THALAKKAD SERVICE COOPERATIVE SOCIETY BANK LIMITED,TIRUR vs. ITO, MALAPPURAM
Facts
The appellant, a co-operative society, failed to deduct TDS on contributions to the Kerala Co-Operative Employees Pension Board, considering it unrecognized. The TDS officer treated the appellant as an 'assessee in default' and demanded tax. An application for rectification was rejected as the Board was not approved under Part B of the Fourth Schedule of the Income Tax Act.
Held
The Tribunal held that the approval of the Board's income for exemption under section 10(23AAA) of the Income Tax Act does not equate to approval under Part B of the Fourth Schedule. Therefore, the contributions would be taxable as perquisites.
Key Issues
Whether the Kerala Co-Operative Employees Pension Board was approved under Part B of the Fourth Schedule to the Income Tax Act for the purpose of TDS deduction on contributions.
Sections Cited
154, 10(23AAA), 17(2), Part B of the Fourth Schedule
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI SONJOY SARMA, JM
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SONJOY SARMA, JM ITA No. 708/Coch/2024 Assessment Year: 2020-21 Thalakkad Service Co-op. Bank Ltd. .......... Appellant Service Bank Buuilding, Vengalur BP Angadi, Tirur, Malappuram 676102 [PAN: AADAT4570A] vs. The Income Tax Officer - TDS, Tirur .......... Respondent Appellant by: Shri M. Ramkumar Menon, CA Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 11.06.2025 Date of Pronouncement: 31.07.2025
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 16.06.2024 for Assessment Year (AY) 2020-21.
Brief facts of the case are that is a co-operative society registered under the Kerala State Co-operative Societies Act, 1969. It is classified as a primary agricultural credit co-operative society. The Income Tax Officer-TDS, Tirur, on verification of the TDS returns submitted by the appellant society found that the appellant
2 ITA No. 708/Coch/2024 Thalakkad Service Co-op. Bank Ltd. society had failed to deduct tax at source in respect of contribution made by the appellant to superannuation fund to the Kerala Co- Operative Employees Pension Board as the same was not recognised or approved fund under the Fourth Schedule to the Income Tax Act. Accordingly, the TDS Officer held that the assessee is an ‘assessee in default’ and demanded tax of Rs. 4,81,059/- vide order dated 13.07.2023 for AY 2020-21. Subsequently, on receipt of the said order an application u/s. 154 of the Act was filed before the TDS Officer seeking rectification of the order by stating that Kerala State Co-operative Employees Pension Board has been approved u/s. 10(23AAA) vide ITBA/ASK/F/73/2022-23/1049830641(1) vide order dated 16.02.2023. However, the said application was rejected by the TDS Officer by holding that approval was not granted under Part B of the Fourth Schedule of the Income Tax Act. Therefore, the contribution made by the appellant society would be taxable as perquisites in the hands of the employees u/s. 17(2) of the Act. Accordingly, dismissed the application vide order dated 21.09.2023.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
We have heard the rival contentions and perused the material available on record. Admittedly the Kerala State Co-operative
3 ITA No. 708/Coch/2024 Thalakkad Service Co-op. Bank Ltd. Employees Pension Board was not approved under Part B of Fourth Schedule of Income Tax Act. The mere fact that the income of the said Board was approved for exemption u/s. 10(23AAA) of the Act does not tantamount to approval as defined u/s. 2(vi) of the Act. Therefore, we do not find any merit in the appeal filed by the assessee.
In the result, the appeal filed by the assessee stands dismissed.
Order pronounced in the open court on 31st July, 2025.
Sd/ Sd/- (SONJOY SARMA) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Cochin, Dated: 31st July, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order
Assistant Registrar ITAT, Cochin
