M/s Chikmagalur Jilla Mahila Sahakara Bank Niyamitha , Chikkamangalur V. Assistant Commissioner of Income TAx Circle-1 , Hassan

ITA 1384/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7763 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 01-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law

Judgement Text

ITA.1384/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'C', BENGALURU BEFORE SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1384/BANG/2018) (ASSESSMENT YEAR : 2012-13) M/S. CHIKMAGALUR JILLA MAHILA SAHAKARA BANK NIYAMIT HA, NEAR SHANKARMUTT, BASAVANAHALLY MAIN ROAD, CHIKMAGALUR 577 101 .. APPELLANT PAN : AAAAC0785D V. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE - 1, HASSAN .. RESPONDENT ASSESSEE BY : SHRI. SANDEEP C, CA REVENUE BY : DR. P. V. PRADEEP KUMAR, ADDL. CIT HEARD ON : 20.06.2018 PRONOUNCED ON : .07.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE CIT (A), MYSURU, DT.28.02.2018, FOR THE ASSESSM ENT YEAR 2012- 13, ON THE FOLLOWING GROUNDS : 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN HOLDING THAT INTEREST ON DEPOSI TS PAID IN EXCESS OF RS.10,000/- TO ITS MEMBERS IS LIABLE FOR TAX DEDUCTION AT SOURCE U/S.194A OF THE ACT. ITA.1384/BANG/2018 PAGE - 2 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE AMENDMEN T MADE IN FINANCE ACT, 2015 WHICH CLARIFIES THAT THE CO-OPERA TIVE BANK IS LIABLE FOR MAKING TDS ON INTEREST EXCEEDING RS.10,0 00/- ON THE DEPOSITS MADE BY ITS MEMBERS ONLY FROM 01.06.2015. 02. BRIEF FACTS ARE, THE ASSESSEE IS A COOPERATIVE SOCIETY REGISTERED AS A COOPERATIVE BANK AND IS ALSO REGISTERED UNDER THE KARNATAKA COOPERATIVE SOCIETIES ACT, 1959 AND HAS OBTAINED LI CENCE FROM THE RBI TO CARRY OUT BANKING OPERATIONS AS A COOPERATIV E BANK. THE ASSESSEE FILED RETURN OF INCOME FOR AY 2012-13 DECL ARING TOTAL INCOME OF RS.59,86,750/-. HOWEVER CASE OF THE ASSE SSEE WAS SELECTED FOR SCRUTINY AND THE AO PASSED AN ASSESSME NT ORDER DETERMINING THE TOTAL INCOME AT RS.1,05,46,100/-. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). 03. ON APPEAL THE CIT (A) HAD DECIDED THE ISSUE AGA INST THE ASSESSEE WITH THE FOLLOWING ORDER : 3. THE APPELLANT IS AN AOP REGISTERED AS A CO-OPERA TIVE BANK CARRYING ON THE BUSINESS OF BANKING. FOR THE A.Y.20 12-13, THE APPELLANT FILED THE RETURN OF INCOME ON 23 / 09/2012, ADMITTING TOTAL INCOME OF RS.59,86,750 / -. ON SCRUT I NY, THE ASSESSING OFFICER ASSESSED THE INCOME OF THE APPELLANT AT RS,1,05,46, 100/- BY WAY OF AN ORDER U/S.143(3), DT.29/01/2015, WHICH IS DISPUTED IN THIS APPEAL. FOR THE APPELLATE HEARING, NONE APPEARED. A WRITTEN SUBMISSION, DT.13/02/2018 WAS M ADE ON BEHALF OF THE APPELLANT, BY THE AUTHORIZED REPRESEN TATIVE SHRI T.R. SHIV SHANKAR, CHARTERED ACCOUNTANT. THE WRITTEN SUB MISSION WAS TAKEN ON RECORD, AFTER ROUTING IT THROUGH THE R ECEIPT REGISTER. AFTER CONSIDERING THE FACTS OF THE APPELL ANT AS PER LAW, THE GROUNDS OF APPEAL ARE DECIDED ON MERITS, AS FOL LOWS: THE 1ST AND THE 4TH GROUNDS OF APPEAL ARE GENERAL IN NATURE AND THEREFORE, ARE NOT SEPARATELY ADJUDICATED. THE 2ND AND THE 3RD GROUNDS OF APPEAL WERE TAKEN TO STATE THAT THE ASSE SSING OFFICER ERRED IN LAW AND ON FACTS IN HOLDING THAT INTEREST ON DEPOSITS PAID BY THE APPELLANT IN EXCESS OF RS. 10,000/- TO ITS M EMBERS WERE ITA.1384/BANG/2018 PAGE - 3 LIABLE FOR TAX DEDUCTION AT SOURCE BECAUSE, THE APP ELLANT WAS EXEMPT FROM TDS AS PER THE PROVISIONS OF SEC.194A(3 )(V) OF THE ACT. IN THIS REGARD, IN RESPECT OF THE DISALLOW ANCE OF RS. 50,47,173/- MADE U/S.40(A)(IA) OF THE ACT, THE AUTH ORIZED REPRESENTATIVE SUBMITTED THAT THE DISALLOWANCE WAS NOT APPLICABLE TO THE APPELLANT WHICH IS A CO-OPERATIVE BANK. THIS ISSUE WAS CONSIDERED ON THE ADMITTED FACTS, AS PER LAW. SECTI ON 194A(3)(I)(B) OF THE ACT IS A PROVISION WHICH MANDA TES DEDUCTION OF TAX AT SOURCE BY A CO-OPERATIVE SOCIETY CARRYING ON THE BUSINESS OF BANKING, WHERE INTEREST PAID BY SUCH SO CIETY IS IN EXCESS OF TEN THOUSAND RUPEES. SECTION 194A(3)(V) O F THE ACT PROVIDES THAT TAX NEED NOT BE DEDUCTED AT SOURCE WH ERE THE INCOME IN THE FORM OF INTEREST IS CREDITED OR PAID BY A CO- OPERATIVE SOCIETY TO A MEMBER THEREOF OR TO ANY OTH ER CO- OPERATIVE SOCIETY. IN THE INSTANT APPEAL, THE ONUS WAS ON THE APPELLANT TO PROVE WITH CREDIBLE AND VERIFIABLE DOC UMENTARY EVIDENCE THAT THE EXPENDITURE INCURRED BY WAY OF IN TEREST OF RS. 50,47,173/- WHICH WAS CLAIMED TO HAVE BEEN PAID BY THE APPELLANT WAS EXEMPT AS PER THE PROVISIONS OF SECTI ON 194A(3)(V) OF THE ACT. AS NO FACTUAL EVIDENCE WAS ADDUCED TO S UPPORT THE APPELLANT'S CLAIM THAT THE AFORESAID INTEREST OF RS . 50,47,173/- WAS EXEMPT FROM DEDUCTION OF TAXES AT SOURCE, IT IS HELD THAT THE FAILURE OF THE APPELLANT TO DEDUCT TAXES AT SOU RCE FROM THE PAYMENT OF INTEREST OF RS. 50,47,173/- ATTRACTED TH E PROVISIONS OF SECTION 40(A)(IA) OF THE ACT FOR HAVING VIOLATED TH E PROVISIONS OF SECTION 194A(3)(I)(B) OF THE ACT. ACCORDINGLY, THE 2ND AND THE 3RD GROUNDS OF APPEAL ARE DISMISSED ON FACTS. THE 4 TH GROUND OF APPEAL WAS TAKEN TO STATE THAT THE ASSESSING OFF ICER ERRED IN NOT FOLLOWING THE DECISION OF THE HON. ITAT, BAN GALORE WHILE HOLDING THAT THE EXPRESSION COOPERATIVE SOCIE TY DID NOT INCLUDE A CO-O P ERATIVE BANK. IN THIS REGARD, THE DECISION OF THE HON. ITAT, BANGALORE BENCH 'A', BANGALORE RENDERED IN THE CASE OF THE BAGALKOT DISTRICT CENTRAL CO-OPERATIVE BANK VS. JCIT, BIJAPUR IN ITA NO. 1572/BANG/2013, DT.30/05/2014 FO R THE A.Y.200910, SPECIFICALLY MENTIONED AS FOLLOWS: 'WE MAY ADD THAT IN BOTH THESE DECISIONS THE DISCUSSION DID NOT TURN ON THE INTERPRETATION OF SEC. 194A(3)(I)(B) OF THE ACT VIS --VIS SEC. 194A(3)(V) OF THE ACT. IT IS THUS CLEAR THAT THE PR EPONDERANCE OF JUDICIAL OPINION ON THIS ISSUE IS THAT CO-OPERAT IVE SOCIETIES CARRYING ON BANKING BUSINESS WHEN IT PAYS INTEREST TO ITS MEMBERS ON DEPOSITS NEED NOT DEDUCT TAX AT SOURCE I N VIEW OF THE PROVISIONS OF SEC. 194A(3)(V) OF THE ACT'. AS THE D ECISION OF THE HON. IT AT, BANGALORE RENDERED IN THE CASE OF THE BAGALKOT ITA.1384/BANG/2018 PAGE - 4 DISTRICT CENTRAL COOPERATIVE BANK VS. JCIT, BIJAPUR CITED SUPRA AN D R ELIED ON BY THE APPELLANT DID NOT PRONOUNCE AN INTERPRETATION OF SEC. 194A(3)(I)(B) OF THE ACT, WI TH DUE RESPECT TO THE HON. ITAT, BANGALORE, IT IS HELD ON FACTS TH AT THE FAILURE OF THE APPELLANT TO DEDUCT TAXES AT SOURCE FROM THE PAYMENT OF INTEREST OF RS. 50,47,173 / - ATTRACTED THE PROVISIONS OF SECTION 40(A)( IA ) OF THE ACT FOR HAVING VIOLATED THE PROVISIONS OF SECTION 194A(3)(I)(B) OF THE ACT AND ACCORDINGLY, THE 4TH G ROUND OF APPEAL IS DISMISSED. 04. THE LD. AR BEFORE US HAS SUBMITTED THAT THE DEC ISION RELIED UPON BY THE CIT (A) IN THE MATTER OF THE BAGALKOT D ISTRICT CENTRAL CO-OPERATIVE BANK VS. JCIT, BIJAPUR IN ITA NO. 1572 /BANG/2013, DT.30/05/2014, HAD BEEN THE SUBJECT MATTER OF THE P ROCEEDINGS BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE HIGH COURT HAD DECIDED THE ISSUE AGAINST THE REVENUE. IN THIS REG ARD THE LD. AR HAD ALSO DRAWN OUR ATTENTION TO THE RECENT DECISION OF THE TRIBUNAL IN THE MATTER OF M/S. VASAVAMBA COOPERATIVE BANK LTD V . ACIT [ITA.1386/BANG/2018, DT.01.06.2018], WHEREIN THE JM HERE WAS THE AUTHOR, IN WHICH THE DECISION OF THE TRIBUNAL IN A CIT V. THE BELLARY DIST. COOPERATIVE CENTRAL BANK LTD [ITA.201 6/BANG/2016, DT.01.06.2018] AND THE JUDGMENT OF THE HONBLE JURI SDICTIONAL HIGH COURT IN CIT V. BIJAPUR DISTRICT CENTRAL COOPERATIV E BANK [(2018) 93 TAXMANN.COM 211], HAD ALLOWED THE APPEAL OF THE ASSESSEE. THE FINDING RECORDED BY THE COORDINATE BENCH IN PARA 6 OF THE ORDER IS REPRODUCED HEREUNDER : 06. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE COORDINATE BENCH IN A RECENT DECISION IN ACI T V. THE BELLARY DIST. CO-OPERATIVE CENTRAL BANK LTD [I.T.A NO.2016/BANG/2016, DT.01.06.2018] HAS CONSIDERED TH E JUDGMENTS CITED BY THE AO AS WELL AS BY THE ASSESSE E AND AFTER RELYING UPON THE JUDGMENT OF THE HONBLE JURISDICTI ONAL HIGH ITA.1384/BANG/2018 PAGE - 5 COURT IN PARA 6, WHICH IS REPRODUCED HEREIN BELOW, IN THE MATTER OF CIT V. BIJAPUR DISTRICT CENTRAL [(2018) 93 TAXMA NN.COM 211], HAD DISMISSED THE APPEAL OF THE REVENUE AND HELD IN FAVOUR OF THE ASSESSEE : 06. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE BEFORE THE AO HAD RELIED UPON THE DECISION OF THE TRIBUNAL IN THE BAGALKOT DISTRICT C ENTRAL CO- OP. BANK (SUPRA) AND IT WAS THE CASE OF THE AO THAT THE REVENUE IS IN APPEAL BEFORE THE HONBLE JURISDICTIO NAL HIGH COURT ON THE SAID MATTER. HOWEVER, WE NOTICE THAT THE APPEAL OF THE REVENUE IN THE MATTER OF THE BAGALKOT DISTRI CT CENTRAL CO-OP. BANK (SUPRA) WAS DECIDED BY THE DIVISION BEN CH VIDE ITS JUDGMENT DT.16.12.2015, WHICH WAS APTLY MENTION ED BY THE JURISDICTIONAL HIGH COURT IN THE MATTER OF SRI BASA VESWARA SAHAKARI BANK LTD (SUPRA) IN PARA 5, TO THE FOLLOWI NG EFFECT : 5. THE FIRST QUESTION IS ANSWERED AT PARA 2 AS FOLLOW S: '2. THE POINT IS SQUARELY COVERED BY A DIVIS ION BENCH JUDGMENT OF THIS COURT IN ITA NO. 100116/2014 BETWE EN THE COMMISSIONER OF INCOME TAX AND ANOTHER V. THE BAGAL KOT DISTRICT CENTRAL CO-OPERATIVE BANK DATED 16.12.2015 WHEREIN, WITH REFERENCE TO A CIRCULAR OF THE GOVERNMENT OF INDIA BEARING NO.19/2015 IN F.NO.142/14/2015 TPL, IT HAS BEEN HEL D AS FOLLOWS: '42.5 IN VIEW OF THIS, THE PROVISIONS OF THE SECTIO N 194(3)(V) OF THE INCOME-TAX ACT HAVE BEEN AMENDED SO AS TO EXPRESSLY PROVIDE THAT THE EXEMPTION PROVIDED FROM DEDUCTION OF TAX FROM P AYMENT OF INTEREST TO MEMBERS BY A CO-OPERATIVE SOCIETY UNDER SECTION 194A(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 DATED OF 1ST JUNE, 2015, THE CO-OPERATIVE BANK SHALL BE REQUIRED TO DEDUCT TAX FROM THE PAYMENT OF INTEREST ON TIME DEPOSITS OF IT S MEMBERS, ON OR AFTER THE 1ST JUNE, 2015. HENCE, A COOPERATIVE BANK WAS NOT REQUIRED TO DEDUCT TAX FROM THE PAYMENT OF INTEREST ON TIME DEPOSITS OF ITS MEMBERS PAID OR CREDITED BEFORE 1ST JUNE, 20 15.' IN VIEW OF THE ABOVE CIRCULAR, THE SAID SUBSTANTIAL QUESTION OF LAW DOES NOT SURVIVE FOR CONSIDERATION.' ITA.1384/BANG/2018 PAGE - 6 MOREOVER, THE DIVISION BENCH IN THE MATTER OF BIJAP UR DISTRICT CENTRAL (SUPRA) IN PARA 6 HAD HELD AS UNDER : 6. THIS COURT IN THE AFORESAID CASE OF KARNATAKA VIKAS GRAMEENA BANK HELD AS UNDER : '1. THE LEARNED COUNSEL FOR THE DEPARTMENT - REVENUE MR . Y.V.RAVIRAJ, SUBMITS THAT THE CONTROVERSY IS NO LON GER RES INTEGRA AND IS COVERED BY THE DECISION OF THE CO-OR DINATE BENCH I.E. THE COMMISSIONER OF INCOME TAX AND ANOTHER V. THE ILKAL CO-OPERATIVE BANK LTD., THE CO - ORDINATE BENCH IN THE SAID CASE HAS HELD AS BELOW: 'IN THIS APPEAL BY THE REVENUE, THE ISSUE INVOLVED IS FOR CONSIDERATION WHETHER THE CO-OPERATIVE BANK WAS REQ UIRED 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 C IRCULAR NO.19/2015 IN F.NO.142/14/2015-TPL, HAS HELD THAT T HE CO- OPERATIVE BANKS ARE NOT REQUIRED TO DEDUCT TAX AT SOURCE ON TIME DEPOSITS OF ITS MEMBERS PAID OR CRED ITED ON OR BEFORE 1.6.2015. THE RELEVANT PORTION OF THE CIR CULAR READS AS UNDER: '42.5 IN VIEW OF THIS, THE PROVISIONS OF THE SECTIO N 194A(3)(V) OF THE INCOME-TAX ACT HAVE BEEN AMENDED SO AS TO EXPRESSLY PROVIDE THAT THE EXEMPTION PROVIDED FR OM DEDUCTION OF TAX FROM PAYMENT OF INTEREST TO MEMBER S BY A CO- OPERATIVE SOCIETY UNDER SECTION 194A(3)(V) OF T HE INCOME-TAX ACT SHALL NOT APPLY TO THE PAYMENT OF IN TEREST ON TIME DEPOSITS BY THE CO-OPERATIVE BANKS TO ITS MEMB ERS. AS THIS AMENDMENT IS EFFECTIVE FROM THE PROSPECTIVE DA TE OF 1ST JUNE, 2015, THE CO-OPERATIVE BANK SHALL BE REQUIRED TO DEDUCT TAX FROM THE PAYMENT OF INTEREST ON TIME DEP OSITS OF ITS MEMBERS, ON OR AFTER THE 1ST JUNE, 2015. HENCE, A COOPERATIVE BANK WAS NOT REQUIRED TO DEDUCT TAX FRO M THE PAYMENT OF INTEREST ON TIME DEPOSITS OF ITS MEMBERS PAID OR CREDITED BEFORE 1ST JUNE, 2015.' IN VIEW OF THE AFORESAID CIRCULAR, THIS APPEAL DOES NOT SURVIVE FOR CONSIDERATION AND IS ACCORDINGLY DISMIS SED. NO COSTS. ITA.1384/BANG/2018 PAGE - 7 3. IN VIEW OF THE SAME, THE PRESENT APPEAL FILED BY RE VENUE IS ALSO DISPOSED OF, IN THE SAME TERMS.' FOLLOWING THE DECISION OF THE COORDINATE BENCH IN T HE MATTER OF THE BELLARY DIST. CO-OPERATIVE CENTRAL BANK LTD (SU PRA), WE FIND SUBSTANCE AND MERIT IN THE APPEAL OF THE ASSES SEE AND ACCORDINGLY GROUND NOS.2 AND 3 OF THE ASSESSEE ARE DECIDED IN FAVOUR OF THE ASSESSEE. THE AO IS DIRECTED TO ALLO W THE EXPENDITURE OF RS.1,09,16,354/-. 05. PER CONTRA THE LD. DR HAS DRAWN OUR ATTENTION T O THE ORDER PASSED BY THE AO WHERE THE VARIOUS PROVISIONS OF SE CTIONS 194A(3), AND MORE PARTICULARLY 194A(3)(I)(B), 194A( 3)(V), 194A(3)(VIIA) WERE REFERRED. ON THE BASIS OF THE A BOVE, IT WAS SUBMITTED THAT SECTION 194A(3)(I)(B) IS A SPECIFIC PROVISION AND THEREFORE THE BENEFIT OF SECTION 194A(3)(I)(V) BEIN G A GENERAL PROVISION CANNOT BE GRANTED AND FOR THAT PURPOSES T HE LD. DR HAD RELIED UPON THE DECISION OF THE PUNE BENCH OF THE T RIBUNAL IN THE MATTER OF BHAGANI NIVEDITA SAHAKARI BANK LTD V. ACI T [87 ITD 569] AS WELL AS THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE MATTER OF CTO V. BINANI CEMENTS LTD [CANO.336 OF 20 03, DT.19.02.104], WHEREBY IN PARAS 40 TO 44, IT WAS HE LD AS UNDER : 40. IN U.P. SEB V. HARI SHANKAR JAIN , (1978) 4 SCC 16, THIS COURT HAS CONCLUDED THAT IF SECTION 79(C) OF THE ELECTRICITY SUPPLY ACT GENERALLY PROVIDES FOR THE MAKING OF REGULATIONS PR OVIDING FOR THE CONDITIONS OF SERVICE OF THE EMPLOYEES OF THE BOARD , IT CAN ONLY BE REGARDED AS A GENERAL PROVISION WHICH MUST YIELD TO THE SPECIAL PROVISIONS OF THE INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT IN RESPECT OF MATTERS COVERED BY THE LATTER ACT, AND O BSERVED THAT: 9. THE REASON FOR THE RULE THAT A GENERAL PROVISIO N SHOULD YIELD TO A SPECIFIC PROVISION IS THIS: IN PASSING A SPECIAL ACT, PARLIAMENT DEVOTES ITS ENTIRE CONSIDERATION TO A PARTICULAR SU BJECT. WHEN A ITA.1384/BANG/2018 PAGE - 8 GENERAL ACT IS SUBSEQUENTLY PASSED, IT IS LOGICAL T O PRESUME THAT PARLIAMENT HAS NOT REPEALED OR MODIFIED THE FORMER SPECIAL ACT UNLESS IT APPEARS THAT THE SPECIAL ACT AGAIN RECEIVED CONSIDERATION FROM PARLIAMENT. VIDE LONDON AND BLAC KWALL RAILWAY V. LIMEHOUSE DISTRICT BOARD OF WORKS, AND T HORPE V. ADAMS. 41. IN GOBIND SUGAR MILLS LTD. V. STATE OF BIHAR , (1999) 7 SCC 76 THIS COURT HAS OBSERVED THAT WHILE DETERMINING THE QUESTION WHETHER A STATUTE IS A GENERAL OR A SPECIAL ONE, FO CUS MUST BE ON THE PRINCIPAL SUBJECT- MATTER COUPLED WITH A PARTICULAR PERSPECTIVE WITH REFERENCE TO THE INTENDMENT OF THE ACT. WITH THIS B ASIC PRINCIPLE IN MIND, THE PROVISIONS MUST BE EXAMINED TO FIND OUT W HETHER IT IS POSSIBLE TO CONSTRUE HARMONIOUSLY THE TWO PROVISION S. IF IT IS NOT POSSIBLE THEN AN EFFORT WILL HAVE TO BE MADE TO ASC ERTAIN WHETHER THE LEGISLATURE HAD INTENDED TO ACCORD A SPECIAL TR EATMENT VIS--VIS THE GENERAL ENTRIES AND A FURTHER ENDEAVOUR WILL HA VE TO BE MADE TO FIND OUT WHETHER THE SPECIFIC PROVISION EXCLUDES TH E APPLICABILITY OF THE GENERAL ONES. ONCE WE COME TO THE CONCLUSION TH AT INTENTION OF THE LEGISLATION IS TO EXCLUDE THE GENERAL PROVISION THEN THE RULE GENERAL PROVISION SHOULD YIELD TO SPECIAL PROVISIO N IS SQUARELY ATTRACTED. 42. HAVING NOTICED THE AFORESAID, IT COULD BE CONCL UDED THAT THE RULE OF STATUTORY CONSTRUCTION THAT THE SPECIFIC GO VERNS THE GENERAL IS NOT AN ABSOLUTE RULE BUT IS MERELY A STRONG INDI CATION OF STATUTORY MEANING THAT CAN BE OVERCOME BY TEXTUAL INDICATIONS THAT POINT IN THE OTHER DIRECTION. THIS RULE IS PARTICULARLY APPL ICABLE WHERE THE LEGISLATURE HAS ENACTED COMPREHENSIVE SCHEME AND HA S DELIBERATELY TARGETED SPECIFIC PROBLEMS WITH SPECIFIC SOLUTIONS. A SUBJECT SPECIFIC PROVISION RELATING TO A SPECIFIC, DEFINED AND DESCR IPTABLE SUBJECT IS REGARDED AS AN EXCEPTION TO AND WOULD PREVAIL OVER A GENERAL PROVISION RELATING TO A BROAD SUBJECT. 43. IN THE INSTANT CASE, THE ITEM 1E IS SUBJECT SPE CIFIC PROVISION INTRODUCED BY AN AMENDMENT IN 1996 TO THE SCHEME. T HE SAID AMENDMENT REMOVED NEW CEMENT INDUSTRIES FROM THE NON-ELIGIBLE ANNEXURE-B AND PLACED IT INTO ANNEXURE-C AMONGST TH E ELIGIBLE INDUSTRIES. IT CLASSIFIED THE CEMENT UNITS FOR ELIG IBILITY OF TAX EXEMPTION INTO THREE CATEGORIES: SMALL, MEDIUM AND LARGE. THE SAID CATEGORIES ARE COMPREHENSIVE WHEREBY SMALL AND MEDI UM CEMENT UNITS HAVE BEEN PRESCRIBED TO HAVE MAXIMUM FCIS OF RS.60/- LAKHS AND RS.5/- CRORES, RESPECTIVELY AND LARGE TO BE OVE R THE FCI OF ITA.1384/BANG/2018 PAGE - 9 RS.5/- CRORES. THE MAXIMUM CEILING FOR LARGE CEMENT UNITS HAS BEEN PURPOSEFULLY LEFT OPEN AND THEREBY REFLECTS THAT TH E INTENTION CLEARLY IS TO PROVIDE FOR AN ALL-INCLUSIVE PROVISION FOR NE W CEMENT UNITS SO AS TO AVOID ANY AMBIGUITY IN DETERMINATION OF APPRO PRIATE PROVISION FOR APPLICABILITY TO NEW CEMENT UNITS TO SEEK EXEMP TION. 44. IT LEAVES NO DOUBT THAT WHAT IS SPECIFIC HAS TO BE SEEN IN CONTRADISTINCTION WITH THE OTHER ITEMS/ENTRIES. THE PROVISION MORE SPECIFIC THAN THE OTHER ON THE SAME SUBJECT WOULD P REVAIL. HERE IT IS SUBJECT SPECIFIC ITEM AND THEREFORE AS AGAINST ITEM S 1, 4, 6 AND 7, WHICH DEAL WITH UNITS OF ALL INDUSTRIES AND NOT ONL Y CEMENT, ITEM 1E RESTRICTED TO ONLY CEMENT UNITS WOULD BE A SPECIFIC AND SPECIAL ENTRY AND THUS WOULD OVERRIDE THE GENERAL PROVISION. ON THE BASIS OF THE ABOVE, IT WAS SUBMITTED THAT SE CTION 194A(3)(I)(B) BEING A SPECIFIC PROVISION SHALL OVER RIDE THE GENERAL PROVISION AS MENTIONED IN 194A(3)(V). 06. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. FIRST OF ALL, WE SHALL FIRSTDEAL WITH THE ARGUMENT OF THE LD. DR WHETHER THE PROVISIONS OF SECTION 194A(3)(I)(B) OR 194A(3)(V) IS GENERAL OR A SPECIFIC PROVISION. THESE SECTIONS RE AD AS UNDER : SEC.194A: INTEREST OTHER THAN 'INTEREST ON SECURIT IES'. (1) ANY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY INCOME BY WAY OF INTEREST OTHER THAN INCOME BY WAY OF INTE REST ON SECURITIES, SHALL, AT THE TIME OF CREDIT OF SUCH IN COME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THER EOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT INCOME-TAX THEREON AT THE RATES IN FORCE : (2) .. (3) THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APP LY (I) WHERE THE AMOUNT OF SUCH INCOME OR, AS THE CASE MAY BE, THE AGGREGATE OF THE AMOUNTS OF SUCH INCOME CREDITED OR PAID OR ITA.1384/BANG/2018 PAGE - 10 LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE PERSON REFERRED TO IN SUB-SECTION (1) TO THE ACCOUN T OF, OR TO, THE PAYEE, DOES NOT EXCEED (A) TEN THOUSAND RUPEES, WHERE THE PAYER IS A BANKI NG COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 19 49) APPLIES (INCLUDING ANY BANK OR BANKING INSTITUTION, REFERRE D TO IN SECTION 51 OF THAT ACT); (B) TEN THOUSAND RUPEES, WHERE THE PAYER IS A CO-OP ERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANK ING; (C) TEN THOUSAND RUPEES, ON ANY DEPOSIT WITH POST O FFICE UNDER ANY SCHEME FRAMED BY THE CENTRAL GOVERNMENT AND NOT IFIED BY IT IN THIS BEHALF; AND (D) FIVE THOUSAND RUPEES IN ANY OTHER CASE: .. (II) TO (IV).. (V) TO SUCH INCOME CREDITED OR PAID BY A CO-OPERATI VE SOCIETY TO A MEMBER THEREOF OR TO ANY OTHER CO-OPERATIVE SOCIE TY; (VI) & (VII).. (VIIA) ................................ 07. THE PRESENT CASE BEFORE US PERTAINS TO THE PAYM ENTS MADE BY WAY OF INTEREST BY THE ASSESSEE SOCIETY TO ITS MEMB ERS WOULD ATTRACTS THE DEDUCTION OF TAX OR NOT. IN THIS REGARD, IF WE LOOK INTO THE LANGUAGE USED IN THE ABOVE PROVISIONS MORE PARTICUL ARLY 194A(3)(V), THEN IT IS CLEAR THAT THE CASE OF ASSE SSEE SHALL SQUARELY FALL WITHIN THIS PROVISION, BEING SPECIFIC PROVISIO N, IRRESPECTIVE WHETHER RS.10,000/- OR MORE IS PAID BY THE ASSESSEE TO ITS MEMBER OR NOT AND THEREFORE IN THE CONSIDERED OPINION OF T HE BENCH THE OTHER PROVISION RELIED UPON BY THE LD. DR I.E., 194A(3)(I )(B) SHALL NOT BE ITA.1384/BANG/2018 PAGE - 11 APPLICABLE BEING GENERAL IN NATURE. IT IS SETTLED PROPOSITION OF LAW THAT THE SPECIFIC PROVISION {I.E 194A(3)(V)} , SHAL L OVERRIDE THE GENERAL PROVISION, { I.E 194A(3)(I) (B)} , IN CASE OF OVER LAPPING OR CONFLICT , HENCE THE SECTION 194A(3)(V)} IS APPLIC ABLE TO THE FACTS OF THE PRESENT CASE . THEREFORE THE CONTENTION OF LD D R IS NOT CORRECT. FURTHER THE CASE IS ALSO COVERED IN FAVOUR OF ASSES SEE BY THE DECISION OF THE COORDINATE BENCH IN THE MATTER OF V ASAVAMBA COOPERATIVE BANK LTD (SUPRA), FURTHER THERE IS NO R EASON FOR THIS BENCH TO TAKE A CONTRARY VIEW, AS THE FACTS ARE SIM ILAR TO THE FACTS OF PRESENT CASE. FOLLOWING THE SAME WE ALLOW THE APPE AL OF THE ASSESSEE. 08. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DAY OF JULY, 2018. SD/- SD/- (INTURI RAMA RAO) (LALIET K UMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : .07.2018 MCN* COPY TO: THE ASSESSEE THE ASSESSING OFFICER THE COMMISSIONER OF INCOME-TAX COMMISSIONER OF INCOME-TAX(A) DR GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.