G.VENKATESWARAN INCOMETAX OFFICER TDS WARD MADURAI, MADURAI vs. M/S MADURAI DISTRICT CENTRAL CO-OP BANK LTD MADURAI, MADURAI

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.

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?

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.”

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.

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.

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.

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.

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.

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.