9911796707
TMI Blog2022 (11) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... 3900, 13446, 13447, 13450, 13452, 13455, 13457, 13448, 13449, 13451, 13453, 13454, 13456, 13459, 13461, 13465, 13466, 13467, 13468, 13458, 13460, 13463, 13464, 13482, 13483, 13480, 13481, 13474, 13475, 13469, 13470, 13471, 13473, 13476, 13477, 13487, 13489, 13492, 13493, 13494, 13495, 13496, 13497, 13501 & 13502 of 2022 For the Petitioners : Mr. T. Ramesh, Mr. G. Punniakoti, Mr. K. Selvaraj. For the Respondents : Mr. A. Selvendran (for R1) Special Government Pleader Mr. Karthik Ranganathan (for R2) Senior Standing Counsel; Mr. A. Selvendran (for R2 to R4) Special Government Pleader Mr. A.P. Srinivas (for R1) Senior Standing Counsel; Mr. Prabu Mukund Arunkumar (for R1) Junior Standing Counsel, Ms. G. Thilakavathy (for R2) Senior Counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); (ii) a co-operative society engaged in carrying on the business of banking; or (iii) a post office. 4. It is the case of the petitioners that there should be no deduction at all, that could be effected from the withdrawals made by them from the banks. The petitioner societies are intermediaries between the bank and agriculturists, who are beneficiaries of the withdrawals made by the petitioners. 5. In most instances, the amounts have been sanctioned by the State and the petitioner societies are mere conduits or facilitators. Thus, deduction of tax, in such a situation, would greatly prejudice the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction. 9. Thus, it is only in respect of amounts that constitute income in the hands of the payee that tax should be deducted. In the present case, the withdrawals do not constitute income of the petitioner and hence such liability would not arise. 10. They place great reliance upon a CBDT Notification bearing No. 70 of 2019 dated 20.09.2019, whereunder commission agents or traders operating under the provisions of the Agricultural Produce Market Committee (APMC) have been permitted to withdraw cash in excess of one crore without deduction of tax at source, upon them establishing that such withdrawals were for the purpose of making payments to the farmers for purchase of agricultural produce as well as satisfaction of other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The bank was thus taken to task and its liability for non-deduction was determined at a sum of Rs. 9,58,77,590/-. This demand relates to the period 01.09.2019 to 31.03.2020, post introduction of Section 194 N as well as the period 2020- 21. It is only thereafter, that the banks proceeded to apply the provisions of Section 194 N to insulate themselves from any liability in this regard. The impugned circulars have been issued, and must be seen, in the background of the aforesaid events. 15. The provisions of Section 194 N provide for a mandatory deduction of 2% of cash withdrawals and the object is to discourage, and drive the move toward a cashless or cashfree economy. The scheme of tax deduction also allows, by way of an application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns specified in such notification. 17. There is thus, an avenue provided for a recipient falling outside the scope of the exceptions, to seek exemption from the application of Section 194N and hence, if at all the petitioners believe that they qualify for the exemption, they may seek redressal under the in-built statutory mechanism provided as above, if they so choose. 18. To a query from the Court, as to who would constitute the specific authority before whom such prayer was to be made, the respondents have reported written instructions from the Commissioner of Income Tax (TDS), Coimbatore stating thus: 'As per business allocation rule, Central Government for tax purposes is Finance Minister of India. Hence, any request may be in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge also proceeds to state that it was open to the banks to establish before the assessing officers that the sums withdrawn by the member societies did not represent income in their hands, after considering the evidence available in that regard. In my considered view, the aforesaid examination can be carried out only in the instance of the societies and not at the instance of the banks, who are payers, with statutory responsibility to deduct. That apart, the matter is stated to be pending in appeal in W.A.(MD)Nos. 1137 of 2020 etc. batch and interim stay granted on 17.12.2020. 23. For the above reasons, the challenge to the impugned Circulars cannot be entertained as the District Central Cooperative Banks have, therein, merely sought to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
