2018 (7) TMI 1473 - AT - Income Tax

TDS u/s 194A - deductors had allowed substantial amount of interest to Primary Agricultural Societies and other Societies/Institution during the Financial Year 2012-13 and subsequent years who did not make TDS on such payments - assessee failed to furnish the documentary evidence in respect of submission of Form 15G/15H to concern CIT - provisions of Section 194A(3)(v) which applies to Co-operative Society - Held that - This issue is covered by the Tribunal s decision in assessee s own case for Assessment Year 2012-13 wherein held , it is evident that the assessee had received Form 15G/15H from all the persons to whom the interest was paid and the assessee had also sent these Forms to the Income Tax Department. Not sending these Forms Specifically to CIT, TDS is a mere technical breach. Therefore, the Ld. CIT(A) has rightly held that assessee was not required to deduct TDS on interest so paid, hence, the demand raised by the AO was accordingly deleted, which does not need any interference on our part - decided in favour of the assessee.

Summary

Issues:
- Application of Section 194A(3)(v) to a cooperative society engaged in banking business.
- Deletion of demand raised on account of short deduction of TDS and interest thereon where Form No. 15G/15H were not submitted to the CIT(TDS).

Analysis:
1. Application of Section 194A(3)(v) to a cooperative society engaged in banking business:
The appeals filed by the Revenue were against the common order passed by the CIT(A)-1, Gurgaon regarding TDS and interest under Section 194A(3)(v) of the Act. The issue revolved around whether a cooperative society engaged in banking business is exempt from deducting TDS under this section. The ITAT held that the provisions of this section give blanket exemption to the interest paid by any cooperative society to its members, without any discrimination based on the nature of the cooperative society. This interpretation was supported by a previous decision involving a cooperative bank. Consequently, the CIT(A) rightly followed this precedent and deleted the demand, leading to the dismissal of the appeals filed by the Revenue.

2. Deletion of demand due to non-submission of Form No. 15G/15H to the CIT(TDS):
The second issue pertained to the deletion of demand raised on account of short deduction of TDS and interest thereon where Form No. 15G/15H were not submitted to the CIT(TDS). The Assessing Officer had raised a demand based on the failure to furnish documentary evidence regarding the submission of these forms to the concerned CIT of the Income Tax Department. However, it was established that the forms were obtained from the recipients of interest payments and were sent to the Income Tax Department, albeit not specifically to the concerned CIT. The ITAT considered this as a mere technical breach, especially since the assessee, a cooperative bank operating in rural areas, was not fully aware of the jurisdictional details. As a result, the CIT(A) correctly ruled that the demand raised by the Assessing Officer should be deleted. The ITAT upheld this decision, citing lack of interference required on their part due to the factual and legal clarity presented.

In conclusion, the ITAT upheld the decisions of the CIT(A) in both issues, resulting in the dismissal of all appeals filed by the Revenue. The judgment reaffirmed the application of relevant sections and established precedents in determining the tax liabilities of cooperative societies engaged in banking activities and the submission requirements for Form No. 15G/15H.