Income Tax Appellate Tribunal - Delhi
Ito (Tds), Ghaziabad vs Mahamedha Urban Co-Operative Bank ... on 2 May, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "E" NEW DELHI
BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER
&
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
I.T.A. No.4885/DEL/2016
Assessment Year: 2014-15
ITO (TDS), Ghaziabad. v. Mahamedha Urban CO-
Operative Bank Ltd.,
36, Nai Basti,
Ghaziabad.
TAN/PAN: AAAAM 4437E
(Appellant) (Respondent)
CO No.95/DEL/2018
Assessment Year: 2014-15
Mahamedha Urban CO- v. ACIT, Ghaziabad.
Operative Bank Ltd.,
36, Nai Basti, Ghaziabad.
TAN/PAN: AAAAM 4437E
(Appellant) (Respondent)
Appellant by: None
Respondent by: Shri Ram Kumar Dhiman, CA
Date of hearing: 02 05 2018
Date of pronouncement: 02 05 2018
ORDER
PER AMIT SHUKLA, J.M.:
The aforesaid appeal has been filed by the Revenue and Cross Objection by the assessee against the impugned order dated 13.06.2016 passed by CIT (Appeals), Ghaziabad in relation to the order passed u/s.201(1)/201(1A) for the Assessment Year 2014-15 on following grounds of appeal.
I.T.A. No.4885/DEL/2016 & CO No.95/Del/2016 2
1. That the liability of TDS on interest paid by co-operative Banks is clearly specified in sub clause (b) of clause (i) of section 194A (3). Ambiguity appear to have been created by subsequent provisions of sub clause (v) of section 194A(3) which reads as under:-
"To such income credited or paid by a Co-operative Society {to a member thereof or} to any other co-operative Society"
2. That above contradiction has been settled with the amendment to Section 194A(3) w.e.f. 01-06-2015 which specifically excludes co-operative banks from the exemption provided to Co- operative Societies.
3. That notwithstanding the above, even prior to amendment the Co-operative banks are clearly liable to make TDS on interest payments exceeding Rs. 10,000/- made by them in view of specific provisions of section 194A(3)(i)(b) irrespective of the fact that the deductees is a member or not. The Ld. CIT (A) therefore, erred in law and on facts in holding that interest payments by Cooperative banks are not eligible for TDS u/s 194A of the I.T. Act.
2. The facts in brief are that the assessee is a co-operative society licensed by RBI to carry on the business. The Assessing Officer noted that bank had made payment on interest exceeding Rs.10,000/- without deducting tax at source u/s.194A(3)(i)(b). Since assessee had failed to deduct tax at source, Assessing Officer treated assessee as assessee in default in respect of tax of Rs.83,60,138/- u/s.201(1) and also levied interest u/s.201(1A) of Rs.10,03,216/-.
4. Ld. CIT (A) by following the decision of the Tribunal I.T.A. No.4885/DEL/2016 & CO No.95/Del/2016 3 especially in the case of Kashipur Urban Co-operative Bank vs. ITO, ITA No.5329/Del/2013, dated 14th November, 2014, deleted the demand u/s. 201(1) and consequently the interest u/s. 201(1A).
5. On behalf of the Department an adjournment application was filed however no one from the Department was present. Since, it was purely a covered matter; therefore, we proceeded to decide the issue ex parte qua the Department.
6. After going through the impugned order, we find that the Tribunal in several judgments including that of Kashipur Urban Bank Ltd. (supra) has held that interest paid to its member on time deposits, there was no liability to deduct TDS u/s.194A. Apart from that, we find that Hon'ble Bombay High Court in the case of Jalgaon District Central Co-operative Bank Ltd. and Another vs. Union of India & Ors, reported in (2004) 265 ITR 423 (Bom) held that payment on interest on time deposits made by Co-operative Banking Society is squarely covered under the exemption clause contained in section 194A(3)(v). This decision of the Hon'ble High Court has been followed in many judgments. Accordingly, we do not find any infirmity in the order of ld. CIT (A) in deleting the demand and consequently the interest. Hence, the appeal is dismissed.
I.T.A. No.4885/DEL/2016 & CO No.95/Del/2016 4
7. In the grounds for Cross Objection, assessee has supported the order of the ld. CIT (A) and since, we have confirmed the order of the ld. CIT (A), therefore, the grounds raised in the Cross Objection has become purely infructuous. Hence, Cross Objection is dismissed.
8. In the result, the appeal of the Revenue is dismissed as well as the Cross Objection of the assessee is dismissed as infructuous.
Order pronounced in the open Court on 2nd May, 2018.
Sd/- Sd/- [PRASHANT MAHARISHI] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2nd May, 2018 PKK: