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Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI L.P. SAHU
This is an appeal filed by the revenue against the order passed by the Ld. CIT(A)-1, Gurgaon dated 29.6.2017 for the assessment year 2014-14 on the following grounds of appeal :-
“1.The Ld. CIT(A) erred in law and facts by ignoring the fact that though appellant is cooperative society, it is engaged in the business of banking and therefore not exempt u/s 194 (3)(v) and thus the Ld. CIT(A), Gurgaon has erred in deleting the demand raised on account of non deduction of TDS of Rs. 32,16,048/-.
The Ld. CIT(A), Gurgaon has erred by relying on the memorandum to finance bill 2015, for the clarification on the meaning of co-operative societies, whereas the default relates to F.Y. 2013-14.” 2. The brief facts of the case are that the TDS inspection was conducted on 7.11.2013 at the head office of the Gurgaon Central Coop. Bank Gurgaon by DCIT, TDS Circle, Gurgaon when it was noticed that the assessee had not deducted TDS of various branches u/s 194A of the Income Tax Act against the interest paid on term deposits purchased which was required to be made in view of the division Bench Decision of ITAT. Therefore show cause notice was issued u/s 201/201(1A) for filing of the ledgers of all expenses debited for financial year 2013-14 alongwith evidences of TDS made thereon. But none attended nor any reply received from the assessee. On 15.1.2016 the AR of the assessee attended and filed the details of the interest paid less than Rs. 10,000/- by the assessee as well as details of expenses and interest paid of more than Rs. 10,000/-. The total interest was paid by the assessee to the tune of Rs. 3,78,77,380/- out of which Rs. 2,48,34,612/- was paid to the Primary Agricultural Credit Societies (PACS) whereupon no TDS was deducted. The show cause notice was issued to the assessee in this regard. It was noticed by the AO that assessee failed to deduct TDS on the payment made to PACS. Ld. AO observed that the assessee failed to comply the provisions of section 194A(1) of Income Tax Act and is also liable as person in default u/s 201(1) of the I.T. Act on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted, the details of which are as under :-
NAME OF AMOUNT MONTH IN AMOUNT OF AMOUNT DELAY IN Interest THE WHICH INT. TDS TO BE OF TDS MONTHS DEDUCTED (TILL Feb, OF PAID PAID u/s @10% u/s 2016) DEPOSITOR 194A INTEREST 201(1A)@ PACS, 2069551 APR, 2013 206955 Nil 35 72434 Nawada PACS, 2069551 MAY, 2013 206955 Nil 34 70364 Nawada PACS, 2069551 JUNE, 2013 206955 Nil 33 68294 Nawada PACS, 2069551 JULY, 2013 206955 Nil 32 66224 Nawada PACS, 2069551 AUG,2013 206955 Nil 31 64154 Nawada PACS, 2069551 SEP, 2013 206955 Nil 30 62084 Nawada PACS, 2069551 OCT, 2013 206955 Nil 29 60014 Nawada PACS, 2069551 NOV, 2013 206955 Nil 28 57944 Nawada PACS, 2069551 DEC, 2013 206955 Nil 27 55874 Nawada PACS, 2069551 JAN, 2014 206955 Nil 26 53804 Nawada PACS, 2069551 FEB, 2014 206955 Nil 25 51734 Nawada PACS, 2069551 MAR, 2014 206955 Nil 24 49664 Nawada TOTAL 24834612 2483460 732588
Accordingly Ld. AO made additions as under :-
U/s 201 (1) : Rs. 24,83,460/- U/s 201(1A) : Rs. 7,32,588/- ________________ Total : Rs. 32,16,048/-
Aggrieved from the above order of the AO, assessee filed appeal before the Ld. CIT(A) Gurgaon. Before the Ld. CIT(A) he field detailed written synopsis and the Ld. CIT(A) after considering all the submissions and case laws cited by the assessee allowed the appeal of the assessee. Feeling aggrieved by the order of the Ld. CIT(A) revenue is in appeal before the ITAT.
Ld. DR relied upon the order of the AO and submitted that the assessee failed to deduct TDS as per section 194A(1) which was required to be deducted. Therefore AO has rightly treated the assessee in default for non deduction of TDS.
On the other hand Ld. Authorised Representative reiterated the submissions made before the Ld. CIT(A) and submitted that Ld. CIT(A) has rightly allowed the appeal of the assessee. He also submitted that the case is covered in favour of the assessee by the decision in his own case in and ITA No. 6708/Del/2015 for the assessment year 2012-13 of the coordinate bench of the Tribunal which is placed on paper book.
After hearing both the parties and perusing the entire material available on record, we find that the case of the assessee is covered in his favour by the decision in his own case of the coordinate bench (supra), whereby the appeal of the Revenue stands dismissed observing as under :
“7. We have heard both the parties and perused the records. Apropos ground no. 1 relating to issue whether the provisions of section 194A(3)(v) apply to cooperative society involved in the business of banking is concerned, we find that this issue is squarely covered by the decision of the ITAT, Delhi passed in for AY 2012-13 in the case of Almora Urban Cooperative Bank Ltd. vs. ITO(TDS), Kashipur, wherein it was held that the provisions of section give blanket exemption to the interest paid by any cooperative society to its members and that neither section 2(19) nor section 194A(3)(v) claims any 4 discrimination between the cooperative societies carrying on banking business and other cooperative societies. Therefore, the Ld. CIT(A) has rightly followed the aforesaid decision and deleted the demand in dispute, which does not need any interference on our part, hence, we uphold the same and reject the ground no. 1 raised by the Revenue.”
Respectfully following the above decision of co-ordinate Bench, we do not find any justification to interfere with the order of ld. CIT(A). Accordingly, the appeal of the Revenue deserves to be dismissed being devoid of merits.