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2015 (8) TMI 169 - AT - Income TaxTDS on interest paid on deposits by its members as per provisions of section 194A(3)(i)(b) - Appellant is a Cooperative Bank - assessee in default - Held that:- A plain reading of the provisions of Section 194A(3)(i)(b) above clearly indicates that exemption for interest paid by co-operative society engaged in banking business is exempt from deduction of tax at source up to an amount of ₹ 10,000/-. Therefore, exemption for interest is up to ₹ 10,000/-. Thus we can see a threshold limit of ₹ 10,000/- has been prescribed by the said provision, meaning any interest disbursal above ₹ 10,000/- attracts TDS. The ld. AR’s contention that since section 194A(3)(v) exempt any interest paid by co-operative society to its members irrespective of nature of deposit or amount, the action of the assessee society engaged in banking, not to deduct Tax at source is valid, is according to us not correct AR heavily relied on the CBDT circular (NO.9 dated 11.9.2002), to bolster his case, which cannot be countenanced because it is a trite law that CBDT circular cannot over-ride the prescription of statute passed by the parliament. And, there is no quarrel that assessee is a co-operative society engaged in banking business and the exemption for deducting tax at source for payment of interest is only up to ₹ 10,000/-. So the assessee had to deduct TDS for payment of interest above 10,000/-. In the said scenario, the ld CIT(A) has rightly confirmed the order of the ITO (TDS) and we do not find any infirmity in the said order. Therefore, we confirm the order of the ld. CIT (A). - Decided against assessee.
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