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The ITAT held that the assessee, a co-operative bank registered under the Co-operative Societies Act and licensed by the RBI, is not obligated to deduct tax at source under section 194A(3)(v) on interest payments made to co-operative housing societies. Consequently, the assessee cannot be deemed an assessee in default under section 201 for non-deduction or short deduction of TDS on such interest payments. The tax demand raised by the AO, including interest thereon, was quashed. The decision aligns with precedent wherein similar relief was granted, confirming that interest paid by a co-operative bank to other co-operative societies is exempt from TDS deduction under the specified statutory provision. The assessee's appeal on this ground was allowed.
The ITAT held that the assessee, a co-operative bank registered under the Co-operative Societies Act and licensed by the RBI, is not obligated to deduct tax at source under section 194A(3)(v) on interest payments made to co-operative housing societies. Consequently, the assessee cannot be deemed an assessee in default under section 201 for non-deduction or short deduction of TDS on such interest payments. The tax demand raised by the AO, including interest thereon, was quashed. The decision aligns with precedent wherein similar relief was granted, confirming that interest paid by a co-operative bank to other co-operative societies is exempt from TDS deduction under the specified statutory provision. The assessee's appeal on this ground was allowed.
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