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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 175/JP/2017
PER SHRI KUL BHARAT, JM.
This Appeal by the Revenue is directed against the order of Ld. CIT (A)-I,
Jaipur dated 19.12.2016 pertaining to assessment year 2014-15.
The Revenue has raised the following grounds of appeal :-
.”1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 4,82,85,223/- made u/s 40(a)(ia) of the IT Act on account of interest paid by the assessee without making TDS thereon. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that interest paid by the assessee is governed by clause (v) of Sub-Section (3) of section 194A of the Act and not by sub-clause (b) of clause (i) of subsection (3) of section 194A of the Act. 3. The appellant craves its right to add, amend or alter any of the grounds on or before the hearing.”
2 ITA No. 175/JP/2017. M/s Malviya Urban Co-operative Bank, Ltd., Jaipur.
Briefly stated the facts are the case of the assessee was picked up for
scrutiny assessment and assessment u/s 143 of the Income Tax Act, 1961
(hereinafter referred to as the Act). While framing the assessment the Assessing
Officer Assessing Officer observed that the assessee had made payment of Rs.
70040830/- on account of interest other than interest on securities, whereas shown
only Rs. 5127604/- as liable for TDS deduction. The Assessing Officer proceeded to
make addition by making disallowance u/s 40(ia), for non-deduction of Tax at
source.
Aggrieved by this, the assessee preferred an appeal before Ld. CIT(A), who
after considering submission deleted the disallowance. Ld. Departmental
Representatives vehemently argued that Ld. CIT(A) was not justified in deleting the
disallowance. He submitted that the Assessing Officer had rightly made
disallowance.
On the contrary, the Ld. Counsel for the assessee reiterated the submissions
as made in the written submissions. Ld. Counsel for the assessee submitted that the
issue deductibility of tax has been decided by the Hon. Karnataka High Court
rendered in the case of CIT, TDS, Banglore Vs National Co-operative Bank Ltd.
(2016) 71 taxmann.com 352 (Karnataka) and reliance is also placed upon the
decision of the Hon’ble Madras High Court rendered in the case of Coimbatore
District Central Co-operative Bank Ltd. Vs. ITO, TDS-Ward I(5), Coimbatore. The
Ld. Counsel for the asseessee placed reliance on other judgment of the Hon’ble
Karnataka High Court rendered in the case of Commissioner of Income Tax Vs. Shri
Basaveshwara Sahakari Bank (2016) 74 taxmann.com 21 (Karnataka) and the other
3 ITA No. 175/JP/2017. M/s Malviya Urban Co-operative Bank, Ltd., Jaipur.
decisions of the Co-ordinate Bench rendered in the case of Bagalkot District Central
Co-operative Bank Ltd. Vs. Joint Commissioner of Income Tax, ITA No.
1572(Bang)2013. The decision of the Co-ordinate Bench in the case of ACIT, Circle-
1(1), Visakhapatnam Vs. Visakhapatnam Co-operative Bank Ltd ITA No. 5 & 9
(Vizag.) 2011.
We have heard the rival contentions, perused the material available on record
and gone through; the Judicial pronouncement has relied by the Ld. Counsel for the
assessee. The Hon’ble Karnataka High Court under the identical facts in the case of
Commissioner of Income Tax, Bangalore Vs. National Co-operative Bank Ltd. (Supra)
has held as under:-
“3. The aforesaid shows that the Tribunal was bound by its earlier decision in case of Bagalkot District Central Co-op. Bank v. Jt. CIT [2014] 48 taxmann.com 117 (Bang). When we further enquired from the learned counsel for the Revenue as to whether the decision of the Tribunal was carried by the Department before this Court or not and in response thereto, the learned counsel for the appellants has brought to our notice the decision of this Court dated 16.12.2015 in ITA 100116/2014 whereby, the view taken by the Tribunal has not been interfered with. We may record that this Court in the above referred decision observed thus: 'In this appeal by the Revenue, the issued involved is for consideration whether the Co-operative Bank was required to deduct tax while paying interest to its members on time-deposits under Section 194-A of the Income-Tax Act. 2. The Ministry of Finance, Government of India vide Circular No. 19/2015 in F. No. 142/14/2015-TPL, has held that the Co-operative Banks are not required to deduct tax at source on time deposits of its members paid or credited on or before 01.07.2015. The relevant portion of the circular reads as under: "42.5. In view of this, the provisions of the section 194A(3) (v) of the Income- tax Act have been amended so as to expressly provide that the exemption provided from deduction of tax from payment of interest to members by a co- operative society under section 194 A (3)(v) of the Income-Tax Act shall not apply to the payment of interest on time-deposits by the co-operative banks to its members. As this amendment is effective from the prospective date of
4 ITA No. 175/JP/2017. M/s Malviya Urban Co-operative Bank, Ltd., Jaipur.
1st June, 2015, the co-operative bank shall be required to deduct tax from the payment of interest on time deposits of its members, on or after the 1st June, 2015. Hence, a co-operative bank was not required to deduct tax from the payment of interest on time deposits of its members paid or credited before 1st June 2015" 3. In view of the aforesaid circular, this appeal does not survive for consideration and is accordingly dismissed. No costs.’
As such, in view of the referred decision of this Court in case of Bagalkot District Central Co-op. Bank (Supra) referred when the question is already covered by the decision of this Court, it cannot be said that any substantial question of law would arise for consideration.
However, the learned counsel appearing for the appellants-Revenue made an attempt to content and reiterate the same contention that in view of special provision section 194a(3)(b), the general exemption as provided under 194A(3)(v), would not be applicable for the Co-operative Banks and he contended that the view taken by the Tribunal cannot be said as correct view and this court may independently consider the matter and may hold that in view of specific provision, general exemption would not be available to co-operative bank. Hence the TDS from the interest exceeding the amount of Rs. 10,000/- was required to be deducted by the respondent-assessee in the present case which is a co-operative bank.
As such, we are not impressed by the submission that there is any specific provision and therefore general exemption would not apply for the simple reason that the word 'Members' is missing in clause (b). Further, in Circular No. 19/2015 dated 27.11.2015 at paragraph 42.5, it has been inter alia mentioned as under: "..................Hence, the Co-operative Bank was not required to deduct tax from the payment of interest on the time-deposits of its members paid or credited before first June 2015".”
5.1 In the light of the above judgment of the Hon’ble Karnataka High Court, we
do not see any merit into the contention of the Ld. Departmental Representatives.
Therefore, the ground raised in this appeal is dismissed.
In the result, appeal of the Revenue in ITA No. 175/JP/2017 is dismissed.
5 ITA No. 175/JP/2017. M/s Malviya Urban Co-operative Bank, Ltd., Jaipur.
Order pronounced in the open court on Monday, the 29th day of May 2017.
Sd/- Sd/- ( dqy Hkkjr) ¼foØe flag ;kno½ (VIKRAM SINGH YADAV) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member
Jaipur Dated:- 29 /05/2017. Pooja/
आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
The Appellant- The ACIT, Circle-6, Jaipur. 2. The Respondent- M/s Malviya Urban Co-operative Bank, Ltd., Jaipur. 3. The CIT(A). 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 175/JP/2017)
vkns'kkuqlkj@ By order,
सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत