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M/s. The LIC Employees Co-operative Bank Ltd. Versus The Assistant Commissioner of Income Tax, O/o. The Assistant Commissioner of Income Tax

2018 (2) TMI 876 - MADRAS HIGH COURT

TDS u/s 194(A)(1) - non deuction of tds on interest payments exceeding ₹ 10,000/- provisions under Section 40(a)(ia) invoked - assessee contended that the co-operative bank was not required to deduct tax at source from the payment of interest on time deposits of its members paid or credited before 01.06.2015 - Held that:- There has not been due application of mind to the stand taken by the petitioner in their reply dated 04.12.2017. The respondent has proceeded entirely on a different grou .....

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be deducted at source. - In fact, this very issue was considered in M/s The Coimbatore District Central Co-operative Bank case [2016 (1) TMI 370 - MADRAS HIGH COURT] . Respondent has not gone through the decision, copy of which was filed by the petitioner along with their reply to the show cause notice. The Assessing Officer was bound by the decision rendered by the jurisdictional High Court. It is stated that as on date there is no appeal by the revenue as against the decision in the case .....

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Ravi For the Respondents : Mr.J.Narayanasamy ORDER The petitioner is a co-operative society, namely, The LIC Employeers Co-operative Bank Ltd., registered under the provisions of the Co-operative Societies Act, 1983. The Co-operative Society has been formed for the welfare of the employees of the Life Insurance Corporation. In this writ petition, the petitioner is aggrieved by an assessment order dated 08.12.2017 for the assessment year 2015-2016 under Section 143(3) of the Income Tax Act, 1961 .....

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to file a detailed counter affidavit and arguments to be heard. 3.Both the submissions are not convincing for the reason that the respondent has ignored the decision of the Division Bench of this Court which is the jurisdictional Court within whose jurisdiction the respondent exercises its power. Secondly, if there is a palpable error apparent on the face of the impugned order which does not require a long drawn reasoning, this Court would be well within its jurisdiction to exercise its powers .....

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which appears to have been issued after perusal of the Profit and Loss account of the petitioner and it is stated that the petitioner had not deducted tax at source on interest payments exceeding ₹ 10,000/- as per Section 194(A)(1) read with Section 194A(i)(b) of the Act. Therefore the petitioner was directed to show cause as to why the provisions under Section 40(a)(ia) of the Act should not be invoked for non-compliance of TDS deduction. The petitioner in their reply stated that the ass .....

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urther stated that the petitioner assessee has two categories of membership, namely, one open to LIC employees only and second category is associate membership. Both categories of members can deposit money into the petitioner Society but loan can be availed only by the LIC employee members. Further, it was stated that the amendment to Section 194A expressly provide that from a prospective date i.e. 01.06.2015 exemption has been provided. In this regard, reference was made to the circular issued .....

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also explained apart from theory of prospectivity vs. retrospectivity. The petitioner Society encloses a copy of the explanatory note given by the CBDT, a copy of the decision in the case of Coimbatore District Central Cooperative Bank Ltd. and the orders passed by the ITAT in the assessee's own case for the assessment years 2009-2010, 2010-2011, 2013-2014 and 2014-2015. 7.On perusal of the impugned order, I find that there has not been due application of mind to the stand taken by the petit .....

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