Maratha Co-op. Bank Ltd., V. Income Tax Officer, TDS Ward, Belgaum., Belgaum

ITA 435/PAN/2014

• Counselvise Citation: 43524114 RSA 2014
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 22-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B BALAKRISHNA
• Assessee Lawyers: SHREEHARI KUTSA
• Keywords: Gift; Question of law; Non-deduction of tax
• Section: 206AA; 201(1); 27; 154; 139; 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 43 3 /PNJ/201 4 (ASST. YEAR : 20 1 1 - 1 2 ) AND ITA NO. 434/PNJ/2014 (ASST. YEAR : 20 1 2 - 1 3 ) AND ITA NO. 435/PNJ/2014 (ASST. YEAR : 20 1 3 - 1 4 ) AND ITA NO. 3 7 /PNJ/201 5 (ASST. YEAR : 20 1 1 - 1 2 ) AND ITA NO. 38 /PNJ/201 5 (ASST. YEAR : 20 1 2 - 1 3 ) AND ITA NO. 39/PNJ/201 5 (ASST. YEAR : 20 1 3 - 1 4 ) MARATHA COOPERATIVE BANK LTD., 1477, BASAVAN GALLI, BELGAUM VS. ITO, TDS WARD, BELGAUM. PAN NO. AABAM 0730 B (APPELLANT) (RESPONDENT) 2 ASSESSEE BY : SHRI SHREEHARI KUTSA - CA DEPARTMENT BY : SHRI B. BALAKRISHNA - D.R. DATE OF HEARING : 09 / 0 2 /2015 . DATE OF PRONOUNCEMENT : 20 / 0 3 /201 5 . O R D E R PER D.T. GARASIA , J .M TH ESE SIX APPEAL S HAVE BEEN FILED BY THE SAME ASSESSEE AGAINST THE SEPARATE ORDER S OF LD. CIT (A), BELGAUM EACH DATED 17 / 1 0/201 4 FOR THE A.Y S . 20 1 1 - 1 2 TO 2013 - 14 . THE COMMON ISSUE INVOLVED IN ALL THESE APPEALS , SO THESE ARE BEING DISPOSED OF BY TH IS CONSOLIDATED ORDER . 2. THIS ORDER SHALL GOVERN THE DISPOSAL OF ALL THE APPEALS. FOR THE SAKE OF CONVENIENCE , FACTS ARE TAKEN FROM ITA NO. 43 3 /PNJ/2014 . T HE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) PASSED UNDER SECTION 250 OF THE ACT IN SO FAR IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES AND THE FACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE TREATED AS AN ASSESSEE - IN - DEFAULT TO THE EXTENT OF RS.12,77,184/ - UNDER SECTION 201(1) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SE CTION 201(1A) OF THE ACT OF A SUM OF RS.4,34,214/ - UNDER THE LAW AND FACTS OF THE CASE SINCE THE APPELLANT DENIES ITSELF LIABLE TO BE TREATED AS AN ASSESSEE - IN - DEFAULT UNDER SECTION 201(1) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE INTERPRETATION SOUGHT TO BE MADE BY THE AUTHORITIES BELOW IS NOT IN ACCORDANCE WITH LAW AND THE MEMBERS OUGHT NOT TO HAVE BEEN SUBJECTED TO IDS PROVISIONS. 3 5. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT IS JUSTIFIED IN LAW IN NOT DEDUCTING TAX AT SOURCE ON PAYMENTS OF INCOME REFERRED IN SUB - SECTION (1) OF SECTION 194A OF THE ACT TO ITS MEMBERS IN VIEW OF THE CLAUSE (V) TO SUB - SECTION (3) OF SECTION 194A OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED CIT( A) FAILED TO APPRECIATE THAT THE APPELLANT HAS RIGHTLY DEDUCTED TAX AT SOURCE ONLY ON PAYMENTS TO NON - MEMBERS IN ACCORDANCE WITH CLAUSE (VIIA) READ WITH CLAUSE (I)(B) TO SUB - SECTION (3) OF SECTION 194A OF THE ACT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE PERIOD OF LEVY OF INTEREST UNDER SECTION 201(1A) SHOULD HAVE BEEN RESTRICTED TO THE DATE OF PAYMENT OF TAX ON SUCH INTEREST BY THE MEMBER OF THE SOCIETY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE APPELLANT DENIES ITSELF LIABLE TO BE TREATED AS AN ASSESSEE - IN - DEFAULT, AS THERE EXISTED SUFFICIENT CAUSE FOR NOT DEDUCTING TAX AT SOURCE VIZ., THE CIRCULAR NO. 09 OF 2002 AND CONSEQUENTLY THE PROVISIONS OF SECTION 201(1) ARE NOT ATTRACTED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 194A (1) OF THE ACT ARE NOT APPLICABLE T O THE MEMBERS OF THE CO OPERATIVE SOCIETY ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. THE LEARNED CIT(A) ERRED IN NOT TAKING INTO CONSIDERATION THE CERTIFICATE OF CHARTERED ACCOUNTANTS SUBMITTED BY THE APPELLANT IN ACCORDANCE WITH PROVISO TO SECTION 201(1) OF THE ACT R.W. RULE 31ACB OF THE RULES AND REDUCED THE INTEREST AMOUNT OF RS. 94,33,395/ - FROM THE TOTAL INTEREST AMOUNT FOR THE PURPOSE OF CALCULATING TAX U/S 201(1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 11. WITHOUT PREJUDICE THE AMOUNT DETERMINED IS VERY HIGH AND REQUIRES TO BE REDUCED SUBSTANTIALLY. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE FOLLOWING GROUNDS INVOLVING PURE QUESTION OF LAW, WHICH DO NOT INVOLVE ANY INVESTIGATION OF ANY FACTS OTHERWISE ON THE RECORD OF THE DEPARTMENT, IS RAISED FOR THE ADJUDICATION BY THIS HON'BLE BENCH OF THE TRIBUNA L. IT IS SUBMITTED THAT IT IS WITHIN THE RIGHTS OF THE APPELLANT TO RAISE THESE PURE QUESTION OF LAW NOT RAISED BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). RELIANCE IS PLACED ON JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THE RMAL POWER CORPORATION VS. CIT REPORTED IN (1998) 229 ITR 383 (SC). 4 12. THE ORDER PASSED UNDER SECTION 201(1) AND SECTION 201(1A) OF THE ACT ARE BARRED BY TIME IN ACCORDANCE WITH SECTION 201(3) AND ACCORDINGLY LIABLE TO CANCELLED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 13. WITHOUT PREJUDICE, THE LEARNED ASSESSING OFFICER HAVING ISSUED COMMON SHOW CAUSE NOTICE FOR FOUR YEARS, THE SAME IS NOT SUSTAINABLE IN LAW AS EACH YEAR IS A SEPARATE YEAR AND SEPARATE SHOW CAUSE NOTICE OUGHT TO HAVE BEEN I SSUED AND CONSEQUENTLY THE PROCEEDINGS UNDER SECTION 201(1) AND 201(1A) ARE VOID - AB - INITIO UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE 14. WITHOUT PREJUDICE, NO INTEREST UNDER SECTION 201(1A) CAN BE LEVIED AS NO SHOW CAUSE NOTICE WAS ISSUED FOR LEVY OF THE SAME AND NO PROCEEDINGS UNDER SECTION 201(1A) WERE CONDUCTED. SINCE 201(1) AND 201(1A) ARE TWO SEPARATE PROCEEDINGS UNDER THE ACT, INTEREST CANNOT BE LEVIED WITHOUT APPROPRIATE PROCEEDINGS BEFORE LEVY OF INTEREST UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 15. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN HOLDING THE APPELLANT TO BE AN ASSESSEE IN DEFAULT WITHOUT ASCERTAINING THE FACT AS TO WHETHER THE PAYEES HAVE DISCLOSED THE IMPUGNED INTEREST AMOUNT IN THEIR RETURN OF INCOME ON THE FACTS AND CIRCUMSTANCE S OF THE CASE. 16. WITHOUT PREJUDICE, THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 206AA ARE NOT APPLICABLE TO THE MEMBERS WHOSE GROSS TOTAL INCOME IS LESS THAN THE BASIC EXEMPTION LIMIT PRESCRIBED FOR FILING RETURN OF INCOME A ND CONSEQUENTLY THE INTEREST AMOUNTS PAID TO SUCH MEMBERS ARE NOT EXIGIBLE TO INCOME TAX ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 17. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THERE IS NO LIABILITY TO PAY TAX ON THE ANALOGY OF SECTION 206C(6) IN T HE PROVISIONS OF SECTION 201 OF THE ACT AND THUS THE DEMAND NOTICE UNDER SECTION 156 OF THE ACT CAN BE RAISED ON THE ASSESSEE HIMSELF AND CONSEQUENTLY THE AMOUNT CANNOT BE COLLECTED FROM THE APPELLANT. 18. THE LEARNED CIT(A) FAILED TO APPRECIATE THE PRO VISIONS OF SECTION 191 OF THE ACT WHICH PROVIDES THAT IN A CASE OF INCOME IN RESPECT OF WHICH PROVISION IS NOT MADE UNDER THIS CHAPTER XVII - B OF THE ACT FOR DEDUCTING INCOME - TAX AT THE TIME OF PAYMENT, INCOME - TAX SHALL BE PAYABLE BY THE ASSESSEE DIRECT AND CONSEQUENTLY PASSED A PERVERSE ORDER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 19. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 5 20. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING AND IS REGISTERED UNDER THE PROVISIONS OF SEC . 7 OF THE KARNATAKA COOPERATIVE SOCIETIES ACT , 1959 AND LICENSED BY THE RESERVE BANK OF INDIA VIDE SEC. 22(1) R.W.S. 56(O) OF THE BANKING REGULATION ACT, 1949 . THE ASSESSEE IS REGULATED UNDER THE PROVISIONS OF THE BANKING REGULATION ACT, 1949 SUBJECT TO EXCEPTIONS P ROVIDED THEREIN. THE ASSESSING OFFICER CONDUCTED A SURVEY IN THE PREMISES OF THE ASSESSEE ON 25/10/2013 . THE ASSESSEE WAS SERVED WITH A SHOW - CAUSE NOTICE DATED 0 6/01/2014 WHEREIN THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO SHOW - CAUSE WHY IT SHOULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT UNDER THE PROVISIONS OF SEC. 201(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE 'ACT', FOR SHORT) ON ACCOU NT OF FAILURE TO DEDUCT TAX AT SOURCE UNDER SECTION 194A OF THE ACT ON INTEREST PAID TO ITS MEMBERS ON TIME DEPOSITS. THE ASSESSING OFFICER HAS PASSED THE ORDER U/S. 201(1) OF THE ACT HOLDING THE ASSESSEE AS IN DEFAULT AND LEVYING INTEREST U/S. 201(1A) OF THE ACT ON 30/01/2014 AS FOLLOWS: - INTEREST PAID TO MEMBERS RS. 1, 11 , 45 , 720 / - TAX U/S. 201(1) RS. 12 , 77 ,1 84 / - 6 INTEREST U/S. 201(1A) RS . 4,3 4,2 14 / - ------------------- TOTAL DEMAND RS. 1 7 , 11 , 3 9 8 / - ------------------- 4 . THE MATTER WAS CARRIED TO THE LEARNED CIT(A) AND THE LEARNED CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: - 6. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE ASSESSEE AND ALSO PERUSED THE ORDER OF THE ASSESSING OFFICER. I T IS AN UNDISPUTED FACT THAT THE APPELLANT HAS PAID INTEREST ON TERM DEPOSITS TO THE TUNE OF R S. 1, 1,45,720/ - TO DEPOSITORS WITHOUT DEDUCTING TAX AT SOURCE. THE APPELLANT CONTENDED THAT THE PRO VISIONS OF TDS ARE NOT ATTRACTED IN VIEW OF CLAUSE - (V) OF SUB - SECTION (3) OF SECTION 194A AS THE INTEREST PAYMENTS TO THE EXTENT OF RS. 1 ,11,45,720/ - HAVE BEEN MADE TO THE MEMBERS OF THE BANK WHICH IS A COOPERATIVE SOCIETY IN THI S REGARD THE ITO IDS WARD B EIGAUM HAS INTERPRETED THE W ORD COOPERATIVE SOCIETY AS EMPLOYED IN SEC.194A(3)(V) TO MEAN CO - OPERATIVE SOCIETY OTHER THAN COOPERATIVE BANK AS DECIDED BY THE TAT, PUNE BENCH, IN BHAGANI NIVEDITA SAHAKARI B ANK LTD. V. ACIT 87 I TD 559 WHEREIN, THE HONBLE TAT HAS HELD THAT THE TERM CO - OPERATIVE SOCIETY MENTIONE D IN SECTION 191A(3 )(V) TO BE INTERPRETED AS CO - OPERAT I VE SOC IETY OTHER THAN CO - OPERAT IVE BANK . THUS, THE ITO PASSED AN ORDER U/S. 201(1)/(1A) AND CALCULATED THE AMOUNT PAYABLE AT RS. 17,11,398/ - , RS. 12,77,184/ - U/S. 201(1) AND RS. 4, 3 4, 214 / - U/S. 201(1A) . 6.1 ON GOING THROUGH THE PROVISI ONS OF SECTION 1944(3), IT IS SE EN THAT THE ITO IS JUSTI F IED IN PASSING AN ORDER U/S 201(1)/(1A) AND CALCULATING THE AMOUNT PAYABLE AT RS. 17,11,398/ - , RS. 12,77,184/ - U/S. 201(1) AND RS. 4,34,214/ - U/S. 201(1A). . THE SUBMISSIONS O F THE APPELL ANT ARE NOT ACCEPTABLE IN VIEW OF THE DECISION OF HONBLE PUNE TAT IN THE CASE OF BHA GANI NIVEDITA SAHAKARI BANK LTD CITED SUPRA WHEREIN, IT IS CLEARLY HELD THAT SECTION 194A(3)(VIIA)(BUSINESS) MAKES NO DISTINCTION BETWEEN MEMBERS AND NON - MEMBERS OF CO - OPERATIVE FOR PURPOSE OF DEDUCTION OF TAX AT SOURCE ON INTEREST ON TIME DEPOSITS PAID/CREDITED AND TH E RE FORE. CO - OPERATIVE BANK WOULD BE ABLE TO DEDUCT TAX AT SOURCE UNDER SECTION 194 A(1 ) ON INTEREST ON TIME DEPOSITS PAID/CREDITED TO ITS DEPOSITORS, IF SUCH INTEREST AMOUNT EXCEEDED THE LIMIT PRESCRIBED IN PROVISO TO SECTION 7 194A(3) (I) . FURTHER, THE H ONBLE KE RALA HIGH COUR T IN THE CASE OF MOOLAMATTOM ELECTRICITY BOARD EMPLO YEES CO - OP BANK LTD 238 YR 630 HAS MADE A CLEAR DISTINCTION BETWEEN PRIMARY CREDIT SOCIETY AND A CO - OP SOCIETY ENGAGED IN BANKING BUSINESS. THUS, SECTION 1944 DEALS WITH CO - OP SOCIETIES ENGAGED IN THE BUSINESS O BANKING. AS HAS BEEN RIGHTLY HELD BY THE ITO THAT THE MOMENT THE AMOUNT PAID/CREDITED TO ANY DEPOSITOR DURING THE YEAR EXCEEDS RS 10,000 / - THE PROVISIONS OF SECTION 194A (1) SH ALL APPLY A ND THE COOPERATIVE SOCIETY ENGAGED IN THE BANKING BUSINESS SHALL HAVE TO DEDUCT TAX ON SUCH PAYME NTS FROM THE FACT S OF THE CASE, IT IS SEEN THAT THE ITO HAS CATEGORICALLY BROUGHT OUT THE MATERIAL ON RECORD TO PROVE THAT THE APPELLANT BANK IS COVERED BY THE PROVISIONS OF SUB - CLAUSE (B} OF CLAUSE ( I ) OF SEC . 194A(3) AS WELL AS THE PROVISIONS OF CLAUSE (VIIA) OF SEC.194A(3) WHICH ARE SPECIFIC NATURE AND THE APPELLANT CANNOT PUT FORTH ITS CLAIM UNDER SECTION 194(3)(V WHICH ARE GENERA L IN NATURE. AS THE APPELLANT IS CO - OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING IT IS COVERED UNDER THESE SPECIFIC CLAUSES AN D AS HAS BEEN HELD BY THE HONBLE ITAT , PUNE BENCH PUNE IN BHAGANI NIVEDITA SAHAKARI BANK LTD V. ACT (2003) 87 TTD 569 THAT THE TERM CO - OP SOCIETY IN SUB - CLAUSE (V) TO BE INTERPRETED AS CO - OP SOCIETY OTHER THAN CO - OPERATIVE BANK, THE APPELLANT IS LIABLE F O R TDS PROVISIONS UNDER SECTION 194A. 6.2 THE APPELLANTS ARGUMENT THAT C L AUSE(V) T O SEC.194A(3) MAY BE TAKEN AS APPLYING TO MEMBERS AND OTHER CLAUSES TO THE SAID SECTION MAY BE TAKEN TO APPLY TO NON MEMBERS IS WITH OUT ANY BASIS IN AS MUCH AS CLAUSES (I) AND (VITA) APPLY TO BOTH THE MEMBERS AS NON MEMBERS. WHERE EVER THE LEGISLATURE INTENDS TO APPLY A PARTICULAR PROVISION TO MEMBER OR TO A NON - MEMBER, IT HAS DONE SO EXPRESSLY . 6 . 3 NOW COMING TO THE CIRCULAR NO.9 OF 2002 ISSUED BY THE CBD T RELIED UPON BY THE APPELLANT, THE BOARD VIDE SAID CIRCULAR HAD SOUGHT TO INTERPRET THE DEFINITION OF WORD MEMBER CLARIFYING THAT THE WORD MEMBER DOES NOT INCLUDE WORD NOMINAL MEMBER. I T WAS HELD BY THE BOMBAY HIGH COURT IN THE CASE OF JALGAON DISTRICT C ENTRAL CO - OP BANK LTD & ANR V. UNION OF INDIA 26S ITR 423 (BORN), THAT THE BOARD HAS NO POWER TO INTERPRET THE PROVISIONS OF LAW BY WAY OF CIRCULAR. THE ISSUE AT HAND OF THE BOMBAY HIGH COURT WAS THE DEFINITION OF THE WORD MEMBER AS APPEARING IN CLAUSE (V) OF SECTION 194(3) AND THE POWERS OF THE CENTRAL BOARD O F DIRECT TAXES TO ISSUE CIRCUL ARS U/S 119 WHICH WO ULD OVERRIDE OR DETRACT FROM THE PROVISIONS OF THE INCOME TAX ACT. THE CIRCULAR NO.9 OF 2002 DATED 11 - 09 - 2002 ISSUED BY THE CBDT HAS BEEN HE L D AND SET ASIDE BY THE 8 HONBLE HIGH COURT. THEREFORE, THE CIRCULAR NO.9 OF 2002 DATED 11 - 09 - 2002 ISSUED BY THE CBDT DOES NOT HELP THE CASE OF THE APPELLANT. THE APPE LLANT S RELIANCE ON THE SAID CIRCULAR IS FOUND TO BE ILL FOUNDED. SIMILARLY, THE APPELL A NTS RELIAN CE THE DECISIONS OF THE HIGH COURT IN THE CASES OF JALGAON DISTRICT CO - OP BANK 265 ITR 423, (SUPRA) AS WELL AS IN THE CASE OF THE GUJARAT URBAN COOPERATIVE BANK FEDERATION DO NOT HELP THE CA S E OF THE APPELLANT AS IN BOTH THE CASES THE DECISION IS SAME AS D ISCUSSED ABOVE. 6.4 IN ORDER TO UNDERSTAND THE LEGISLATIVE INTENT IN THIS REGARD, T IS NECESSARY TO REFER TO THE EXPLANATORY NOTES TO FINANCE (NO.2) ACT, 1991 GIVEN IN THE CIRCULAR NO 621 DATED 19 - 12 - 1991 WH I CH AMONG OTHERS, PROVIDES THAT : - WITH A VIEW TO IMPROVING TAX COMPLIANCE, SEC. 1 94 A OF THE ACT HAS BEEN AMENDED TO SECURE DEDUCTION OF TAX AT SOURCE FROM INTEREST ON TIME DEPOSITS WITH THE AFORESAID BANKING COMPANIES AND CO - OPERATIVE SOCIETIES ENGAGED IN CURRYING ON THE BUSINESS OF BANKIN G THE CIRCULAR OF THE CBDT EXPLAINS IN NO UNCERTAIN TERMS THAT THE INTENTION OF THE LEGISLATURE IN AMENDMENT OF SEC. 194A, INTER ALIA WAS TO SECURE DEDUCTION OF TAX AT SOURCE FROM INTEREST ON TIME DEPOSITS WITH THE BANKING COMPANIES AND COOPERATIVE SOCIETIES ENGAGED IN CARRYING ON THE BUSINESS OF BANKING. THE APPELLANT BEING A COOPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING IS LIABLE TO MAKE TDS U/S. 194A 6.5 IN A RECENTLY DE L IVERED JUDGMENT; THE HONB L E TAT PANA J I BENCH, PANAJI IN THE CASE OF THE BAI LHONGAL URBAN CO - OP. BANK LTD.. VS. JCIT RANGE I, BELGAU M IN ITA NO. 85/PNJ/2013 DATED 28/08/2013 HAS UPHELD THE DECISION OF THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS) IN DISALLOWING U/S. 40(A ) (IA) OF THE I.T.ACT THE INTEREST AMOUNT PAID BY THE ASSESSEE CO - OPERA TI VE BANK ON TERM DEPOSIT IN EXCESS OF RS. 10,000/ - WITHOUT MAKING TDS U/S. 194A(3)(I) AND NOT ALLOWING ASSESSEES CONTENTION THAT IT WAS NOT LIABLE TO DEDUCT TAX AT SOURCE BY VIRTUE OF THE PROVISIONS OF SEC 194A(3)(V) OF THE I.T.ACT. 6. 6 THE APPELLANT HAS ALSO RELIED ON THE DECISION OF THE HONBLE ITAT, BANGALORE B ENCH A BANGAL ORE DECIDED IN FAVOUR OF THE APPELLAN T. 7. IN VIEW OF THE ABOVE DISCUSSION AND TAKING INTO CONSIDERATION THE VA RIOUS ARGUMENTS GIVEN BY THE I TO IN HIS ORDER, THE LEGISLATURES INTENT BEHIND THE INTRODUCTI ON RELEVANT PROVISIONS OF SECTION 194A AS EX PLAI NED 9 IN THE EXPLANATORY NOTES TO FINANCE (N O.2) ACT, 1991, SUPRA AND RESPECTFULLY FOLLOWING THE DECISION OF HONBLE ITAT PANAJI BENCH IN CASE OF BHAILHONGAL CO - OP. BANK LTD., SUPRA, THE DECISION O F THE 110 IN PASSING ORDE R 201(1)/(IA) AND CALCULATING THE AMOUNT PAYABLE AT RS. 17,11,398/ - , RS. 1 2,77,184/ - U/S. 201(1) AND RS. 4,34,214/ - U/S. 201(1A) IS CONFIRMED. 8. I N THE RESULT, THE APPEAL FILED BY THE APPELLANT IS DISMISSED. 5. DURING THE COURSE OF HEARING, LEARNED AR SUBMITTED THAT THE RETURN OF FINANCIAL YEAR 2010 - 11 IS BARRED BY TIME LIMIT, THEREFORE , IT IS LIABLE TO BE SET ASIDE IN VIEW OF SEC. 201(3) OF THE ACT . LEARNED AR SUBMITTED THAT THE ASSESSEE HAS PAID INTEREST ON T ERM DEPOSITS , BUT THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE , BUT THE PAYEE DEPOSITORS HAVE DECLARED THE INTEREST AMOUNTS IN THEIR RESPECTIVE RETURN S OF INCOME. INTEREST CAN BE LE V IED U/S. 201(1A) OF THE ACT WHERE THE PAYEE HAS PAID ADVANCE TAXES BY CALCULATING ADVANCE TAX IN ACCORDANCE WITH SEC. 209 OF THE ACT. T HE ASSESSEE IS , THEREFORE, CANNOT BE REGARDED TO BE IN DEFAULT IN VIEW OF THE DECISION OF SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES P. LTD. V CIT REPORTED IN 293 ITR 226 . THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAS FILED QUARTERLY RETURNS FOR FINANCIAL YEAR 20 0 9 - 1 0 ON 17 /0 5 /201 0 AND THE ORDER SHOULD HAVE BEEN PASSED WITHIN TWO YEARS FROM END OF F INANCIAL Y EAR , IN WHICH RETURN IS FILED I.E. UPTO 31/03/2013 AND THE ORDER IS PASSED IN THE MONTH OF JANUARY, 2014 . THEREFORE , THE ORDER IS BARRED BY LIMITATION. THE LEARNED AR SECONDLY ARGUED THAT THE ASSESSING 10 OFFICER SHOULD HAVE VERIFIED WHETHER THE INTEREST INCOME IS SHOWN BY THE MEMBER DEPOSITOR IN HIS RETURN OF INCOME OR NOT AND IF THE DEPOSITOR HAS ALREADY PAID THE TAXES, THEN THE ASSESSEE CANNOT BE DEEMED TO BE DEFAULT FO R DEDUCT THE TAX AT SOURCE. THE ASSESSING OFFICER HAS NOT MADE ANY ATTEMPT TO VERIFY IF THE PAYEE MEMBERS HAD DECLARED THE TAX ON IMPUGNED AMOUNT IN THE RETURN OF INCOME , THEREFORE THE ASSESSING OFFICER IS WITHOUT JURISDICTION. THE LEARNED AR SUBMITTED T HAT THE DEPARTMENT CANNOT BE PERMITTED TO CALCULATE THE TAX ON THE SAME INCOME TWICE . MOREOVER, U/S. 190 OF THE ACT WHICH SAYS THAT THE TAX SHOULD BE PAYABLE BY DEDUCTION OR COLLECTION AT SOURCE OR BY ADVANCE PAYMENT OR BY PAYMENT U/S. 192(1A) OF THE ACT . SEC. 191 OF THE ACT PRESCRIBES THAT IN THE EVENT THERE IS A FAILURE ON THE PART OF THE DEDUCTOR TO DEDUCT TAX AT SOURCE ON PAYMENTS MADE TO THE ASSESSEE, THEN THE PRIMARY LIABILITY TO PAY TAX ON SUCH INCOME RESTS ON THE ASSESSEE AND THE ASSESSEE SHALL PA Y THE TAX DIRECTLY . WHEN THE ASSESSEE FAILED TO PAY TAX ON SUCH INCOME WHICH WAS EARLIER SUBJECTED TO TDS, THE DEDUCTOR CAN BE HELD TO BE AN ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT . SECTION 201(1) OF THE ACT PROVIDES THAT IN THE EVENT OF FAILURE TO DEDUCT TAX AT SOURCE ON PAYMENTS WHICH OUGHT TO HAVE BEEN SUBJECTED TO TDS, THE DEDUCTOR SHALL BE HELD TO BE AN ASSESSEE IN DEFAULT. HOWEVER , SEC. 201(1) CANNOT BE READ IN ISOLATION BUT HAS TO 11 BE READ WITH SEC. 191 OF THE ACT, W HICH MAKE IT A PRECONDITION THAT FOR THE DEDUCTOR TO BE HELD TO BE ASSESSEE IN DEFAULT , T HE ASSESSEE PAYEE SHOULD HAVE ALSO FAILED TO REMIT THE TAXES DUE ON SUCH INCOME IN HIS RETURN OF INCOME . THUS THE LAW REQUIRES THAT THERE HAS TO BE A FACT FINDING EXERCISE BY THE AUTHORITIES BY WAY OF ASCERTAINING AS TO WHETHER IN THE EVENT OF DEDUCTOR HAVING FAILED TO DEDUCT TAX AT SOURCE ON CERTAIN PAYMENTS , T HE PAYEE HAVE ALSO FAILED TO DECLARE SUCH INC OME IN THEIR RETURN OF INCOME AND PAID THE TAXES. IT IS ONLY WHEN THE PAYEE HAS FAILED TO REMIT THE TAXES AND THE D EPARTMENT IS UNABLE TO RECOVER FROM THEM THAT THE LIABILITY CAN BE CAST ED ON THE DEDUCTOR TO PAY SUCH TAXES ON HIS OWN ACCOUNT. SECTION 201(1) PROVI D ES THAT ANY PERSON, INCLUDING THE PRINCIPAL OFFICER OF A COMPANY , WHO FAILS TO DEDUCT THE TAX AT SOURCE , ON THE SUM PAID TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAU LT , IF SUCH RESIDENT HAS FURNISHED HIS RETURN OF INCOME U/S. 139 OF THE ACT AND HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME AND HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCOME AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFECT FROM AN ACCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED. THEREFORE , THE ASSESSEE CANNOT BE HELD LIABLE UNLESS THE DEDUCTOR HAS NOT PAID TAX O N T H IS INCOME IN HIS RETURN . 12 LEARNED AR SUBMITTED THAT THE DEDUCTION OF TAX AT SOURCE IS THE RESPONSIBILITY OF THE ASSESSING OFFICER IF THE ASSESSEE HAS NOT DEDUCTED THE TDS AND THE DEDUCTEE HAS NOT SHOWN IN HIS RETURN OF INCOME , THEN AND ONLY THEN THE ASSESSEE CAN BE HELD IN DEFAULT. THE ASSESSEE HELD TO BE IN DEFAULT EVEN ON AMOUNT WHICH MIGHT ACTUALLY BE EXEMPT IN THE HANDS OF THE PAYEE UNDER ANY PROVISIONS OF THE ACT . ONCE AN AMOUNT IS EXEMPT IN THE HANDS OF THE ASSESSEE, THE QUESTION OF DEDUCTION OF TAX AT SOURCE DOES NOT ARISE . THE LEARNED AR SUBMITTED THAT IN THIS CASE ASSESSEE HAS ALREADY SUBMI T TED THE CERTIFICATE OBTAINED FROM THE ASSESSEE , WHICH PROVES THAT THE PAYEE HAVE ALREADY DISCHARGED THEIR TAX LIABILITY ON THE IMPUGNED INTEREST INCOME. LEARNED AR RELIED UPON THE DECISION OF HONBLE ALLA H A B AD HIGH COURT IN THE CASE OF JAGARAN PRAKASHAN V . DCIT (TDS) REPORTED IN 345 ITR 288 AND THE DECISION OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF DIT, INTERNATIONAL TAXATION V. MAERSK CO. LTD. REPORTED IN 334 ITR 79 (FB) . LEARNED AR FURTHER SUBMITTED THAT IMPUG N ED ORDER PASSED U/S. 201(1) OF THE ACT HOLDING THE ASSESSEE AS AN ASSESSEE IN DEFAULT IN RESPECT OF THE INTEREST INCOME PAID TO MEMBER DEPOSITORS ARE NOT IN ACCORDANCE WITH LAW AND REQUIRED TO BE SET ASIDE. 6. LEARNED DR HAS RELIED UPON THE ORDER OF LEARNED CIT(A) . 13 7. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE , WE FIND THAT THE ASSESSEE IS LIABLE TO DEDUCT THE TAX AT SOURCE ON THE TERM DEPOSIT OF MEMBERS AND COOPERATIVE SOCIETIES AS PER THE PROVISIONS OF SE C. 194A(3) (VIIA)(B) OF THE ACT. SECTION 194A (3)(VIIA)(B) DEALS WITH COOPERATIVE SOCIETIES ENGAGED IN THE BUSINESS OF BANKING . IF THE AMOUNT PAID OR CREDITED TO ANY DEPOSITOR DURING THE YEAR EXCEEDS RS. 10,000/ - , THE PROVISIONS OF SEC. 194A(1) OF THE ACT SHALL APPLY TO THE COOPERATIVE SOCIETY ENGAGED IN THE BANKING BUSINESS SHALL HAVE TO DEDUCT TAX ON SUCH PAYMENT. FROM THE FACTS OF THE CASE, IT IS SEEN THAT THE ITO HAS CATEGORICALLY B R OUGHT OUT THE MATERIAL ON RECORD TO PROVE THAT THE ASSESSEE BANK IS COVERED BY THE PROVISIONS OF SUB - CLAUSE (B) OF CLAUSE ( VI I A ) OF SEC. 194A(3) OF THE ACT. WE HAVE TAKEN THE CONSISTENT VIEW TAKEN BY THE ITAT, PANAJI BENCH IN THE CASE OF SARASWAT CO - O PERATIVE BANK LTD VS. ITO, TDS WARD, BELGAUM IN I.T.A.NOS. 233 TO 236/PNJ/201 4 . 2.6. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES, IT IS UNDISPUTED FACT THAT ASSESSEE HAS PAID INTEREST ON TERM DEPOSIT TO RS.18,39,0031/ - TO DEPOSITOR WITHOUT DEDUCTING THE TAX AT SOURCE. THE ASSESSEE CONTENDED THAT THE PROVISIONS OF TDS ARE NOT ATTRACTED IN VIEW OF CLAUSE (V) OF SUB - SECTION (3) OF SECTION 194A AS THE INTEREST PAYMENTS TO THE EXTENT OF RS.1,83,90,031/ - HAVE BEEN MADE TO THE MEMBERS OF THE BANK WHICH IS A CO - OPERATIVE SOCIETY. WHILE THE REVENUE CLAIMS THE T.D.S HAS TO BE DEDUCTED AS PER SECTION 194A(VIIA). THE PROVISIONS OF SECTION 194A(3)(V)(VIIA) WHICH READ AS UNDER: (3) THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY - 14 (I) 5 WHERE THE AMOUNT OF SUCH INCOME OR, AS THE CASE MAY BE, THE AGGREGATE OF THE AMOUNTS OF SUCH INCOME CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE PERSON REFERRED TO IN SUB - SECTION (1) TO THE ACCOUNT OF, OR TO, THE PAYEE, DOES NOT EXCEED 6 TEN THOUSAND RUPEES.......................... (V) TO SUCH INCOME CREDITED OR PAID BY A CO - OPERATIVE SOCIETY 5 [TO A MEMBER THEREOF OR] TO ANY OTHER CO - OPERATIVE SOCIETY;] (VIIA) TO SUCH INCOME CREDITED OR PAID IN RESPECT OF, - (A) DEPOSIT WITH A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CREDIT SOCIETY OR A CO - OPERATIVE LAND MORTGAGE BANK OR A CO - OPERATIVE LAND DEVELOPMENT BANK; (B) DEPOSITS (OTHER THAN TIME DEPOSITS MADE ON OR AFTER THE 1 ST DAY OF JULY, 1995) WITH A CO - OPERATIVE SOCIETY, OTHER THAN A CO - OPERATIVE SOCIETY OR BANK REFERRED TO IN SUB - CLAUSE (A), ENGAGED IN CARRYING ON THE BUSINESS OF BANKING; WE FIND THAT THE CO - OPERATIVE IS ALSO INTERPRETED BY THE HONBLE JURISDICTIONAL KARNATAKA HIGH COURT, WHEREIN IN THE CASE OF CIT VS. YESHWANTHPUR CREDIT CO - OPERATIVE SOCIETY LIMITED IN ITA NO. 237/2012, WHEREIN THE HONBLE HIGH COURT HAS INTERPRETED THE CO - OPERATIVE BANK BY OBSERVING AS UNDER: NATURE CO - OPERATIVE SOCIETY REGISTERED UNDER BANKING REGULATION ACT, 1949 CO - OPERATIVE SOCIETY REGISTERED UNDER KARNATAKA CO - OPERATIVE SOCIETY ACT, 1959 REGISTRATION UNDER THE BANKING REGULATION ACT, 1949 AND CO - OPERATIVE SOCIETIES ACT, 1959 CO - OPERATIVE SOCIETIES ACT, 1959 NATURE OF BUSINESS 1. AS DEFINED IN SECTION 6 OF BANKING. REGULATION ACT. 2. CAN OPEN, SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, OVERDRAFT ACCOUNT, CASH CREDIT ACCOUNT, ISSUE LETTER OF CREDI T, DISCOUNTING BILLS.. OF EXCHANGE, ISSUE CHEQUES, DEMAND DRAFTS (DD), PAY ORDERS, GIFT CHEQUES, LOCKERS, BANK GUARANTEES ETC. 1. AS PER THE BYE LAWS OF THE COOPERATIVE SOCIETY. 2. SOCIETY CANNOT OPEN SAVINGS BANK ACCOUNT, CURRENT ACCOUNT, ISSUE LETTER OF CREDIT, DISCOUNTING BILLS OF EXCHANGE, ISSUE CHEQUE, DE MAND DRAFTS, PAY ORDERS, GIFT CHEQUES, LOCKERS, BANK 15 3. CO - OPERATIVE BANKS CAN ACT AS CLEARING AGENT FOR CHEQUES, DDS, PAY - ORDERS AND OTHER FORMS. 4. BANKS ARE BOUND TO FOLLOW THE RULES, REGULATIONS AND DIRECTIONS ISSUED BY RESERVE BANK OF INDIA (RBI) GUARANTEES ETC. 3. SOCIETY CANNOT ACT CLEARING AGENT, FOR CHEQUES, DDS, PAY ORDERS AND OTHER FORMS. 4. SOCIETY ARE BOUND BY RULES AND REGULATIONS AS SPECIFIED BY IN THE CO - OPERATIVE SOCIETIES ACT. FILIN G OF RETURNS CO - OPERATIVE BANKS. HAVE TO SUBMIT ANNUAL RETURN TO RBI EVERY YEAR SOCIETY HAS TO SUBMIT THE ANNUAL RETURN TO REGISTRAR OF SOCIETIES. INSPECTION RBI HAS THE POWER TO INSPECT ACCOUNTS AND OVER ALL FUNCTIONING OF THE BANK REGISTRAR HAS THE POWER TO INSPECT ACCOUNTS AND OVER ALL FUNCTIONING OF THE BANK. PART V OF THE PART V PART V OF THE BANKING REGULATION ACT IS APPLICABLE TO CO - OPERATIVE BANK PART V OF THE BANKING REGULATION ACT IS NOT APPLICABLE TO CO - OPERATIVE BANKS. USE OF WORDS THE W ORD BANK BANKER, BANKING CAN BE USED BY A CO - OPERATIVE BANK. THE WORD BANK BANKER, BANKING CANNOT BE USED BY A CO - OPERATIVE SOCIETY MOREOVER, WE FIND THAT IN THE SAID JUDGMENT THE HONBLE HIGH COURT HAS HELD AS UNDER: IF A CO - OPERATIVE BA NK IS EXCLUSIVELY CARRYING BANKING BUSINESS, THEN THE INCOME DERIVED FROM THE SAID BUSINESS CANNOT BE DEDUCTED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. THE SAID INCOME IS LIABLE FOR TAX. A CO - OPERATIVE BANK AS DEFINED UNDER THE BANKING REGULATION ACT INCLUDES THE PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL RURAL DEVELOPMENT BANK. THE LEGISLATURE DID NOT WANT TO DENY THE SAID BENEFIT TO A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THEY DID NOT WANT TO EXTEND THE SAID BENEFIT TO A CO - OPERATIVE BANK WHICH IS EXCLUSIVELY CARRYING ON BANKING BUSINESS I.E., THE PURPORT OF THE AMENDMENT. IF THE ASSESSEE IS NOT A CO - OPERATIVE BANK CARRYING ON EXCLUSIVELY BANKING BUSINESS AND IF IT DOES NOT POSSESS A LICENSE FROM 16 THE RESERVE BANK OF INDIA TO CARRY ON BUSINESS, THEN IT IS NOT A CO - OPERATIVE BANK. IT IS A CO - OPERATIVE SOCIETY WHICH ALSO CARRIES ON THE BUSINESS OF LENDING MONEY TO ITS MEMBERS WHICH IS COVERED UNDER SECTION 80P (2)(A)(I) I.E., CARRYING ON THE BUSINESS OF BANKING FOR PROVIDING CREDIT FACILITATES TO ITS MEMBERS. THE OBJECT OF THE AFORESAID AMENDMENT IS NOT TO EXCLUDE THE BENEFIT EXTENDED UNDER SECTION 80P(I) TO THE SOCIETY. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE THE HONBLE HIGH COURT HAS INTERPRETED THE DIFFERENCE BETWEEN CO - OPERATIVE BANK AND CO - OPERATIVE SOCIETY. THE CO - OPERATIVE BANK AND CO - OPERATIVE SOCIETY IS ALSO INTERPRETED IN THE CASE OF BHAGANI NIVEDITA SAHAKARI BANK LTD. VS. ACIT (2003) 87 ITD 567 WHERE IN IT IS HELD THAT CO - OPERATIVE SOCIETY MENTIONED IN SECTION 194A(3)(V) SHOULD BE INTERPRETED AS CO - OPERATIVE SOCIETY OTHER THAN CO - OPERATIVE BANK. WE FIND THAT THE ITAT PUNE BENCH HAS INTERPRETED THE WORD CO - OPERATIVE AND CO - OPERATIVE SOCIET Y AND FURTHER THE HONBLE KERALA HIGH COURT IN THE CASE OF MOOLAMATTOM ELECTRICITY BOARD EMPLOYEES CO - OPERATIVE BANK LTD. 630 HAS MADE A CLEAR DISTINCTION BETWEEN PRIMARY CREDIT SOCIETY AND A CO - OPERATIVE SOCIETY ENGAGED IN BANKING BUSINESS. SECTION 194A D EALT WITH CO - OPERATIVE SOCIETY ENGAGED IN BUSINESS AS BANKING. WE FIND THAT THE ASSESSEE BANK IS COVERED BY THE PROVISIONS OF SUB - CLAUSE (B) OF CLAUSE (I) OF SEC.194A(3) AS WELL AS THE PROVISIONS OF CLAUSE (VIIA) OF SECTION 194(3)A WHICH ARE SPECIFIC IN NA TURE AND 194(3)(V) WHICH ARE GENERAL IN NATURE. WE FIND THAT THE HONBLE KERALA HIGH COURT IN THE CASE OF ITO& ORS. VS. THODUPUZHA URBAN CO - OPERATIVE BANK AND OTHERS HAVE FILED THE WRIT BEFORE THE HONBLE KERALA HIGH COURT, WHEREIN THE HONBLE HIGH COURT H AS HELD AS UNDER: THE INCOME TAX DEPARTMENT HAS COME UP WITH THIS APPEAL AGAINST THE JUDGMENT IN O.P. NO. 17082/1997.(THODUPUZHA URBAN CO - OPERATIVE BANK LTD., IN [1999]238 ITR630(KER). THAT PETITION WAS FILED BY FIVE CO - OPERATIVE SOCIETIES, WHEN THEY WER E FACED WITH A NOTICE FROM THE APPELLANT TO DEDUCT THE INCOME - TAX OUT OF THE INTEREST PAID BY THEM ON TIME DEPOSITS, IN RESPECT OF EVERY PAYMENT EXCEEDING RS. 10,000, AT THE RELEVANT POINT OF TIME. THE LEARNED SINGLE JUDGE AS PER THE IMPUGNED JUDGMENT, QUA SHED THE NOTICES HOLDING THAT GOING BY THE PROVISIONS CONTAINED IN SECTION 194A(3)(VIIA)(A) OF THE INCOME TAX ACT, FOR SHORT THE ACT ,THE WRIT PETITIONERS WERE NOT LIABLE TO DEDUCT INCOME - TAX AT SOURCE IN RESPECT OF THE INTEREST SO PAID, AS SUB - SECTION ( 3) EXEMPTS THEM FROM THE COVERAGE OF SUB - SECTION (1) OF SECTION 194A OF THE ACT. AGGRIEVED BY THE JUDGMENT, THIS APPEAL IS FILED ONLY AGAINST THE 4TH PETITIONER IN O.P. NO. 17082/1997 (SEE[199]238 ITR 630), NAMELY, THE THODUPUZHA URBAN CO - OPERATIVE BANK LTD. NO. 394, THODUPUZHA, IDUKKI DISTRICT, REPRESENTED BY THE SECRETARY. SUB - SECTION 3 OF SECTION 194A OF THE ACT MAKES IT CLEAR THAT 'THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY' IN RESPECT OF SEVERAL SITUATIONS MENTIONED UNDER THAT 17 CLAUSE. ADMITTEDLY, SUB - SECTION (1) OF SECTION 194A CAST THE LIABILITY ON ALL THOSE INSTITUTIONS OTHER THAN INDIVIDUALS AND HINDU UNDIVIDED FAMILY TO DEDUCT INCOME - TAX AT SOURCE, WHEN SUCH INSTITUTIONS PAY INTEREST ON DEPOSITS EXCEEDING THE PRESCRIBED LIMIT. SUB - S ECTION (3)(VIIA) READS AS FOLLOWS : SUB - SECTION 3 OF SECTION 194A OF THE ACT MAKES IT CLEAR THAT 'THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY' IN RESPECT OF SEVERAL SITUATIONS MENTIONED UNDER THAT CLAUSE. ADMITTEDLY, SUB - SECTION (1) OF SECTION 194A CAST THE LIABILITY ON ALL THOSE INSTITUTIONS OTHER THAN INDIVIDUALS AND HINDU UNDIVIDED FAMILY TO DEDUCT INCOME - TAX AT SOURCE, WHEN SUCH INSTITUTIONS PAY INTEREST ON DEPOSITS EXCEEDING THE PRESCRIBED LIMIT. SUB - SECTION (3)(VIIA) READS AS FOLLOWS : '(3) T HE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY (VIIA) TO SUCH INCOME CREDITED OR PAID IN RESPECT OF (A) DEPOSITS WITH A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CREDIT SOCIETY OR A CO - OPERATIVE LAND MORTGAGE BANK OR A CO - OPERATIVE LAND DEVELOPM ENT BANK; (B) DEPOSITS (OTHER THAN TIME DEPOSITS MADE ON OR AFTER THE 1ST DAY OF JULY, 1995) WITH A CO - OPERATIVE SOCIETY, OTHER THAN A CO - OPERATIVE SOCIETY OR BANK REFERRED TO IN SUB - CLAUSE (A), ENGAGED IN CARRYING ON THE BUSINESS OF BANKING;' THE RESULT WILL BE THAT INTEREST PAID ON TIME DEPOSITS BY A CO - OPERATIVE SOCIETY, OTHER THAN A CO - OPERATIVE SOCIETY OR BANK REFERRED TO IN SUB - CLAUSE (A), ENGAGED IN CARRYING ON THE BUSINESS OF BANKING WILL BE COVERED BY SUB - SECTION (1), AND THEREFORE, WIL L BE LIABLE TO DEDUCT INCOME - TAX. THE APPELLANT DOES NOT HAVE A CASE BEFORE US THAT THE 4TH PETITIONER, THE FIRST RESPONDENT HEREIN, DOES NOT COME WITHIN ANY OF THE TYPES OF CO - OPERATIVE SOCIETIES MADE MENTION OF IN SUB - CLAUSE (A) OF CLAUSE (VIIA) OF SU B - SECTION (3) OF SECTION 194A OF THE ACT. THEREFORE, IRRESPECTIVE OF WHETHER IT IS A TIME DEPOSIT OR ANY OTHER TYPE OF DEPOSIT, THE 4TH PETITIONER, FIRST RESPONDENT WILL NOT BE LIABLE TO DEDUCT INCOME - TAX, AS SUCH SOCIETY IS UNDER SUB - SECTION (3) TAKEN OUT OF THE PURVIEW OF SECTION 194A(1) OF THE ACT. THEREFORE, THE WRIT APPEAL FAILS, DISMISSED. W.A. NO. 2270 OF 1998: A READING OF THE IMPUGNED JUDGMENT DISCLOSES THAT THE WRIT PETITIONER, THE FIRST RESPONDENT, WAS CONCEDE TO BE AN AGRICULTURAL CO - OPERATIV E SOCIETY. CONSEQUENTLY, IT COMES WITHIN THE PURVIEW OF CLAUSE (VIIA)(A) OF SUB - SECTION (3) OF SECTION 194A OF THE INCOME - TAX ACT, 1961. NATURALLY, THE FIRST RESPONDENT - SOCIETY WILL NOT BE LIABLE IN TERMS OF SUB - SECTION (1) OF SECTION 194A. THE WRIT APPEAL FAILS, DISMISSED. FROM THIS ABOVE WE ARE OF THE VIEW THAT THE HONBLE HIGH COURT HAS INTERPRETED SECTION 194(V) AND 194(VA) OF SECTION 194A(3). NOW COMING TO CIRCULAR NO. 9/2002, ISSUED BY THE CBDT, WHICH IS RELIED UPON THE ASSESSEE. THE SAID CIRCUL AR SOUGHT TO INTERPRET THE DEFINITION OF MEMBER CLARIFIED THAT THE MEMBER DOES NOT INCLUDE THE NOMINAL MEMBER. IT WAS HELD BY THE BOMBAY HIGH COURT IN THE CASE OF JALGAON DISTRICT CENTRAL CO - OPERATIVE BANK LTD. & ANORS. VS. UNION OF INDIA 265 ITR 18 423, TH AT THE BOARD HAS NO POWER TO INTERPRET THE PROVISIONS OF LAW BY WAY OF CIRCULAR. THE ISSUE IN HAND OF HONBLE BOMBAY HIGH COURT WAS THE DEFINITION OF WORD MEMBER AS APPEARING IN CLAUSE - (V)OF SECTION 194A(3) AND POWER OF CENTRAL BOARD OF DIRECT TAX TO ISS UE CIRCULAR U/S 119 WHICH WOULD OVERRIDE OR DETRACT FROM THE PROVISIONS OF INCOME TAX ACT. THE CIRCULAR NO.9/2002 DATED 11.9.2002 ISSUED BY CBDT HAS BEEN QUASHED AND SET ASIDE BY HONBLE BOMBAY HIGH COURT. THEREFORE, CIRCULAR NO.9/2002 DATED 11.09.2002 ISS UED BY CBDT DOES NOT HELP TO THE CASE OF THE ASSESSEE. THE ASSESSEE RELIED UPON THE SAID CIRCULAR IS ILL FOUNDED. THE QUESTION BEFORE THE HONBLE BOMBAY HIGH COURT WAS NOT WHETHER A CO - OPERATIVE BANK NOT ENTITLE TO DEDUCTION OF TAX ON INTEREST PAID ON THE DEPOSITS WITH IT. TO UNDERSTAND THE LEGISLATIVE AMENDMENT IN THIS REGARD QUERY WHEREIN IN THE BUDGETS SPEECH OF FINANCE MINISTER AND HIS OBJECT FOR SUGGESTING TDS TO SUCH DEPOSIT IN FOLLOWING WORDS TO ENABLE THE GOVERNMENT TO IDENTIFY INCOME EARNERS, MO ST OF WHOM WOULD NOT OTHERWISE DECLARE THEIR INCOME OR WOULD NOT DECLARE THEIR FULL INCOME, I PROPOSE TO EXTEND THE SCHEME OF TAX DEDUCTION AT SOURCE TO COVER NEW AREAS OF PAYMENTS IN THE NATURE OF COMMISSIONS, INTEREST PAID BY BANKS ON TIME DEPOSITS AND W ITHDRAWALS FROM THE NATIONAL SAVINGS SCHEME. TO MINIMISE THE INCONVENIENCE FOR SMALL DEPOSITORS, TAX WILL BE DEDUCTED AT SOURCE ONLY IN RESPECT OF PAYMENTS IN EXCESS OF RS.2500 PER YEAR. THOSE RECEIVING PAYMENTS IN EXCESS OF THE LIMIT BUT NOT HAVING TAXABL E INCOME WILL HAVE THE FACILITY OF COLLECTING PAYMENT WITH NO TAX DEDUCTION BY FILING A DECLARATION IN THE PRESCRIBED MANNER. SUCH PROVISION RELATES TO TDS INTRODUCED BY FINANCE ACT. 1991. INVITED CONSIDERATION CRITICISM FROM TAXPAYERS, BANKERS ABOVE INC ONVENIENCE AND DIFFICULTY IN IMPLEMENTATION OF THIS PROVISIONS. THE FINANCE MINISTER IN HIS BUDGET SPEECH IN 1992 EXPRESSED THAT THE SYSTEM OF TAX DEDUCTION AT SOURCE IS A USEFUL TOOL AND ONE OF THE WELL RECOGNISED METHODS OF ENFORCING TAX COMPLIANCE IN M ANY COUNTRIES. HOWEVER, A HARASSED FINANCE MINISTER HAS TO BE SENSITIVE TO THE OPINIONS OF HONOURABLE MEMBERS OF PARLIAMENT EVEN WHEN THEY DIFFER FROM HIS OWN CONVICTIONS. HE ACCORDINGLY WITHDRAWN THE PROVISION RELATING TO DEDUCTION AT SOURCE IN RESPECT O F INTEREST ON TERM DEPOSIT WITH THE BANK AND COMMISSION W.E.F., JUNE 1992 . ACCORDINGLY, FINANCE ACT 1992 SUBSTITUTED A NEW CLAUSE (VII) W.E.F., 1 ST JUNE, 1992, SUB - SECTION 3 OF SECTION 194A FOR CLAUSE (VII) AND SOMEONE AS EARLIER INTRODUCED BY FINANCE NO.2 ACT W.E.F., 1 ST OCTOBER, 1991. THIS 19 AMENDMENT WAS MADE TO RESTORE THE POSITION AS WAS BEFORE 1 ST OCTOBER, 1991 IN RELATION TO DEDUCT TAX AT SOURCE IN THE CASE OF INCOME CREDITED OR PAID IN RESPECT OF DEPOSIT WITH A BANK COMPANY TO WHICH BANKING REGULATION ACT 1940 APPLIES OR WITH A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING, INCLUDING CO - OPERATIVE LAND MORTGAGE BANK OR CO - O PERATIVE LAND DEVELOPMENT BANK THIS WAS BROUGHT INTO W.E.F., 1.4.1992. FINANCE ACT 1995 W.E.F., 1 ST JULY 1995 AGAIN WITHDRAWN THE EXEMPTION FOR INTEREST ON TIME DEPOSIT PAYABLE BY BANK. THE AMENDMENT SECTION 194A NOW PROVIDES FOR DEDUCTION OF TAX AT SOU RCE AT THE RATE IN FORCE FROM PAYMENT FOR INTEREST EXCEEDING RS.10,000/ - IN A FINANCIAL YEAR ON TIME DEPOSITS MADE ON OR AFTER 1 ST JULY,1995 WITH A BANKING COMPANY OR WITH A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON BUSINESS OF BANKING. THE AFORESAID LIMI T OF RS.10,000/ - SHALL BE COMPUTED WITH REFERENCE TO THE INCOME CREDITED OR PAID BY BRANCH OF BANKING COMPANY OR CO - OPERATIVE SOCIETY AS THE CASE MAY BE. THE INTEREST ON TIME DEPOSIT MADE WITH A PRIMARY AGRICULTURAL SOCIETY OR A CREDIT SOCIETY OR A CO - OPER ATIVE LAND MORTGAGE BANK OR A CO - OPERATIVE LAND DEVELOPMENT BANK WILL NOT BE SUBJECT TO REQUIREMENT OF DEDUCTION OF TAX AT SOURCE. REFERENCE IN THIS CONNECTION MAY BE MADE TO CIRCULAR NO. 715 DATED 18 TH AUGUST, 1995 AND EXPLANATORY CIRCULAR NO. 717 DATED 14 TH AUGUST, 1995. THE FINANCE ACT 2001 BY AMENDMENT IN PROVISION TO SUB - SECTION (3) OF SECTION 194 HAS OMITTED THE PROVISION THEREIN PROVIDING THE SPECIFIC LIMIT OF RS.10,000/ - IN RESPECT OF TIME DEPOSIT MADE WITH BANKING COMPANY WITH RESERVATION THAT OVE RALL LIMIT OF RS. 5,000/ - PROVIDED IN MAIN PORTION OF SUB - SECTION 3 WOULD APPLY TO SUCH DEPOSIT W.E.F. 19 TH JUNE, 2001. FROM THIS ABOVE INTENTION OF LEGISLATURE WE ARE OF THE VIEW THAT IT IS CLEAR THAT ASSESSEE COMPANY A CO - OPERATIVE SOCIETY CARRYING ON A BUSINESS OF BANKING IS LIABLE TO MAKE TDS U/S. 194A. LEARNED AR HAS RELIED UPON THE DECISION OF INCOME TAX TRIBUNAL, BEANGLORE BENCH IN THE CASE OF BAGALKOT DISTRICT CENTRAL CO - OP. BANK VS. JOINT COMMISSIONER OF INCOME TAX, IN ITA NO.1572/BANG/2013, WHER EIN THE TRIBUNAL HAS INTERPRETED THE SECTION 194A(3)(V) WHICH GRANTS AN EXEMPTION FROM TDS TO SUCH INCOME CREDITED OR PAID BY THE CO - OPERATIVE SOCIETY. THEY HAVE INTERPRETED THE WORD MEMBER MENTIONED IN SECTION 194A(3)(V) OF THE ACT. THE TRIBUNAL HAS ALS O RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT AND THE CIRCULAR ISSUED BY CBDT AND THEY RELIED UPON CIRCULAR ISSUED BY CBDT FOLLOWING THE JUDGEMENT OF JALGAON DISTRICT CENTRAL CO - OPERATIVE BANK LTD. & ANORS. VS. UNION OF INDIA, THEY 20 WERE OF THE OP INION THAT THE CO - OPERATIVE BANK ARE NOT SUBJECT TO TDS UNDER 194A. WE DO NOT AGREE WITH THE FINDING OF ITAT, TRIBUNAL AS HONBLE KERALA HIGH COURT HAS OCCASIONED TO INTERPRET SECTION194A(3)(V) AND 194A(3)(VA) OF THE ACT. THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF ITO & ORS. VS. THODUPUZHA URBAN CO - OPERATIVE BANK, WHEREIN THEY HAVE CLEARLY DEFINED AND INTERPRETED THE SECTION IT APPEARS THAT THE BANK DID NOT CONSIDER THE PROVISION OF SECTION 194A(VIIA). THEREFORE, WHEN THERE IS A SPECIFIC PR OVISION, GENERAL PROVISION CANNOT BE APPLIED IN THE CASE OF THE ASSESSEE OTHERWISE THE PROVISION OF SECTION 194A (VIIA) WILL BECOME REDUNDANT. THE SECTION CANNOT BE READ IN THIS MANNER. FOR THE SAKE OF CLARITY, WE HAVE ANALYSE THE SECTION 194A(3)(V) AND ( VIIA) WHICH READ AS UNDER: (3) THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY - (I) 5 WHERE THE AMOUNT OF SUCH INCOME OR, AS THE CASE MAY BE, THE AGGREGATE OF THE AMOUNTS OF SUCH INCOME CREDITED OR P AID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE PERSON REFERRED TO IN SUB - SECTION (1) TO THE ACCOUNT OF, OR TO, THE PAYEE, DOES NOT EXCEED 6 TEN THOUSAND RUPEES................. (V) TO SUCH INCOME CREDITED OR PAID BY A CO - OPERATIVE SOCIETY 5 TO A MEMBER THEREOF OR] TO ANY OTHER CO - OPERATIVE SOCIETY; (VIIA) TO SUCH INCOME CREDITED OR PAID IN RESPECT OF, - (A) DEPOSIT WITH A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CREDIT SOC IETY OR A CO - OPERATIVE LAND MORTGAGE BANK OR A CO - OPERATIVE LAND DEVELOPMENT BANK; (B) DEPOSITS (OTHER THAN TIME DEPOSITS MADE ON OR AFTER THE 1 ST DAY OF JULY, 1995) WITH A CO - OPERATIVE SOCIETY, OTHER THAN A CO - OPERATIVE SOCIETY OR BANK REFERRED TO IN SUB - CLAUSE (A), ENGAGED IN CARRYING ON THE BUSINESS OF BANKING THE TDS ON TIME DEPOSITS IS DEALT IN CLAUSES (VII) & (VIIA) OF 194A (3) WHICH ARE EXTRACTED BELOW: (3) THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY (VII) : TO SUCH INCOME CREDITED OR PAID I N RESPECT OF DEPOSITS (OTHER THAN TIME DEPOSITS MADE ON OR AFTER THE 1ST DAY OF JULY, 1995) WITH A BANKING COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949) APPLIES (INCLUDING ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF THAT A CT); (VIIA) : TO SUCH INCOME CREDITED OR PAID IN RESPECT OF, (A) DEPOSITS WITH A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CREDIT SOCIETY OR A CO - OPERATIVE LAND MORTGAGE BANK OR A CO - OPERATIVE LAND DEVELOPMENT BANK; 21 (B) DEPOSITS (OTHER THAN TIME DEP OSITS MADE ON OR AFTER THE 1ST DAY OF JULY, 1995) WITH A CO - OPERATIVE SOCIETY, OTHER THAN A CO - OPERATIVE SOCIETY OR BANK REFERRED TO IN SUB - CLAUSE (A), ENGAGED IN CARRYING ON THE BUSINESS OF BANKING *EMPHASIZED+ FROM A PLAIN READING OF ABOVE CLAUSES, IT I S CLEAR THAT WHILE CLAUSE (VII) DEALS WITH INTEREST PAYMENT BY A BANKING COMPANY THE CLAUSE (VIIA) DEALS WITH INTEREST PAYMENT BY A CERTAIN CATEGORY COOPERATIVE SOCIETIES INCLUDING A COOPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING. IT IS ALSO CLEAR THAT, AS REGARDS A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING, THERE IS NO EXEMPTION FOR THE INTEREST PAYMENTS IN RESPECT OF TIME DEPOSITS MADE ON OR AFTER 01 - 07 - 1995. FURTHER,194A(3)(I) LAYS DOWN MONETARY LIMITS UP TO WHICH IS THERE IS NO REQUIREMENT OF TDS. THE SAID MONETARY LIMITS ARE DIFFERENT FOR DIFFERENT CATEGORY OF PAYERS. THE SAID CLAUSE IS REPRODUCED BELOW FOR THE SAKE OF CLARITY: 194A(3) THE PROVISIONS OF SUB - SECTION (1) SHALL NOT APPLY (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 LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE PERSON REFERRED TO IN SUB - SECTION (1) TO THE ACCOUNT OF, OR TO, THE PAYEE, [DOES NOT EXCEE D (A) TEN THOUSAND RUPEES, WHERE THE PAYER IS A BANKING COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949) APPLIES (INCLUDING ANY BANK OR BANKING INSTITUTION, REFERRED TO IN SECTION 51 OF THAT ACT); (B) TEN THOUSAND RUPEES, WHERE THE PAYER IS A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING [EMPHASIZED] (C) TEN THOUSAND RUPEES, ON ANY DEPOSIT WITH POST OFFICE UNDER ANY SCHEME FRAMED BY THE CENTRAL GOVERNMENT AND NOTIFIED BY IT IN THIS BEHALF; AND (D) FIVE THOUSAND RUPEES IN ANY OTHER CASE]:] FROM THE ABOVE IT IS CLEAR THAT, IN CASE OF A PAYER WHICH IS A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING, THE MONETARY LIMIT PRESCRIBED IS RS 10000/ - . ONCE THE INTEREST PAYMENT EXCEEDS THAT AMOUNT THE TDS IS TO BE MADE. NEIT HER IN CLAUSE (VIIA) NOR IN CLAUSE (I) THERE IS ANYTHING TO 22 RESTRICT THEIR APPLICABILITY ONLY TO NON - MEMBERS AND THEREFORE THEY APPLY TO ALL DEPOSITORS. GOING BY THE ABOVE UNDERSTANDING, THE CO - OP BANK IS REQUIRED U/S 194A(1) TO MAKE TDS FROM THE INTEREST PAID TO ALL DEPOSITORS. HOWEVER CO - OP BANK HOLDS THE VIEW THAT CLAUSE (VIIA) APPLIES ONLY TO NON - MEMBERS AND NOT TO THE MEMBERS. HOWEVER, ON PERUSAL OF CLAUSE (VIIA), NOTHING IN IT TO RESTRICT ITS APPLICATION ONLY TO NON - MEMBERS. THE STAND TAKEN BY CO - OP B ANK IS THAT THE INTEREST PAID TO MEMBERS IS EXEMPTED IN CLAUSE(V). THE APPELLANT IS PLACING RELIANCE ON CIRCULAR NO 9 OF 2002 IN ITS SUPPORT. IN THIS SCENARIO, THE MOOT QUESTION FOR CONSIDERATION IS: WHETHER, IN RESPECT OF INTEREST PAID ON TIME DEPOSITS BY A CO - OP BANK, THE CLAUSE(V) WHICH DEALS WITH COOPERATIVE SOCIETIES WILL APPLY OR THE CLAUSE (VIIA) WHICH MENTIONS SPECIFICALLY A CO - OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING FINDS APPLICATION? 2. LEGISLATIVE HISTORY OF TDS ON INTEREST: A. THE FINANCE ACT 1968, INSERTED CLAUSE (V) IN 194A(3) TO EXEMPT INTEREST PAID BY ON CO - OP SOCIETY TO ANOTHER CO - OP SOCIETY FROM TDS PURVIEW. B. THE FINANCE ACT 1970, INSERTED CLAUSE (VII) IN SECTION 194A(3) WHICH FOR THE FIRST TIME, CREATED A NEW TYPE OF CO - OP ERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING, AS DISTINCT FROM THE COOPERATIVE SOCIETY AS ENVISAGED IN CLAUSE (V). BY THIS AMENDMENT, A SPECIFIC SPECIE CALLED A COOPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING WAS CARV ED OUT OF THE GENUS COOPERATIVE SOCIETY MENTIONED IN CLAUSE (V). THE SCOPE OF THE ABOVE AMENDMENT IS EXPLAINED IN CIRCULAR NO 42 DATED 20 - 06 - 1970, WHOSE RELEVANT PORTION IS EXTRACTED BELOW: I AM DIRECTED TO INVITE A REFERENCE TO THE BOARDS CIRCULAR NO. 22/68 - IT(B) [F.NO. 12/23/68 - IT(B)], DATED 28 - 3/13 - 5 - 1968, AND TO SAY THAT THE FINANCE ACT OF 1970, HAS MADE AN IMPORTANT CHANGE IN SECTION 194A BY INSERTING A NEW CLAUSE (VII) IN SUB - SECTION (3) OF THAT SECTION. AS PER THIS CLAUSE, THE PROVISIONS OF SECTI ON 194A ARE NOT APPLICABLE TO INCOME BY WAY OF INTEREST CREDITED OR PAID IN RESPECT OF DEPOSITS WITH A BANKING COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 APPLIES (INCLUDING ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF THAT ACT), OR W ITH A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING (INCLUDING A CO - OPERATIVE LAND MORTGAGE BANK OR A CO - OPERATIVE 23 LAND DEVELOPMENT BANK). ALL SUCH BANKING INSTITUTIONS ARE, THEREFORE, NO LONGER REQUIRED TO DEDUCT TAX FROM INTEREST PA ID OR CREDITED TO THE ACCOUNTS OF A RESIDENT DEPOSITOR. (EMPHASIZED) FROM THE ABOVE CIRCULAR IT IS VERY CLEAR THAT, BY VIRTUE CLAUSE(VII), A CO - OP BANK IS EXEMPTED FROM MAKING TDS. C. THE FINANCE ACT 1971, WHICH INSERTED THE WORDS (TO A MEMBER THEREOF OR) IN CLAUSE (V) AND THE SAID AMENDMENT WAS DIRECTED ONLY AT THE GENERAL CO - OPERATIVE SOCIETY AND NOT AT THE SPECIFIC GENE I.E COOPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING. D. THE STAND OF APPELLANT IS THAT, EVEN AFTER INSERTION OF SPECI FIC CLAUSE(VII), THE GENERAL CLAUSE(V) WILL CONTINUE TO APPLY TO THE COOPERATIVE BANKS. IF THAT STAND IS ACCEPTED, THE COOPERATIVE BANKS WERE REQUIRED TO DEDUCT TAX FROM INTEREST PAID TO DEPOSITORS WHO ARE NOT ITS MEMBERS, RENDERING CLAUSE (VII) REDUNDANT. E. THE BY FINANCE ACT 1991, FOR THE FIRST TIME INTRODUCED TDS ON TIME DEPOSITS BY SUBSTITUTING ABOVE MENTIONED CLAUSE (VII) WITH TWO SEPARATE CLAUSES (VII) & (VIIA). WHILE CLAUSE (VII) APPLIED TO BANKING COMPANIES, CLAUSE (VIIA) APPLIED TO SPECIALLY CREAT ED CATEGORY OF COOPERATIVE SOCIETIES. THIS REAFFIRMS THE DECISION OF LEGISLATURE TO APPLY A SPECIFIC CLAUSE TO THE SPECIFIC GENRE COOPERATIVE SOCIETIES, WHICH WERE EARLIER CARVED OUT OF THE GENUS AS ENVISAGED IN GENERAL CLAUSE(V). THE EFFECT OF ABOVE AMEND MENT WAS EXPLAINED BY THE CBDT IN CIRCULAR NO 617 DATED 22 - 11 - 1991 WHERE IN IT IS CLARIFIED THAT: THE EFFECT OF THE AFORESAID CHANGE IS THAT INCOME - TAX SHALL NOW BE DEDUCTIBLE AT SOURCE FROM THE INTEREST INCOME ON THE DEPOSITS WITH. (I) A BANKING COMPANY, OR ( II) A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING, OTHER THAN A CO - OPERATIVE LAND MORTGAGE BANK, A CO - OPERATIVE LAND DEVELOPMENT BANK, PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CREDIT SOCIETY (EMPHASIZED) THE ABOVE CIRCUL AR CLEARLY STATES THAT, IT WAS ONLY BY INTRODUCTION OF CLAUSE (VIIA), A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING WAS BROUGHT UNDER THE PURVIEW OF TDS ON TIME DEPOSITS. THE TDS ON TIME DEPOSITS WAS WITHDRAWN VERY NEXT YEAR BY WAY OF SUBSTITUTI NG ABOVE MENTIONED CLAUSES (VII) & (VIIA) WITH A COMBINED CLAUSE (VII) AND STATUS QUO ANTE WAS RESTORED. 24 F. THE FINANCE ACT 1995 INSERTED CLAUSES (VII) & (VIIA) WHICH LAY DOWN THAT, THE EXEMPTION AS ENVISAGED IN 194A(3) IS NOT AVAILABLE IN RESPECT OF TIME DEPOSITS MADE ON OR AFTER 01 - 07 - 1995 WITH A BANKING COMPANY AND A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING. THIS POSITION OF LAW HAS BEEN EXPLAINED IN THE EXPLANATORY NOTES TO FINANCE ACT 1995, CONTAINED IN CBDT CIRCULAR NO. 717 DATED 14 - 8 - 1995 AS UNDER. PARA 46.2: THE (FINANCE) ACT AMENDS SECTION 194A OF THE INCOME - TAX ACT RELATING TO DEDUCTION OF INCOME - TAX AT SOURCE FROM INTEREST OTHER THAN INTEREST ON SECURITIES IN THE CASE OF RESIDENTS. THE AMENDMENT PROVIDES FOR DEDUCTION OF INCOM E - TAX AT SOURCE AT THE RATE IN FORCE FROM PAYMENT OF INTEREST EXCEEDING TEN THOUSAND RUPEES IN A FINANCIAL YEAR ON TIME DEPOSITS MADE ON OR AFTER 1ST OF JULY, 1995 WITH A BANKING COMPANY OR WITH A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING. (EMPHASIZED) THE ABOVE EXPLANATORY NOTE LEAVES NO DOUBT, WHATSOEVER, ABOUT THE APPLICABILITY OF CLAUSE (VIIA) TO A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING. 3.PRINCIPLE OF GENERALIA SPECIALIBUS NON DEROGANT THE HONBLE JURISDICTIO N HIGH COURT IN M.L.VASUDEVA MURTHY & SONS VS. JT. COMMISSIONER OF AG IT 65 TAXMAN 185(KAR) HAS OBSERVED THAT A SPECIAL PROVISION NORMALLY EXCLUDES THE OPERATION OF A GENERAL PROVISION . THE HONBLE SUPREME COURT IN THE, CASE OF SOUTH INDIAN CORPN. (P) LT D. VS. SECRETARY, BOARD OF REVENUE AIR 1964 SC 207 HAS HELD THAT A SPECIAL PROVISION SHOULD BE GIVEN TO THE EXTENT OF ITS SCOPE LEAVING THE GENERAL PROVISION TO CONTROL CASES WHERE THE SPECIAL PROVISION DOES NOT APPLY THEREFORE, IN TERMS CLAUSE (V) WHIC H IS GENERAL IN NATURE WILL NOT APPLY TO THE CO - OP BANK. THE PROVISIONS OF SECTION 194A (1)(VIIA) IS CLEARLY APPLICABLE AND THEREFORE THE ASSESSEE HAS TO DEDUCT T.D.S. ON INCOME CREDITED OR PAID IN RESPECT OF DEPOSITS EXCEPT WHICH FALLS UNDER THAT PROVIS IONS. WE THEREFORE, DISM ISS THE APPEAL OF THE ASSESSEE. 8 . BY RESPECTFULLY FOLLOWING THE ABOVE DECISION , WE HOLD THAT THE ASSESSEE IN THESE THREE ASSESSMENT YEARS HAS PAID INTEREST ABOVE 25 RS. 10,000/ - , TO EACH OF DEPOSITORS THEREFORE THEY ARE LIABLE TO DEDUCT TAX AT SOURCE AND THE ASSESSEE IS DEEMED TO BE DEFAULT. 9 . LEARNED AR HAS RELIED UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF JAGARAN PRAKASHAN VS. DCIT (TDS) REPORTED IN 345 ITR 288 WHEREIN THE HONBLE HIGH COURT H AS INTERPRETED THE PROVISIONS OF SEC. 4, 190, 191 & 201 OF THE ACT. WE HAVE GONE THROUGH THE DECISION OF THE HONBLE HIGH COURT AND WE FIND THAT THE HONBLE HIGH COURT HAS PASSED THIS ORDER IN A WRIT PETITION , THEREFORE THEY HAVE NOT LAID DOWN ANY LAW , HENCE, THIS JUDGMENT WILL NOT HELPFUL TO THE ASSESSEE . THE LEARNED AR HAS RELIED UPON A DECISION OF ITAT AGRA BENCH IN THE CASE OF ALLAHABAD BANK V. ITO IN I.T.A.NO. 448 TO 454/AGRA/2011 AND HE SUBMITTED THAT AS PER THE AB OVE JUDGMENT , IT IS THE DUTY OF ASSESSING OFFICER TO FIND OUT WHETHER THE ASSESSEE HAS DEDUCTED THE TAX AT SOURCE OR NOT. IF TAX IS NOT DEDUCTED AT SOURCE AND IF PAYEE HAS NOT ALREADY SHOWN IN HIS RETURN OF INCOME , THEN AND ONLY THEN THE ASSESSING OFFICER CAN BE HELD THE ASSESSEE IS LIABLE. THE LEARNED AR SUBMITTED TH A T TAX DEDUCTOR CANNOT BE TREATED AS ASSESSEE IN DEFAULT TILL IT IS FOUND THAT THE ASSESSEE HAS ALSO FAILED TO PAY SUCH TAX DIRECTLY . AS WE HAVE ALRE ADY HELD THAT IT IS THE DUTY OF THE ASSESSEE TO SHOW TO THE INCOME - TAX AUTHORITIES THAT THE PAYEE HAS ALREADY DECLARED THE IMPUGNED INTEREST IN HIS RETURN OF INCOME . A S PER 26 THE PROVISO U/S. 201(1) OF THE ACT WHICH WAS ADDED BY THE PARLIAMENT, IT IS CLEAR THAT IN THE EVENT OF PAYEE HAS ALREADY DECLARED IN HIS RETURN OF INCOME AND PAID THE TAXES , THEN THE DEDUCTOR CANNOT BE HELD TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH INCOME. IT IS THE DUTY OF THE ASSESSEE TO FILE A CERTIFICA TE TO THIS EFFECT FROM CHARTERED A CCOUNTANT IN SUCH FORM AS MAY BE PRESCRIBED . THEREFORE , WE ARE OF THE VIEW THAT THE ASSESSEE HAS TO PROVE THAT PAYEE HAS SHOWN INTEREST IN HIS RETURN OF INCOME AND PAID THE DUE TAXES ON THIS INCOME . THEREFORE , WE DO NOT AGREE WITH THE SUBMISSION S OF THE ASSESSEE IN THIS REGARD. 1 0 . RECENTLY , HONBLE HIGH COURT OF BOMBAY, BENCH AT AURANGABAD ON THE OCCASION TO INTERPRET IN SEC. 194 A OF THE ACT IN THE CASE OF THE MARATHAWADA URBAN BANK CO - OP ASSOCIATION LTD. VS. UNION OF INDIA AND OTHERS IN W.P. NO . 4935/2003 , HELD AS UNDER: - 4. WE HAVE GONE THROUGH THE SAID PROVISION AND THE IMPUGNED CIRCULAR. SECTION 194A MANDATES THAT ANY PERSON OTHER THAN AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY RESPONSIBLE FOR PAYING AN Y INCOME BY WAY OF INTEREST OTHER THAN INCOME BY WAY OF INTEREST ON SECURITIES AT THE TIME OF CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE, TO DEDUCT INCOME TAX THEREON AT THE RATES IN FORCE. BY VIRTUE OF SUB - SECTION (3) OF SECTION 194A, EXCEPTION IS CARVED OUT. THE FURTHER PROVISO TO SECTION 194A (3) CLARIFIES THE SITUATION AS TO HOW THE INCOME AND THE LIMITS OF THE INCOME AS DETAILED IN SECTION 194 (3) IS TO BE CONSTRUED. 5. SECTION 194A (3) DEALS WITH EXEMPTIONS. IT LAYS DOWN THAT UPTO AN AMOUNT OF RS.10,000/ - WHERE THE PAYEE IS A CO - OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING, THE PROVISIONS OF SECTION 27 194A , REQUIRING THE SAID CO - OPERATIVE SOCIETY DOING A BANKING BUSINESS TO DEDUCT TDS, WILL NOT APPLY. THE SAID PROVISION EXEMP TING OPERATION OF SECTION 194A (3) IS LIMITED TO THE EXTENT OF THE INCOME BEING PAID BY THE PAYEE TO THE EXTENT OF RS.10,000/ - AND NO FURTHER. RELIANCE PLACED BY THE LEARNED COUNSEL FOR THE PETITIONER ON SUB - CLAUSE (V) OF CLAUSE (III) OF SUB - SECTION (3) OF SECTION 194A IS MISPLACED. THE SAID SUB - CLAUSE (V) WOULD ONLY APPLY TO SUCH INCOME CREDITED OR PAID BY A CO - OPERATIVE SOCIETY TO A MEMBER THEREOF OR TO ANY OTHER CO - OPERATIVE SOCIETY. SUB - CLAUSE (VIIA) (A) AND (B) LAYS DOWN THE SPECIFIC CATEGORIES OF THE BANKS WHICH ARE EXEMPTED FROM DEDUCTING TDS. THE INCOME ACCRUED ON THE DEPOSITS OTHER THAN THE TIME DEPOSITS MADE AFTER 1ST DAY OF JULY, 1995 IS NOT EXEMPTED FROM DEDUCTING THE TDS BY URBAN CO - OPERATIVE BANK. SUBCLAUSE (VIIA) (A) DOES NOT INCLUDE URBAN CO - OPERATIVE BANK AND SUB CLAUSE (B) OF CLAUSE (VIIA) LIMITS THE EXEMPTION TO DEPOSITS OTHER THAN THE TIME DEPOSITS. 6. IT IS A SETTLED PROPOSITION OF LAW THAT VARIOUS SUB - SECTIONS IN A PROVISION HAVE TO BE READ IN HARMONY. A HEAD ON COLLISION BETWEEN SUB SECTIONS OF THE SAME PROVISION HAS TO BE AVOIDED. THEY CANNOT BE READ IN A MANNER WHICH WOULD RENDER ONE PROVISION SUPERFLUOUS OR A DEAD LETTER. READING CLAUSE (VIIA) AND CLAUSE (V) CONJOINTLY AND IN HARMONY, THE ONLY IRRESISTIBLE CONCLUSION THAT CAN BE DR AWN IS THAT INTEREST ABOVE RS. 10,000/ - CREDITED ON TIME DEPOSITS BY URBAN CO - OPERATIVE BANK IN THE ACCOUNT OF THE PAYEE WOULD BE LIABLE FOR DEDUCTION OF THE TAX AT SOURCE, MEANING THEREBY THAT AN INTEREST CREDITED BELOW RS.10,000/ - BY URBAN COOPERATIVE BA NK WILL NOT BE LIABLE FOR THE TAX DEDUCTED AT SOURCE. EVEN THE LEARNED ASSTT. SOLICITOR GENERAL CONCEDED TO THE POSITION THAT FOR AMOUNT BELOW RS.10,000/ - , TDS IS NOT REQUIRED TO BE DEDUCTED BY THE URBAN COOPERATIVE BANK. 7. THE CIRCULAR IMPUGNED DOES NO T CLARIFY THE AFORESAID ASPECT. THE CIRCULAR WILL HAVE TO BE READ IN A MANNER THAT IF THE AMOUNT MORE THAN RS. 10,000/ - IS CREDITED AS AN INTEREST ON TIME DEPOSITS, THEN THE URBAN COOPERATIVE BANK IS LIABLE TO DEDUCT THE TDS AS IS LAID DOWN IN SAID PROVISI ONS OF SECTION 194A AND THAT URBAN CO - OPERATIVE BANK IS NOT LIABLE TO DEDUCT TDS IF THE INTEREST ACCRUED ON TIME DEPOSITS IS LESS THAN RS. 10,000/ - . 8. WRIT PETITION ACCORDINGLY IS DISPOSED OF. RULE DISCHARGED. NO COSTS. 28 11 . OUR VIEW WAS CONFIRMED BY THE HONBLE BOMBAY HIGH COURT, THEREFORE, WE DISMISS THE GROUND THAT ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE . WE HOLD THAT IF THE AMOUNT MORE THAN RS. 10,000/ - IS CREDITED AS AN INTER EST ON TIME DEPOSITS, THEN THE U RBAN C O OPERATIVE BANK IS LIABLE TO DEDUCT THE TDS AS IS LAID DOWN IN SAID PROVISIONS OF SECTION 194A AND THAT URBAN CO - OPERATIVE BANK IS NOT LIABLE TO DEDUCT TDS IF THE INTEREST ACCRUED ON TIME DEPOSITS IS LESS THAN RS. 10,000/ - . GROUNDS NO. 14 TO 18: - 1 2 . SHORT FACTS OF THESE GROUNDS ARE THAT THE ASSESSEE HAS TAKEN THE CONTENTION THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY NOTICE FOR LEVY OF INTEREST U/S. 201(1) /201(1A) OF THE ACT. SEC. 201(1) & SEC. 201(1A) ARE BOTH SEPARATE PROCEEDINGS. THE INTEREST CA NNOT BE CHARGED WITHOUT GIVING NOTICE. THE ASSESSING OFFICER HAS NOT ASCERTAINED WHETHER THE ASSESSEE IS IN DEFAULT FOR INTEREST AMOUNT OR NOT, THEREFORE , APPEAL MAY BE ALLOWED. 1 3 . THE MATTER CARRIED TO THE LD. CIT(A) AND LD. CIT(A) HAS DISMISSED THE APPEAL HOLDING THAT THE INTEREST U/S. 201(1A) OF THE ACT IS MANDATORY IN NATURE . THEREFORE , THE TOTAL LIABILITY OF INTEREST WAS DISALLOWED. 29 1 4 . LEARNED AR SUBMITTED THAT THE INTEREST IS TO BE CHARGEABLE . LEARNED AR RELIED UPON THE DECISION OF SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (SUPRA) AND SUBMITTED THAT ASSESSEE HAS ALREADY PAID TAXES AND IF ASSESSEE PAID TAX ES , AGAIN HE CANNOT BE FOUND TO BE DEFAULT IN TAX . I F A SSESSEE DEDUCTED TAX AND INTEREST PAID U/S. 201(1A) OF THE ACT, IT HAS TO BE ALLOWED. LEARNED AR ALSO RELIED UPON THE ORDER OF SUPREME COURT IN THE CASE OF CIT VS. ELI LILLY & CO. REPORTED IN 312 ITR 225 AND SUBMITTED THAT SUPREME COURT HAS HELD THAT LEVY OF INTEREST U/S. 201 (1A) OF THE ACT IS MANDATORY . LIABILITY OF DEDUCTION OF TAX AT SOURCE IS A NATURE OF VICARIOUS LIABILITY AND INTEREST U/S. 201(1A) OF THE ACT CANNOT BE LEVIED UNLESS PERSON IS DECLARED AS ASSESSEE IS IN DEFAULT . THE PERIOD OF DEFAULT STARTS FROM THE DATE OF DEDUCTION TILL THE DATE OF ACTUAL PAYMENT. PAYMENT MADE BY THE CONCERNED EMPLOYEE CAN BE TREATED AS THE DATE OF ACTUAL PAYMENT. THE ASSESSING OFFICER HAS NOT VERIFIED THIS ASPECT, THEREFORE , MATTER MAY BE RESTORED TO THE ASSESSING OFFICER FOR VERIFICATION OF SHORTFALL OF DEDUCTION OF TAX AND CALCULATION OF INTEREST U/S. 201(1A) OF THE ACT. 1 5 . LEARNED DR HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE ASSESSING OFFICER FOR VERIFICATION OF THIS LIMITED FACT. 30 16 . WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT ASSESSEE IS LIABLE TO DEDUCT THE TAX AT SOURCE AND IF HE FAILED TO DO SO, A LEVY OF INTEREST U/S. 201(1A) OF THE ACT IS MANDATORY AND IN ABSENCE OF LIABILITY OF TAX WILL NOT BE DILUTE DEFAU LT . THE ASSESSEE IS LIABLE TO PAY THE INTEREST ONLY FROM THE DATE OF DEDUCTION TILL THE DATE OF ACTUAL PAYMENT. THE PAYMENT MADE BY THE CONCERNED PERSON IS THE DATE OF ACTUAL PAYMENT. SECONDLY, IF THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS DEDUCTED THE TAX AT SOURCE AND SUBMITTED CERTIFICATE FROM THE CHARTERED ACCOUNTANT IN ACCORDANCE WITH THE PROVISIONS OF SEC. 201 OF THE ACT AND IF IT SHOWS THAT THE INTEREST PAID BY THE ASSESSEE HAS BEEN ACCOUNTED FOR BY THE PAYEE IN HIS RETURN OF INCO ME , THEN THE ASSESSEE CANNOT BE HELD TO BE LIABLE. THEREFORE, WE R E VERSE THE FINDING OF LD. CIT(A) TO THAT EXTENT AND WE RESTORE BACK THIS ISSUE IN THESE THREE APPEALS I.E. I.T.A.NOS. 433 TO 435/PNJ/2014 FOR THE A.Y S . 2011 - 12 TO 2013 - 14 TO THE FILE OF ASSESSING OFFICER FOR LIMITED VERIFICATION AS PER THE DECISION S OF HONBLE SUPREME COURT IN THE CASE S OF ELI LILLY & CO. (SUPRA) & HINDUSTAN COCA COLA BEVERAGE P. LTD. (SUPRA) . THE ASSESSING OFFICER IS TO VERIFY THE ABOVE PAYMENT AS PER THE DECISIONS AND LIABILITY BE DECIDED ACCORDINGLY . WE PARTLY ALLOW THESE APPEALS. I.T.A.NOS. 37 TO 39/PNJ/2015 . 31 1 7 . THE ASSESSEE HAS FILED THE APPLICATIONS BEFORE THE LD. CIT(A) U/S. 154 OF THE ACT FOR A.YS. 2011 - 12 TO 2013 - 14 . AS WE HAVE ALREADY RESTORE D THE ABOVE MATTER S TO THE FILE OF THE ASSESSING OFFICER TO RECALCULATE THE INTEREST U/S. 201 OF THE ACT, THEREFORE , THESE APPEALS ARE DISMISSED. 1 8 . IN THE RESULT, APPEAL S IN I.T.A.NO S . 43 3 TO 435 /PNJ/2014 ARE STATISTICALLY ALLOWED AND THE APPEAL S IN I.T.A.NOS. 37 TO 3 9 ARE DISMISSED . ( ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH , 201 5 ). SD/ - SD/ - (P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20 TH MARCH , 201 5 . VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI .