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2019 (12) TMI 775 - HC - Income TaxBenefit of exemption u/s 194A(3)(iii)(a) on interest by the CO-OPERATIVE BANK to the Primary Agricultural Credit Societies - HELD THAT:- Requirement of deduction of tax at source does not prejudice the writ petitioner assessee, since the tax amounts deducted at source from the payments effected to the petitioner societies would be credited to their account with the Income Tax Department, and adjusted towards any tax liability determined against them in their assessment for the respective years. In the event the petitioner societies succeed in establishing before the Income Tax authorities that they do not have any income liable to tax under the Act, then they would be entitled to a refund of the tax amounts so deducted pursuant to a finalization of their assessments under the Income Tax Act. Alternatively, the petitioners societies also have the option of approaching the Income Tax Department for a certificate u/s 197. Stating that, in view of their non-liability to tax under the Act, there need be no deduction of tax effected at the time of making payments to them. This aspect has been made clear in the circular of the Treasury department impugned in these writ petitions. In the result, these writ petitions are disposed by declaring that, in the case of deposits made by the petitioner societies with the Co-operative Banks, they would be entitled to the benefit of exemption under Section 194A(3)(iii)(v) and, in respect of the deposits made by the petitioner societies with the Treasury, they will not be entitled to the benefit of exemption under Section 194A(3)(iii)(a)
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