TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 345
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.... in the business of banking under the license of Reserve Bank of India. A survey operation u/s 133A of the Income Tax Act, 1961 (hereinafter called as 'the Act') was conducted in the business premises of the assessee on 27.10.2011 to verify the assessee's compliance to the TDS provisions as per chapter 17B of the Act. During the course of survey proceedings, it was noticed that the assessee has not deducted TDS on the interest on deposits paid to members and non members and also salaries to its staff. However, it has complied with the TDS provisions, in respect of payments of professional services and commission. Thereafter, consequent to the survey proceedings, the A.O. has taken up the case and issued a show cause notice and asked....
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....rated the submissions made before the A.O. The assessee further submitted that it has complied with the TDS provisions in respect of interest on term deposits, where the interest amount exceeds Rs. 10,000/-, in case of non members. However, as per section 194A(1)(3)(v) of the Act, any interest payment to a member is exempt from deduction of TDS, therefore, not deducted TDS on interest payment to its members. The assessee further submitted that in cases, where interest income exceeds Rs. 10,000/-, the depositors have furnished declaration in form no.15G/15H, therefore, it has not deducted TDS in such cases. The CIT(A) during the course of appellate proceedings, forwarded the submissions of the assessee along with form no.15G/15H to the asses....
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....R 63 and also in view of the ITAT, Panaji Bench decision, in the case of Bhagani Nivedita Sahakari Bank Ltd. (supra), where it has been clearly held that section 194A(3)(vii)(a)(b) of the Act makes no distinction between members and non members of co-operative bank for the purpose of deduction of tax at source on interest on deposits paid/credited and therefore, cooperative bank is liable to deduct tax at source on interest payment u/s 194A(1) of the Act. The Ld. A.R. of the assessee, on the other hand, strongly supported the order of CIT(A) and argued that the issue is squarely covered by the decision of ITAT, Visakhapatnam bench decision, in the case of ACIT Vs. Visakhapatnam Co-operative Bank Ltd. in ITA No.5/Vizag/2011. Therefore, reque....
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.... bank. Prior to the amendment of section 194(1)(3)(v) of the Act w.e.f. 1.6.2015, there was no distinction between a member of a cooperative society and member of a co-operative bank. Therefore, we are of the opinion that the assessee is not liable to deduct TDS on interest payment to its members. We further noticed that in case of non members, the assessee stated that it has complied with the TDS provisions, where the interest payment exceeds Rs. 10,000/. In few cases, where interest exceeds Rs. 10,000/-, the depositors have furnished declaration in form no.15G/15H, therefore, no TDS is deducted. The CIT(A) during the course of appellate proceedings, after examining the declaration form furnished by the assessee has accepted the claim of a....
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....TAT, Panaji Bench decision in the case of Bhagani Nivedita Sahakari Bank Ltd. in ITA No.85/PNJ/2013 and argued that as per section 194A(3)(vii)(a)(b) of the Act, there is no distinction between members and non members of a co-operative bank for the purpose of deduction of tax at source on interest on deposits. We have gone through the case law relied upon by the assessee, in the light of the facts of the present case and find that the case law relied upon by the D.R. is not applicable to the facts of the present case. The case before the co-ordinate bench was, in respect of section 194A(1)(3)(vii)(a)(b) of the Act, which deals with deposits by a co-operative society with another cooperative society. Whereas, section 194(1)(3)(v) of the Act ....