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2022 (8) TMI 778 - AT - Income TaxTDS on interest u/s 194A - addition made u/s 40(a)(ia) - Exemption to cooperative society from deducting TDS - non-deduction of TDS on interest paid on deposit received from the nominal members of the society - HELD THAT:- Whether a nominal member, who is not a registered member of the society, can be treated as a member of the cooperative society whether the exemption is available under clause (v) of sub-section (3) of section 194A - There is no dispute as to the fact that the above categories of persons mentioned above are nominal members of the societies as per bye-laws of the appellant society. The provisions of Maharashtra Cooperative Societies Act also permit admission of such nominal members. The term “member” has been defined by the Maharashtra Cooperative Societies Act to include a nominal members. The Hon”ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. [2021 (1) TMI 488 - SUPREME COURT] which dealt with the exemption u/s 80P in respect of society registered under the provisions of Kerala Cooperative Societies Act, while interpreting the term “member” of society after making reference to the judgement of the Hon”ble Supreme Court in the case of U.P. Co- op. Cane Union Federation Ltd. [1997 (1) TMI 7 - SUPREME COURT] In the present case also, the provisions of Maharashtra Cooperative Societies Act provides that the members includes nominal members and, therefore, we do not see any reason as to why the exemption under clause (v) of sub-section (3) of section 194A of the Act cannot be given in the case of members referred to above. Therefore, the reasoning of the lower authorities cannot be appreciated in the eyes of law. Accordingly, the orders of the lower authorities are hereby reversed and direct the Assessing Officer to delete the addition made u/s 40(a)(ia) of the Act for non-deduction of TDS on interest paid on deposit received from the nominal members of the society. Appeal of assessee allowed.
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