Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 205 - AT - Income TaxTaxability of trust - liability to deduct TDS u/s 194A - receipt of interest income - whether the assessee's income was exempt under sections 10(25) and 10(23AAA)? - Held that:- The Punjab State Cooperative Bank Pension Fund and Board of Trustee Provident Fund are approved trusts created by assessee for the purpose of pension fund and Provident Fund respectively. Assessee has also enclosed copies of returns filed for assessment year 2012-13 in the case of Punjab State Cooperative Bank Pension Fund and Board of Trustee, Provident Fund. These entities have duly filed returns of income under section 139(1) of the Act. On perusal of the same, it is evident that whole of their income was exempt under sections 10(25) and 10(23AAA) of the Act. Therefore, there was no liability in respect of these trusts, warranting tax deduction at source under section 194A of the Act. Consequently, the orders passed under sections 201(1) and 201(1A) of the Act are liable to quashed in the facts and circumstances of the case. Assessee had furnished a certificate issued by the Chairman of Board of Trustees, Punjab State Cooperative Bank Ltd., Pension Fund, stating that they are in receipt of an amount as interest on term deposit with the assessee bank and the same was duly accounted in its books of account and the return of income has been filed for the relevant assessment year. Similar certificate is also issued by Punjab State Cooperative Bank, Provident Fund Trust. Therefore, it is evident from the certificates that these two entities who are in receipt of interest income from the assessee had duly accounted the same in their books of account and filed their return of income for the concerned assessment year. Hon'ble Apex Court in the case of Hindustan Coca-cola Beverages (P) Ltd. (2007 (8) TMI 12 - SUPREME COURT OF INDIA) had held that the recovery of tax cannot be made from the deductor when the deductee had filed the return and paid the tax on the same. - Decided in favour of assessee TDS u/s 194A - interest paid to Housefed Punjab and KRIBHCO - Held that:- On reading the memorandum of Finance Bill, 2015, it is clear that the exemption provided under section 194A(3)v) of the Act with regard to deduction of tax at source from interest payment by a cooperative society to another cooperative society existed before the amendment, and continue to apply to the cooperative bank even after the amendment. It was made further clear that such exemption to cooperative bank is available only when the depositor is a cooperative society. In the instant case, Housefed Punjab and KRIBHCO are cooperative societies who are members with the assessee society and interest received by them was exempted for tax deduction at source under section 194A(3)(v) of the Act. Hence, as rightly pointed out by the CIT (Appeals), the assessee was not liable under section 201(1) of the Act as an assessee in default for not deducting the tax under section 194A of the Act and consequently, interest under section 201(1) of the Act cannot also be levied. - Decided in favour of assessee
|