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2022 (12) TMI 211 - AT - Income TaxTDS u/s 194A - Addition u/s 40(a)(ia) interest payment - disallowance non-deduction of TDS regarding payments made to members /non-members - distinction between members and nominal-members - HELD THAT:- We find no merit in the Revenue’s instant arguments as we are in assessment year 2010-11 whereas “a cooperative bank” has been excluded from the purview of section 194(A)(3)(v) vide Finance Act 2015 w.e.f. 01.06.2015 only. This tribunal’s Special Bench decision is The Virudhunagar Central District Co-Operative Bank Ltd. [2018 (10) TMI 1170 - ITAT CHENNAI] has followed hon’ble Madras high court’s judgment M/s. Coimbatore District Central Co-Operative Bank Ltd. [2016 (1) TMI 370 - MADRAS HIGH COURT] while adjudicating the very issue against the department. This is coupled with the fact that hon’ble jurisdictional high court in Central Co-operative Bank Ltd., V/s Union Of India [2003 (9) TMI 56 - BOMBAY HIGH COURT] has quashed the CBDT’s circular dated 11.09.2002 as ultra vires violating section 119 of the Act. Their lordship’s further decisions in The Bailhongal Urban Cooperative Bank Ltd., V/s. CIT [2015 (12) TMI 1659 - KARNATAKA HIGH COURT] and in Saraswat co-operative Bank [2017 (3) TMI 741 - BOMBAY HIGH COURT] take note of forgoing legislation developments to hold that a co-operative bank/ assessee has no liability to deduct TDS on interest payments made to members. We thus delete the impugned section 194A r.w.s. 40 (a)(ia) disallowance of Rs. 2,00,095/- in very terms therefore. The assessee’s sole substantive grievance is accepted therefore.
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