2003 (7) TMI 49 - HC - Income Tax

Cooperative society deduction of the income-tax out of the interest paid by them on time deposits - respondent-society comes within the types of co-operative societies made mention of in clause (viia)(a) of sub-section (3) of section 194A Thus the respondent-society will not be liable in terms of sub-section (1) of section 194A - learned single judge as per the impugned judgment quashed the notices holding that going by the provisions contained in section 194A(3)(viia)(a) of the Income-tax Act 1961 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 order of learned single judge is justified

Summary

The High Court of Kerala ruled in favor of co-operative societies exempting them from deducting income tax on interest payments exceeding Rs. 10,000. The judgment was based on section 194A(3)(viia)(a) of the Income-tax Act, 1961. The court dismissed the appeals against the co-operative societies, stating they were not liable to deduct income tax at source.