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TMI Blog2022 (2) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... al by the appellant/assessee is allowed, impugned order is set aside and the matter is remanded to the Tribunal for fresh consideration. We make it clear that we have not ventured into the merits of the matter nor we have made an attempt to answer the substantial questions of law and we have disposed of this appeal by following by our earlier judgment in T.C.A. No. 682 of 2018 dated 03.07.2019 and the Tribunal to take a decision in accordance with law. No costs." Similar are the observations in TCA No. 682 of 2018. 3. The first issue in these appeals is as regards to distribution of surplus among its members i.e., members of Self Help Groups. For this, the assessee has raised following Ground No. 3:- "3. The Commissioner of Income tax (Appeals) erred in verifying the facts present in the Trust deed and the Rules and Regulations framed and concluded that the share of the appellant trust in indeterminate or unknown and that maximum marginal rate of tax as provided in Section 164(1) had to be applied to the entire income." 4. At the outset, the ld. counsel for the assessee stated that the issue is covered by the Co-ordinate Bench decision in assessee's own case by following o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le on the individual members of that SHG. The assessee SMBTs are getting funds from SNBFCL at 12 per cent rate on net balance, whereas they are advancing amounts to SGHs at a flat rate of 12 per cent. This differential method generates surplus income in the hands of SMBTs like the assessees in the present appeals. The bylaws of assessee trusts provide that 95 per cent of such surplus will be distributed among the members of SHGs working under them and 5 per cent of the surplus is to be retained by the assessee-trusts for their own maintenance and other administrative overheads. 4. These SMBTs are operating in the above-stated operational model in helping the villagers. 5. All these institutions mentioned above are the field organizations of an All India National Apex Body called "Association of Sarva Seva Farms" (ASSEFA for short). ASSEFA is a national level trust formed for the upliftment of poor villagers who had received in the past, parcels of land distributed by Boodhan Movement initiated by Acharya Vinoba Bave. The Boodhan Movement had collected good extent of land in different parts of India. Those lands were allotted to landless poor villagers. But, the villagers were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir member SHGs has to be treated as income of the respective trusts. It is to be seen that the assessee trusts have already offered for taxation 5 per cent of the surplus retained by them. The dispute is only with reference to 95 per cent of the surplus distributed to member SHGs. Paras 10 to 16 : ................... 17. First we will consider the question of treating 95 per cent of the surplus distributed to the member SHGs, as income liable for taxation or not. 18. We have broadly stated the organizational model of the assessee trusts working under the guidance of a national apex NGO. On the grassroots level, SHGs are working, for whom the assessee trusts are arranging funds availed from the umbrella organization SNBFCL. Every SHG contains ten to fifteen members. The details of every member belonging to a SHG are available on record. The details of loans availed by the various SHGs are properly recorded and further distribution of funds by SHGs to their individual members are also properly documented. It is on the basis of these documentations and details that interest is computed and paid off. The assessee trusts are returning back 95 per cent of the surplus to the variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant-trust is only a facilitator. Therefore, the appellant-trust has to be treated only as representative assessees. The Self Help Groups are mutual concerns and ultimately the interest burden is by the individual members of the group. Therefore, de facto speaking, the interest burden is by the individual members of the group. Therefore, de facto speaking, the expenditure by way of interest is incurred by the members and in fact the interests are paid by those members. These individual members do not have taxable income and are not liable for audit u/sec 44AB, Hence the provisions of Section 194A are not applicable to them. What is not applicable to the members is not applicable to the representative assessee also. Since the appellant-Trust is the representative assessee for the Self Help Groups, the question of deducting tax u/s. 194A by the appellant-Trust while making interest payments does not arise." 6. At the outset, the ld. counsel for the assessee stated that this issue also came up for hearing before Co-ordinate Bench in assessee's own case in earlier years in ITA Nos. 1100 to 1104 & 1098/Mds/2012 wherein the Tribunal exactly on same facts held that no disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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