed of
immediately and thus, we are of the considered view that
there is no merit in arguments advanced by the learned DR for
the Revenue and thus, same is rejected.
Having said so, let us come to second argument of the
learned Sr.AR for the Revenue in light of CBDT circular
No.3/2018 dated 11.07.2018 and more particularly, clause
10(a) of said circular, which provides for exception to monetary
limit fixed by CBDT for filing appeal. As per circular No.3/2018
dated 11.07.2018 of CBDT, clause 10(a) specifically provides
exception to monetary limits, in case constitutional validity of
any of the provisions is under challenge before Courts and in
such case, the Revenue needs to file appeal irrespective of
ITA Nos 451 to 484/Chny/2022 monetary limit involved in those appeals. In this case,
although, the learned Sr.AR for the Revenue brings to our
notice that Respondent/assessee has challenged constitutional
validity of provisions of section 194N of the Income Tax Act,
1961, before the Hon’ble High Court of Madras at Madurai
Bench, but the issue involved in all these appeals filed by the
Revenue is not on constitutional validity of provisions of section
194N of the Act, but short deduction of TDS computed by the
Assessing Officer u/s.194N of the Act. We further noted that
the learned first appellate authority has decided the issue on
merits, without going into examine constitutional validity of
provisions of section 194N of the Income Tax Act,1961 and
further, by following decision of the Hon’ble Jurisdictional High
Court of Madras in the case of Tirunelveli District Central Co-
operative Bank Ltd. Vs JCIT and held that the Assessing
Officer has erred in computing short deduction of TDS and
consequent interest u/s.201(1) & 201(1A) of the Income Tax
Act, 1961, in respect of cash withdrawal from savings bank
account of their branches and case of the assessee is covered
under proviso to section 194N of the Act, and thus, on those
cash withdrawals short deduction of TDS and consequent
ITA Nos 451 to 484/Chny/2022 interest cannot be computed. Further, the Revenue has
challenged findings of the first appellate authority before us on
the issue of short deduction of TDS and consequent interest,
but not constitutional validity of provisions of section 194N of
the Income Tax Act,1961. Therefore, we are of the considered
view that there will be a merit in the arguments of the learned
Sr.AR for the Revenue, in case, the first appellate authority
has allowed relief to the Respondent/assessee on the issue
of constitutional validity of provisions of section 194N of the
Income Tax Act,1961. However, in this case, the issue has
been decided on merits and thus, we are of the considered
view that there is no merit in arguments advanced by the
learned Sr.AR for the Revenue in light of clause 10(a) of
CBDT Circular No.3/2018 dated 11.07.2018 and hence, same
is rejected.
Having said so, let us examine whether monetary limit
involved in these appeals is below prescribed limit fixed by the
CBDT for filing appeals before the Tribunal. We find that in
all these appeals tax effect involved is below monetary limit
of Rs.50 lakhs prescribed by the CBDT for filing appeal by the
Revenue before the Tribunal, which is evident from fact that
ITA Nos 451 to 484/Chny/2022 the learned Sr.AR for the Revenue has filed a chart, as per
which in all these cases tax effect is below prescribed limit.
Therefore, we are of the considered view that appeals filed by
the Revenue is covered under CBDT Circular No.3/18 without
any exception as provided under clause 10(a) of the said
circular and thus, appeals filed by the Revenue in all these
cases are not maintainable. Hence, in light of CBDT circular
No.3/2018 dated 11.07.2018, we dismiss appeals filed by the
Revenue as not maintainable. However, we keep open an
option to the Revenue to file Miscellaneous Application, if so
advised, in case, issue involved in these appeals comes under
exception as provided in the said circular and press for recall of
order.
In the result, appeals filed by the Revenue are
dismissed. Order pronounced in the open court on 29th June, 2022 Sd/- Sd/- (वी. दुगा� राव) (जी. मंजुनाथ) (V.Durga Rao) (G.Manjunatha) �या�यक सद�य /Judicial Member लेखा सद�य / Accountant Member चे!नई/Chennai, "दनांक/Dated 29th June, 2022 DS आदेशक��$त%ल&पअ'े&षत/Copy to: 3. आयकर आयु(त (अपील)/CIT(A) Appellant 2. Respondent 4. आयकरआयु(त/CIT 5. &वभागीय�$त$न-ध/DR 6. गाड0फाईल/GF.