TaxTMI 
TaxTMI 
2014 (1) TMI 851
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 created u/s 201(1)/201(1A) of the income-tax Act, 1961 treating the assessee to be in default for not deducting tax at source u/s 194A(3) on interest paid / credited to societies viz Biotech Biobusiness and HP SITEG. 2. That as per Section 194A(3)(iii)(f), no exemption is deemed to be granted as each organization has to apply separately and exemption under this section is to be notified in the official Gazette after it is approved by the Central Govt. A clarification in this regard is issued by CBDT vide letter F. No. 275/22/2009-IT(B) dated 23.06.2009 in the case of H.P. Infrastructure Development Board in which similar issue is pending adjudication before the Hon'ble High Court of Himachal Pradesh. The Ld. CI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the reasons for non deducting the tax were explained at length to the ITO (TDS) but the same have not been considered. It was pointed out that Society of Biotech business is a nodal agency. It was explained that the Society of Biotech Bio-business is the nodal agency of Ministry of Rural Development, and H.P. SITEG is the nodal agency of the Ministry of Communication and Information Technology, Govt. of India. Both these agencies had kept the funds released by the Ministries in a separate bank account called the Programme Fund. The said funds were to be utilized by the agencies only for the purpose of the approve programme / project. It was argued that both the nodal agencies are the societies registered under the societies Registration....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t accrued on such deposits would be used only for the project. Similar is the case of HP SITG. From this, it is clear that societies were registered and were financed by Govt. of India and State Govt. The funds received by the Societies along with interest could be used only towards specified projects. The interest accrued on such projects funds parked in the bank belongs to the various ministries of Govt. of India. He also noted that as per notification No. SO 3489 dated 22.10.1970 issued u/s 194A(iii)(f), there was no liability on the bank for deduction of tax. Accordingly, it was held that bank was not required to deduct the tax. 6. Before us, Ld. DR submitted that u/s 194A, bank was required to deduct tax from the interest paid to an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p; (ii) ............................... (iii) to such income credited or paid to - (a) and (e) ......................................... (f) such other institution, association or body [or class of institutions, associations or bodies] which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette;" 9. The above clearly shows that there is no requirement for issuing individual instructions by the Central Govt. because clause (f) talks about partic....