AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (7) TMI 719
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....e assessee has filed an affidavit stating cause for the delay. 3. We have carefully perused the contents of the affidavit. In our considered opinion, the assessee was prevented by reasonable and sufficient cause for not filing the appeals in time. The delay is condoned for all the years. 4. The sum and substance of the grievance of the assessee for all the years under consideration is that the Ld. CIT(A) failed to appreciate the true import of sec. 194(v) and sec. 194A(viia) sub-clause (b) and erred in denying the exemption from sec. 194A in respect of payments of interest to Members. 5. The assessee is a cooperative bank engaged in the business of banking. A survey was conducted at the bank premises on 28/10/2013 to verify the complianc....
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.... "6.3 Now coming to the circular No. 9 of 2002 issued by the CBDT relied upon by the appellant, the Board vide said circular had sought to interpret the definition of word 'member' clarifying that the word 'member' does not include word 'nominal member'. It was held by the Bombay High Court in the case of Jalgaon District Central Co-op Bank Ltd & Anr v. Union of India 265 ITR 423 (Bom), that the Board has no power to interpret the provisions of law by way of circular. The issue at hand of the Bombay High Court was the definition of the word 'member' as appearing in clause (v) of section 194(3) and the powers of the Central Board of Direct Taxes to issue circulars u/s 119 which would override or detract from the prov....
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....on 194A, inter alia, also provides for exemption from deduction of tax in respect of following interest payments by co-operative society: (i) Interest payment by a co-operative society to a member thereof or any other co-operative society. (Section 194A(3)(v) of the Act] (ii) Interest payments on deposits by a primary agricultural credit society or primary credit society or co-operative land mortgage bank or co-operative land development bank. [Section 194A(3)(viia)(a) of the Act] (iii) Interest payment on deposits other than time deposit by a co-operative society engaged in the business of banking other than those mentioned in section 194A(3)(viia)(a) of the Act. [Section 194A(3)(viia)(b) of the Act] Therefore, as per the provisions of se....
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....ks override the general exemption provided to all co-operative societies for non-deduction of tax from interest payment to members under section 194A(3)(v) of the Act. As there is no difference in the functioning of the co-operative banks and other commercial banks, the Finance Act, 2006 and Finance Act, 2007, amended the provisions of the Act to provide for co-operative banks a taxation regime which is similar to that for the other commercial banks. Therefore, there is no rationale for treating the co-operative banks differently from other commercial banks in the matter of deduction of tax and allowing them to avail the exemption meant for smaller credit co-operative societies formed for the benefit of small number of members. However, as ....
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....02 has been withdrawn by the CBDT as it has been struck down by the Bombay High Court in the case of Jalgaon District Central Co. Bank (supra). 10. Having given a thoughtful consideration to the rival contentions. We have carefully perused the orders of the authorities below. We have also gone through the decisions relied upon by the rival parties and the Circulars of the CBDT brought to our notice. 11. Firstly, the Assessing Officer and the Ld. CIT(A) have heavily relied upon the decision of the Tribunal Panaji Bench in the case of Bailhongal Urban Co. Bank Ltd. (supra), wherein the Tribunal has held that circular No. 9 of 2002 dated 11/09/2002 issued by the CBDT has been quashed and set aside by the Hon'ble High Court of Bombay in the c....