TMI Blog2015 (8) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the factual matrix, it is seen that the record shows that the assessee through its Branch Manager has filed written submissions on 07.05.2013 claiming that every taxpayer is a member of Almora Urban Co-operative Bank Ltd. These facts need verification. The legal issue having been decided in favour of the assessee, on facts we restore the issue back to the file of the AO for this limited purpose - Decided in favour of assessee for statistical purposes. - ITA No. 5324/Del/2013 - - - Dated:- 10-6-2015 - Diva Singh, JM And J S Reddy, AM,JJ. For the Appellant : Shri K R Rastogi, CA For the Respondent : Ms Y Kakkar, DR ORDER Per Diva Singh,JM. By the present appeal, the assessee assails the correctness of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the applicability of provision of section (1). Clause (v) of sub-section (3) of section 194A of the I.T. Act, it was submitted grants an exemption from tax deducted at source to such income credited or paid by a co-operative society to a member thereof or to any other co-operative society. Thus it was submitted that as per the provisions of section 194A(3)(v) of the I.T. Act the provisions relating to tax deducted at source are inapplicable to the income credited or paid by the cooperative societies to the member thereof. In the present case every depositor it was submitted is a member of the Almora Urban Co-operative Bank Limited and hence any income paid or credited to the member on deposits was claimed to be exempt from the deduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its order dated 28.08.2013 which has been referred to and followed by the Banglore Bench of the Tribunal in Bagalkot District General Co-operative Bank vs JCIT (cited supra). Accordingly relying on the orders of Kashipur Urban Co-operative Bank Ltd., vs Income Tax Officer, ITA No.-5329/Del/2013; Bagalkot District General Co-operative Bank vs JCIT, Bijapur, Range-Bijapur [2014] 48 Taxman.com 117 (Banglore Tribunal); Sh. Vijay Mahantesh Co-operative Bank Ltd, College Road, Bagalkot vs JCIT (Bijapur Range-Bijapur) in ITA No.- 434/Bang./2013; ITO (TDS) vs the Hubli Urban Co-operative Bank Ltd., Hubli in ITA No.-1191 to 1194/Bang./2014; and ACIT, Circle-1, Nashik vs Ozer Merchant Co-operative Bank Ltd. [2014] 41 Taxmann.com 110 (Pune Tribunal), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that section. Clause (v) of section 194A(3), on which reliance was placed by the assessee, reads as under: To such income credited or paid by a cooperative society to a member thereof or to any other cooperative society. On a plain reading of the section 194A(3)(v), we notice that the said section provides blanket exemption to the interest paid by any cooperative society to its members. The term Cooperative Society has been defined u/s 2(19) of the Act as under: Cooperative Society means a cooperative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of cooperative societies. It can be seen that neither sec. 2(19) n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by Pune ITAT SMC in the case of Bhagani Nivedita Sahakari Bank Ltd. (supra). In our view the Hon'ble Bombay High Court in the case of Jalgaon District Central Cooperative Bank Ltd. 's case (supra) was dealing with a case of challenge to para-3 of CBDT Circular No.9 dated 11.9.2002 which tried to interpret the word member as 'given in Sec. 194A(3)(v) of the Act. It is only that part of the circular that had been quashed by the Hon'ble Bombay High Court and the other paragraphs of the Circular had no connection with the issue before the Hon'ble Bombay High Court. How could it be said that the entire circular has been quashed by the Hon'ble Bombay High Court? In our view para-2 of the Circular still holds good an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with such co-operative society need not deduct tax at source under section 194A by virtue of the exemption granted vide clause (v) of sub-section (3) of the said section. 6.2. In view of the above, we find that the issue has to be decided in favour of the assessee following the judicial precedent cited. Considering the factual matrix, it is seen that the record shows that the assessee through its Branch Manager has filed written submissions on 07.05.2013 claiming that every taxpayer is a member of Almora Urban Co-operative Bank Ltd. These facts need verification. The legal issue having been decided in favour of the assessee, on facts we restore the issue back to the file of the AO for this limited purpose. Accordingly the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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