TMI Blog2012 (9) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... e Kerala Co-operative Societies Act), it will be open for the respondents to proceed with further steps in connection with the requirements of Section 194A and Section 200(3) of the Act. - W.P.)Nos.14226,14846,15191, 15286, 15330, 15736,15790, 16188, 17189, 17386, 17387 & 17653 OF 2012 - - - Dated:- 14-9-2012 - P.R. RAMACHANDRA MENON, J. For the Petitioner : Advs.Sri.T.M.Sreedharan (Sr.), Smt. Nisha John, Sri. V.P. Narayanan And Smt.Boby M.Sekhar For the Respondent : Senior Government Pleader Smt.Shoba Annamma Eapen And Advs.Sri.P.K.Ravindranatha MENON (Senior) And Sri.Jose Joseph, Sc, Income Tax ORDER The petitioners are Primary Co-operative Societies/Primary Agricultural Credit Societies, who are aggrieved of the notices issued by the concerned Income Tax Officer (TDS) asking: (1) to comply with the statutory requirements under Section 200(3) of the Income tax Act, submitting a statement in the Form 24Q/26Q/27Q as applicable; (2) to furnish a list showing interest credited/accrued in excess of ₹ 5000/- ( individuals and other than individuals) during the financial year 2010-11 and 01.04.2011 to 31.12.2011 for verification and (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication. Your are also requested to furnish copies of provisional receipt issued by the NSDL office regarding receipt of quarterly TDS statements for the last three Quarters of F.Y.2011-12 viz. 24Q,26Q and 27Q and copies of Form No.16 and 16A issued by the Bank for the Financial year 2010-2011. It is also requested that please produce copy of acknowledgement for Income Tax Return of the Bank filed and P I Account and Balance sheet and annexures thereto for the F.Y. 2010-2011 relevant to the Assessment Year 2011- 2012. You are requested to appear before me either in person or through an authorized representative with the details mentioned above in my office at Aayakar Bhavan, English Church Road, Palakkad on 22.02.2012 at 2.15 PM. Please ensure compliance. 5. The learned Sr. Counsel Mr. T.M. Sreedharan appearing for the petitioners/Soceity in W.P.(C) 14226 and 15191 of 2012 submits that the petitioners in the said two cases do not have any objection at all with regard to the requirement in the 'first' and 'third' paragraphs of the notice; whereas the objection is only with respect to the general information sought for, as to furnishing of a 'l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Counsel for the petitioners in the other writ petitions, while supporting the submissions of the learned Sr. Counsel who appeared for the petitioners in W.P.(C)Nos.14226 of 2012 and 15191 of 2012 as aforesaid, have advanced another submission as well, to the effect that the concerned petitioners/ Societies are Primary Agricultural Credit Societies/ Service Co-operative Societies as defined under Section 2(oa) of the Kerala Co-operative Societies Act and are taken care of by the definition of the term 'co-operative Society' as given under Section 2(19) of the Income Tax Act. A certificate to this effect as to the classification/registration of the Society as a Primary Agricultural Credit Society has been produced in some writ petitions. Based on the said status, it is contended that such Societies stand specifically excluded from effecting any TDS by virtue of clear stipulation under Section 194A(3)(viia) (a) of the Act. This being the position, they are not supposed to effect any TDS in respect of the interest credited to the accounts of the members and hence are not supposed to comply with the requirements under Section 200(3) of the Act or such other provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as a Primary Agricultural Credit Societies. 9. Reference is also made to the amended definition of the term 'Primary Agricultural Credit Society' as given under Section 2(oa) of the Kerala Co-operative Societies Act, whereby a 'proviso' was added as per the amendment brought about in the year 2010 (as per Act 7 of 2010). As per the amended provision (second proviso), it is stipulated that, if the principal object is not fulfilled, such societies shall lose all characteristics of a Primary Agricultural Credit Society, as specified in the Act, Rules and Bye-laws except the existing staff strength. Thus, merely for the reason that a Society happens to be classified or registered as an Agricultural Credit Society, that by itself is not enough to claim the benefit under the Income Tax Act and such Society has to continue to meet the obligation for which it was constituted, i.e., the principal object should be fulfilled throughout, by providing agricultural credit activities and providing loans and advances for agricultural purposes. 10. The learned Counsel for the petitioners submits that the very constitution of the Society, the scope of enactment, particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts is not a statutory requirement and as such, any additional work cannot be thrust upon the petitioners Societies, who are virtually functioning on the strength of minimum staff and who find it difficult to engage or deploy the service of any other staff, so as to cater to the requirements of the Income Tax Department, to make things easy for them, that too, without any statutory backing. Appointment of any additional hands to do such work is not permissible and even if allowed, it may have a bearing on the classification of the Society, as to the staff strength inviting such other adverse circumstances and hence not possible to be pursued. 12. During the course of hearing, the learned Standing Counsel for the respondents submits that notices issued by the Department earlier seeking for the particulars of the deposits generating interests of more than ₹ 5000/- and also seeking for some other details, referring to the penalty provisions, had come up for consideration before this Court in W.P.(C)No.4605 of 2010 and connected cases, wherein interference was declined and all the writ petitions were dismissed as per the judgment reported in [(2010) 329 ITR 609 (Ker.)] (Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the requirement under Section 200(3) of the Income Tax Act, the liability to submit the particulars in the relevant Form (i.e. 24Q, 26Q and 27Q) is mulcted only upon the persons, who are actually liable to deduct the tax at source as provided under Section 194A of the Income Tax Act. By virtue of the mandate under Section 194A(3)(viia) (a) of the Act, the said provision is not applicable in respect of deposits with Primary Agricultural Credit Societies or Primary Credit Societies or Co-operative Land Mortgaged Banks or Co- operative Land Development Banks. The question is whether the petitioners are entitled to have the benefits thereunder. 15. True, there is a reference to the Banking Regulation Act, 1949, as given in sub section (4) of Section 80P of the Income Tax Act. A society claiming the benefit of exemption under Section 80P has necessarily to satisfy the requirements and specifications of a Primary Agricultural Credit Society as defined under the Banking Regulation Act. But coming to the instant cases and the impugned notices, the position is something else. The cause is not with regard to the claim for exemption, but in respect of alleged necessity to have effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he requirements of Section 200(3) as well, if they succeed. 17. As held already, it is for the petitioners to establish their status as Primary Agricultural Credit Societies by obtaining and producing the relevant certificate from the competent authority, as mentioned hereinbefore. It is also open for the petitioners to opt to produce the relevant records before the Income Tax authorities as well, to establish their status and credentials, that there is no lapse in fulfilling the objective as Primary Agricultural Credit Societies so as to absolve from further proceedings at the hands of the Income Tax Department, in relation to Section 194A and Section 200(3) of the Act. So as to enable the petitioners to pursue such exercise, further proceedings shall be kept in abeyance for a period of three months from the date of receipt of a copy of the judgment. If the petitioners fail to produce the certificates in the manner as specified hereinbefore (with reference to the 'second proviso' to Section 2(oa) of the Kerala Co-operative Societies Act), it will be open for the respondents to proceed with further steps in connection with the requirements of Section 194A and Section 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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