ACIT Circle 1, Ooty V. Nilgiri District Central Co-Operative Bank Ltd., Ootacamund

ITA 1851/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2833 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 01-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M SRINIVASA RAO IRS
• Assessee Lawyers: R RAJAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH : CHENNAI . , ! ' # ' $ . %& , ( * + [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBE R AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] ./I.T.A. NO.1851/CHNY/2018. / ASSESSMENT YEAR : 2014-2015. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, OOTY. VS. M/S. NILGIRI DISTRICT CENTRAL CO- OPERATIVE BANK LTD, NO.5, CHARING CROSS ROAD, OOTACAMUND -1 [PAN AAALT 0073E] ( ,- / APPELLANT) ( ./,- /RESPONDENT) / APPELLANT BY : SHRI. M.SRINIVASA RAO, IRS, CIT. /RESPONDENT BY : SHRI. R. RAJAN, FCA /DATE OF HEARING : 24-10-2018 ! /DATE OF PRONOUNCEMENT : 29-10-2018 0 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER IN THIS APPEAL FILED BY THE REVENUE, IT IS AGGRI EVED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) DELETED DISAL LOWANCE OF INTEREST OF >29,44,42,416/- MADE BY THE LD. ASSESSI NG OFFICER. 2. LD. COUNSEL FOR THE REVENUE SUBMITTED THAT ASSESSEE THOUGH IT WAS A CO-OPERATIVE BANK, COULD NOT SHOW THAT TH E INTEREST OF ITA NO.1851 /2018 :- 2 -: >29,44,42,416/- WAS PAID TO ITS MEMBERS. AS PER THE LD. DEPARTMENTAL REPRESENTATIVE, ASSESSEE WAS OBLIGED TO DEDUCT TAX AT SOURCE U/S.194A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WHERE INTEREST WAS PAID ON DEPOSITS ACCEPTED FROM NON-MEMBERS. CONTEN TION OF THE LD. DEPARTMENTAL REPRESENTATIVE WAS THAT ASSESSEE WAS REQUIRED TO PRODUCE EVIDENCE TO PROVE THE INTEREST PAYMENTS TO HAVE BEEN MADE ONLY TO ITS MEMBERS. AS PER THE LD. DEPARTMENTAL R EPRESENTATIVE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESS EE HAD REFUSED TO DO SO, STATING THAT NUMBER OF ACCOUNTS RAN INTO THO USANDS AND IT WOULD NOT BE POSSIBLE FOR THEM TO SUBMIT SUCH DETAILS. AS PER THE LD. DEPARTMENTAL REPRESENTATIVE, DESPITE THIS RELUCTANCE TO PROVE THE INTEREST PAYMENT TO HAVE BEEN MADE TO IT S MEMBERS, LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD ALLOWED TH E CLAIM RELYING ON A JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COIMBATORE DISTRICT CENTRAL CO-OPERATIVE BANK LTD. VS. ITO, (2016) 382 ITR 266 . 3. PER CONTRA, LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT DETAILS OF THE INTEREST PAYMENTS WERE FURNISHED B Y THE ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) . ACCORDING TO HIM, LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD A LLOWED THE CLAIM AFTER VERIFYING SUCH DETAILS. NEVERTHELESS, LD. AU THORISED ITA NO.1851 /2018 :- 3 -: REPRESENTATIVE SUBMITTED THAT ASSESSEE WAS WILLING TO PROVIDE THE DETAILS TO THE LD. ASSESSING OFFICER, IF REQUIRED. LD. AUTHORISED REPRESENTATIVE ALSO FILED AN UNDERTAKING DATED EVE N ON BEHALF OF THE ASSESSEE, AGREEING TO THIS. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. BY VIRTUE OF THE J UDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COIMBATORE DISTRICT CENTRAL CO- OPERATIVE BANK LTD (SUPRA), THERE CAN BE NO DOUBT THAT A CO-OPERATIVE SOCIETY CARRYING ON BUSINESS OF BANKING THE APPRO VAL OF RESERVE BANK OF INDIA IS NOT LIABLE TO DEDUCT TAX AT SOURCE AS S TIPULATED U/S.194A OF THE ACT, ON INTEREST PAID TO ITS MEMBERS. LD. ASSE SSING OFFICER HAD DISALLOWED THE CLAIM DUE TO THE FAILURE OF THE ASS ESSEE TO SHOW THAT THE INTEREST PAYMENT OF >29,44,42,416/- DEBITED BY IT, IN ITS PROFIT AND LOSS ACCOUNT WAS TO ITS MEMBERS. LD. COMMISSIONER OF INCOME TAX (APPEALS) HOWEVER, OVERLOOKED THIS ASPECT AND ALLOW ED THE CLAIM. CONSIDERING THE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT ASSESSEE CAN BE GIVEN ONE MORE OPPORTUNITY FOR PROV ING THAT INTEREST PAYMENTS WERE MADE TO ITS MEMBERS. WE ALSO TAKE NOTE OF THE UNDERTAKING GIVEN BY THE LD. AUTHORISED REPRESENTAT IVE IN THIS REGARD. WE THEREFORE SET ASIDE THE ORDERS OF THE LOWER AUTH ORITIES AND REMIT THE ISSUE RELATING TO INTEREST PAYMENTS OF >29,44,4 2,416/- MADE BY THE ITA NO.1851 /2018 :- 4 -: ASSESSEE, BACK TO THE FILE OF THE LD. ASSESSING OF FICER FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON MONDAY, THE 29TH DAY OF OC TOBER, 2018, AT CHENNAI. SD/- SD/- ( ' # ' $ . %& ) ( DUVVURU RL REDDY ) ( / JUDICIAL MEMBER ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED:29 TH OCTOBER, 2018. KV %& '()( / COPY TO: 1 . / APPELLANT 3. *+, / CIT(A) 5. (-. / / DR 2. / RESPONDENT 4. * / CIT 6. .01 / GF