Appeal details
Counselvise Citation
[2018] 123 COUNSELVISE.COM (IT) 3793 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
02-05-2018
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
E
Assessment Year
2014-2015
Appeal Filed On
01-05-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.4885/DEL/2016 ASSESSMENT YEAR: 2014-15 ITO (TDS), GHAZIABAD. V. MAHAMEDHA URBAN CO- OPERATIVE BANK LTD., 36, NAI BASTI, GHAZIABAD. TAN/PAN: AAAAM 4437E (APPELLANT) (RESPONDENT) CO NO.95/DEL/2018 ASSESSMENT YEAR: 2014-15 MAHAMEDHA URBAN CO- OPERATIVE BANK LTD., 36, NAI BASTI, GHAZIABAD. V. ACIT, GHAZIABAD. TAN/PAN: AAAAM 4437E (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI RAM KUMAR DHIMAN, CA DATE OF HEARING: 02 05 2018 DATE OF PRONOUNCEMENT: 02 05 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE AGAINST THE IMPUGNED OR DER DATED 13.06.2016 PASSED BY CIT (APPEALS), GHAZIABAD IN RE LATION TO THE ORDER PASSED U/S.201(1)/201(1A) FOR THE ASSESSMENT Y EAR 2014-15 ON FOLLOWING GROUNDS OF APPEAL. I.T.A. NO.4885/DEL/2016 & CO NO.95/DEL/2016 2 1. THAT THE LIABILITY OF TDS ON INTEREST PAID BY CO-OP ERATIVE BANKS IS CLEARLY SPECIFIED IN SUB CLAUSE (B) OF CLA USE (I) OF SECTION 194A (3). AMBIGUITY APPEAR TO HAVE BEEN CREATED BY SUBSEQUENT PROVISIONS OF SUB CLAUSE (V) OF SECTION 194A(3) WHI CH READS AS UNDER:- TO SUCH INCOME CREDITED OR PAID BY A CO-OPERATIVE SOCIETY {TO A MEMBER THEREOF OR} TO ANY OTHER CO-OPERATIVE SOCIETY 2. THAT ABOVE CONTRADICTION HAS BEEN SETTLED WITH THE AMENDMENT TO SECTION 194A(3) W.E.F. 01-06-2015 WHIC H SPECIFICALLY EXCLUDES CO-OPERATIVE BANKS FROM THE EXEMPTION PROV IDED TO CO- OPERATIVE SOCIETIES. 3. THAT NOTWITHSTANDING THE ABOVE, EVEN PRIOR TO AMEN DMENT THE CO-OPERATIVE BANKS ARE CLEARLY LIABLE TO MAKE T DS ON INTEREST PAYMENTS EXCEEDING RS. 10,000/- MADE BY THEM IN VIE W OF SPECIFIC PROVISIONS OF SECTION 194A(3)(I)(B) IRRESPECTIVE OF THE FACT THAT THE DEDUCTEES IS A MEMBER OR NOT. THE LD. CIT (A) THERE FORE, ERRED IN LAW AND ON FACTS IN HOLDING THAT INTEREST PAYMENTS BY COOPERATIVE BANKS ARE NOT ELIGIBLE FOR TDS U/S 194A OF THE I.T. ACT. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A CO-OPERATIVE SOCIETY LICENSED BY RBI TO CARRY ON THE BUSINESS. T HE ASSESSING OFFICER NOTED THAT BANK HAD MADE PAYMENT ON INTEREST EXCEEDING RS.10,000/- WITHOUT DEDUCTING TA X AT SOURCE U/S.194A(3)(I)(B). SINCE ASSESSEE HAD FAILED TO DEDUCT TAX AT SOURCE, ASSESSING OFFICER TREATED ASSESSEE A S ASSESSEE IN DEFAULT IN RESPECT OF TAX OF RS.83,60,138/- U/S. 201(1) AND ALSO LEVIED INTEREST U/S.201(1A) OF RS.10,03,216/-. 4. LD. CIT (A) BY FOLLOWING THE DECISION OF THE TRIBUN AL I.T.A. NO.4885/DEL/2016 & CO NO.95/DEL/2016 3 ESPECIALLY IN THE CASE OF KASHIPUR URBAN CO-OPERATI VE BANK VS. ITO, ITA NO.5329/DEL/2013, DATED 14 TH NOVEMBER, 2014, DELETED THE DEMAND U/S. 201(1) AND CONSEQUENTLY THE INTEREST U/S. 201(1A). 5. ON BEHALF OF THE DEPARTMENT AN ADJOURNMENT APPLICATION WAS FILED HOWEVER NO ONE FROM THE DEPAR TMENT WAS PRESENT. SINCE, IT WAS PURELY A COVERED MATTER; THEREFORE, WE PROCEEDED TO DECIDE THE ISSUE EX PARTE QUA THE DEPARTMENT. 6. AFTER GOING THROUGH THE IMPUGNED ORDER, WE FIND THAT THE TRIBUNAL IN SEVERAL JUDGMENTS INCLUDING THAT OF KASHIPUR URBAN BANK LTD. (SUPRA) HAS HELD THAT INTEREST PAID TO ITS MEMBER ON TIME DEPOSITS, THERE WAS NO LIABILITY TO DEDUCT TDS U/S.194A. APART FROM THAT, WE FIND THAT HON'BLE BOM BAY HIGH COURT IN THE CASE OF JALGAON DISTRICT CENTRAL CO-OPERATIVE BANK LTD. AND ANOTHER VS. UNION OF INDIA & ORS, REP ORTED IN (2004) 265 ITR 423 (BOM) HELD THAT PAYMENT ON INTEREST ON TIME DEPOSITS MADE BY CO-OPERATIVE BANKING SOCIE TY IS SQUARELY COVERED UNDER THE EXEMPTION CLAUSE CONTAIN ED IN SECTION 194A(3)(V). THIS DECISION OF THE HON'BLE HI GH COURT HAS BEEN FOLLOWED IN MANY JUDGMENTS. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT (A) IN D ELETING THE DEMAND AND CONSEQUENTLY THE INTEREST. HENCE, THE AP PEAL IS DISMISSED. I.T.A. NO.4885/DEL/2016 & CO NO.95/DEL/2016 4 7. IN THE GROUNDS FOR CROSS OBJECTION, ASSESSEE HAS SUPPORTED THE ORDER OF THE LD. CIT (A) AND SINCE, W E HAVE CONFIRMED THE ORDER OF THE LD. CIT (A), THEREFORE, THE GROUNDS RAISED IN THE CROSS OBJECTION HAS BECOME PURELY INF RUCTUOUS. HENCE, CROSS OBJECTION IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AS WELL AS THE CROSS OBJECTION OF THE ASSESSEE IS DISM ISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND MAY, 2018. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 ND MAY, 2018 PKK:
