TMI Blog2015 (7) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) & 201(1A) of the Act. - Decided in favour of assessee. - ITA Nos. 312 to 315/PNJ/2014 - - - Dated:- 16-6-2015 - SHRI GEORGE MATHAN AND SHRI N.K. BILLAIYA, JJ. For the Appellant : Shri Ashok A. Kulkarni-Adv. For the Respondent : Shri Mehbob Ali Khan -DR ORDER PER N.K. BILLAIYA These appeals by the assessee against the four separate orders of Ld. CIT (A), Belgaum, each dated 04/06/2014 pertaining to A.Ys. 2010-11 to 2013-14. All these appeals have a common grievance and, therefore, they were heard together and disposed of by this common order for the sake of convenience and brevity. 2. All these appeal are late by 25 days. The assessee has filed an affidavit stating cause for the delay. 3. We have careful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Bhagini Nivedita Sahakara Bank Ltd. Vs. ACIT (87 ITD 569), the Assessing Officer computed the liability of the assessee u/s. 201(1) 201(1A) of the Act. 6. Aggrieved by this, assessee carried the matter before the Ld.CIT(A) and reiterated its claim that the Assessing Officer has relied upon wrong decisions referring to its own orders for the A.Y. 2002-03. It was pointed out to the Ld. CIT(A) that the then Ld. CIT(A) has allowed the assessee s appeal based on the decision of Jalgaon District Central Co-op Bank Ltd. another Vs. Union of India (265 ITR 423). After considering the facts and the submissions of the Ld. CIT(A) at para 6.3 has observed as under:- 6.3 Now coming to the circular No. 9 of 2002 issued by the CBDT re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer made u/s. 201(1) 201(1)(A) of the Act. 7. Aggrieved by this, the assessee is before us. 8. At the very outset, counsel for the assessee drew our attention to the memorandum explaining the provisions in the Finance Bill 2015. The relevant portion of which reads as under:- Section 194A(1) read with section 194A(3)(i) of the Act provide for deduction of tax on interest (other than interest on securities)'over a spec-ified threshold, i.e., ₹ 10,000 for interest payment by banks, co-operative society engaged in banking business (co-operative bank) and post office and ₹ 5,000 for payment of interest by other persons. Further, sub-section (3) of section 194A, inter alia, also provides for exemption from d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all co-operative societies from deduction of tax on payment of interest to members. The matter has been carried to judicial forums and in some cases a view has been taken that the provisions of section 194A(3)(viia)(b) of the Act makes no distinction between members and non-members of co-operative banks for the purposes of deduction of tax, hence, the co-operative banks are required to deduct tax on payment of interest on time deposit and cannot avoid the same by taking the plea of the general exemption provided under section 194A(3)(v) of the Act. This is because the specific provision of tax deduction provided under section 194A(3)(i)(b) and 194A(3)(viia)(b) of the Act for co-operative banks override the general exemption provided to all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly clear that the impugned provision was not applicable during the years under appeal and it is clear that the provisions are applicable w.e.f. 01/06/2015. Counsel further drew our attention to the Circular No. 9 of 2002 of the CBDT and stated that the Board has clarified that the provisions of TDS are not enforceable in respect of interest paid by the cooperative society/bank to its Members, but tax deducted at source is to be deducted from the interest paid to the non-members. 9. Per contra, learned DR strongly supported the order of the Assessing Officer. It is the say of the DR that the amendment is only of clarificatory in nature. Learned DR further pointed out that the Circular 9 of 2002 has been withdrawn by the CBDT as it has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... algaon District Co. Bank (supra) shows that the Hon ble High Court has held that the impugned notification issued by the CBDT which is in the form of a clarification with regard to the rights and privileges of a duly registered member and nominal member is outside the scope of sec.119 of the Act. The Hon ble High Court further held that the CBDT cannot issue a circular u/s. 119 of the Act which would override or retract from the provisions of Income-tax Act, 1961. Thus, the observations of the Hon ble High Court were more towards the clarification regarding member and nominal member. Considering all the facts in totality in the light of the memorandum explaining the provisions in the Finance Bill 2015 (supra) and the clarification by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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