Case Law
Citation: Almora Urban Co-operative Bank Ltd
Vs ITO (ITAT Delhi), I.T.A.No.-5324/Del/2013, Date of decision: 10-06-2015
Brief
of the case:
ITAT
held in Almora Urban Co-operative Bank Ltd Vs ITO that TDS was not required to
be deducted when co-operative society pays interest to its members as per sec
194A(3).
Facts
of the case :
Assessee
had paid interest to its members on term deposits without deducting TDS on it
so, AO disallowed the expense and levied penalty u/s 201; aggrieved by which assessee
challenged the same with CIT(A) who also confirmed the order of AO .Then
assessee filed an appeal with ITAT.
Contention
of the assessee:
Assessee
was of the view that sec 194A(3) exempts the co-operative society from the
deduction of TDS on the payment of interest to its members. So assessee was not
supposed to deduct the TDS on the payment of interest as all the interest had
been paid to its members and disallowance of expense and levying of penalty was
not in order.
Contention
of the revenue:
Revenue
was of the view that assessee was supposed to deduct the TDS u/s 194A so the
provisions of sec 201 was applicable as the assessee failed to deduct the TDS.
Moreover revenue was of the view that type of member should be checked whether
it was primary or secondary member.
Held
by ITAT :
ITAT
relied on the decision given in the case of Kashipur Urban Co-operative Bank
Limited vs. ITO, in which it was held that co-operative society was not
supposed to deduct the TDS as per sec 194A(3) .Moreover sec 194(3) neither
differentiate between the primary or secondary members nor between the type of
society .So when the society pays interest to any of its members it was not
required to deduct the TDS. The appeal of the assessee was upheld.
Direct
link to download the full text of the above judgment:
http://www.itatonline.in:8080/itat/upload/886404349855618118813%245%5E1REFNOSd-5324-DEL-2013-ALMORA_URBAN_CO-OPERATIVE_BANK-01_06.pdf
- See more at:
http://taxguru.in/income-tax-case-laws/tds-deducted-cooperative-society-pays-interest-members-sec-194a3almora-urban-co-operative-bank-ltd-vs-ito-itat-delhi.html#sthash.pSOSubWM.dpuf
