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2015 (3) TMI 882 - AT - Income TaxNon deduction of tax at source on the payment of interest on the deposits to members of cooperative society - AO initiated proceedings against the Assessee u/s. 201(1) & u/s.201(1A) - Held that:- The Bangalore Bench of ITAT in the case of Bagalkot District Central Co-op Bank, Vs. JCIT (2015 (1) TMI 1005 - ITAT BANGALORE] held that cooperative societies carrying on banking business while paying interest to members on time deposits and deposits other than time deposits need not deduct tax at source u/s.194-A of the Act by virtue of exemption granted u/s.194A(3)(v) of the Act. Also in the case of The Visakhapatnam Cooperative Bank [2011 (8) TMI 319 - ITAT VISAKHAPATNAM ] has held that co-operative societies carrying on banking business when it pays interest to its members on deposits it need not deduct tax at source in view of the provisions of Sec.194A(3)(v) of the Act. Similar view has also been expressed by the Pune Bench of the ITAT in the case of Ozer Merchant Co-operative Bank [2015 (3) TMI 919 - ITAT PUNE]. 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-a-vis Sec.194A(3)(v) of the Act. It is thus clear that the preponderance of judicial opinion on this issue is that co-operative societies carrying on banking business when it pays interest to its members on deposits need not deduct tax at source in view of the provisions of Sec.194A(3)(v) of the Act For the reasons given above, we hold that the Assessee which is a co-operative society carrying on banking business when it pays interest income to a member both on time deposits and on deposits other than time deposits with such co-operative society need not deduct tax at source under section 194A by virtue of the exemption granted vide clause (v) of sub-section (3) of the said section - Decided in favour of assessee.
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