TMI Blog2016 (7) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... it case to be remitted to the file of the AO to verify the type of deposits. If it is found that it is not time deposit, exemption may be granted. Needless to mention that proper opportunity of hearing may be given to assessee. With regard to interest payment to the non- members, the assessee represented before the CIT (A) that assessee having obtained form 15G, no TDS should be deducted. It was also represented that as per the decision of the special bench of ITAT in the case of Merilyn Shipping & Transports (supra), the amount was already paid and not payable as on 31/03/2012, in which event, TDS provisions are not applicable. On careful perusal of the above two representations, we are of the view that if the assessee had collected for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is deductible on interest paid by a cooperative bank. 4. Aggrieved with the above order, the assessee preferred an appeal before the CIT (A). 5. Before the CIT (A), the assessee stated as under:- (a) That the interest paid to members by cooperative bank are exempt under 194A(3)(v) in accordance with the CBDT Circular No. 09/2002, dated 11/09/2002. (b) The interest paid of ₹ 1,52,36,988 consists of i. Interest of less than ₹ 10,000 paid to each person ₹ 64,89,904 ii. Interest of more than ₹ 10,000 paid to the shareholders ₹ 66,97,058 iii. Interest of more than ₹ 10,000 paid to the non-members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with Hon'ble AP High Court in the case of Janapriya Engineers Syndicate (pronounced on 24.06.2004). Since the entire amount of interest was paid and nothing was payable as on 31.03.2012 the provisions of TDS are not applicable therefore no disallowance can be made u/s. 40(a)(ia). Therefore these two grounds of appeal are allowed. 7. Aggrieved with the above order, the revenue is in appeal before us raising the following grounds of appeal:- 1. The Ld.CIT (A) erred both in law and facts of the case. 2. The Ld. CIT (A) erred in deleting the disallowance of ₹ 1,52,36,988/- made by invoking provisions of Section 40(a)(ia) of the I.T. Act. 3. The learned CIT (A) erred in deleting the disallowance of expenditure u/s. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lin Shipping Transporting, not considering the fact that said decision is placed under Interim Suspension by Hon'ble High Court of Judicature at Hyderabad for the State of Telangana and State of A.P. 6. Any other ground(s) that may be urged at the time of hearing. However, the appellant/AO raised before us only four grounds. Even though the revenue sought to file revised Form No. 36 on 20/01/2006, the revenue did not adhere to the directions given by the CIT. Ld. DR seeks further time to file revised grounds of appeal. However, in these circumstances of the case, we are of the view that by granting adjournment would amount to give premium to the casual approach of the AO and, therefore, we reject the request of the ld. DR. At an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a cooperative society] to any other cooperative society. 2. 194A(3)(viia), To such income credited or paid in respect of (a) deposits with a primary agricultural credit society or a primary credit society or a cooperative land mortgage bank or a cooperative land development bank. (b) deposits (other than time deposits made on or after the 1st day of July, 1995) with a cooperative society, other than a cooperative society or bank referred to in sub-clause (a), engaged in carrying on the business of banking. By reading the above sub-section 194A(3)(v), it is clear that it is applicable to the cooperative societies and not cooperative bank. In the present case, assessee is a cooperative bank. At the same time reading the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce as on 31/03/2012 so as to attract TDS provisions and, hence, the assessee cannot be said to be in default, so as to disallow the payment u/s. 40(a)(ia) of the Act. However, it deserves to be noticed that the Hon'ble Jurisdictional High Court had an occasion to consider the same issue (in the case of CIT v. Janapriya Engineers Syndicate order dated 24/06/2014) wherein the Court held that despite the decision of the special bench decision is upset by this High Court, the special bench verdict in Merilyn Shipping Transports case is binding on the ITAT due to judicial discipline. Under these circumstances, we follow the decision of the special bench. Since it is binding on all the benches of ITAT, going by the rule of judicial discipl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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