TaxTMI 
TaxTMI 
2016 (7) TMI 338
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....erms of S.194A of the Act. In its cross-objections, the assessee has impugned the legality of the action of the Assessing Officer in reopening the assessments under S.147 of the Act. 3. Facts of the case, common for both the years except for the amounts and dates etc. involved, as taken from the appeal for assessment year 2007-08, are that the assessee is a cooperative society carrying on banking activities. For the assessment year 2007- 08, assessee originally field return of income on 29.10.2007 admitting loss of Rs. 4,73,54,180. The assessment was framed under S.143(3) on 9.12.2009, determining the loss of the assessee at Rs. 1,15,28,930, after making certain disallowances of Rs. 3,58,84,050. The said assessment was thereafter reopened by issue of notice under S.148 dated 20th January, 2012. The assessment was reopened to withdraw the house property loss wrongly adjusted and to recompute the business loss of the assessee. The Assessing Officer however completed the re-assessment determining the total income of the assessee at Rs. 5,25,22,858. While framing the re-assessment, the Assessing Officer inter alia made a disallowance of Rs. 6,37,64,249 being interest paid to individua....
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.... relevant Forms 15G/16H/60 in appropriate cases before the CIT(A) as additional evidence. 4.2 The CIT(A) after obtaining remand report from the Assessing Officer came to the conclusion that for the default committed by the assessee in obtaining Form 15G/15G/60, a different remedy is available to the Revenue. Accordingly, the learned CIT(A) held that provisions of S.40a(ia) cannot be invoked under the circumstances or non-deduction of TDS. The relevant operative portion of the order of the CIT(A) is reproduced hereunder- "5.3.4 I have perused the submissions made in the remand report. The appellant has filed copies of the despatch registers of its branches as evidence of the fact that Forms 15G, 15H and Form 60 were being submitted to the Income Tax Authorities. In some branches, the forms were submitted to the ACIT(CIB) while in other cases these forms have been submitted to the O/o. CIT/ACIT, Tirupati. The Hon'ble ITAT, Mumbai in Karwat Steel Traders vs. ITO (2013) (37 taxmann.com 190) has held as under: ''Since separate provisions were prescribed on default for non-filing or delayed filing of Form 15G/15H to Commissioner. non filing of such form would not invoke....
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.... by Supreme Court in some other sense, that will also amount to a fresh information which comes into existence subsequent to the original assessment-tax payer would not be allowed to take advantage of an oversight to mistake committed by the taxing authority. In the case of CIT vs. Bai Navajbai N.Gamadia (Bom), 35 ITR 793, it was held that "retrospective amendment of IT. Act making certain receipts taxable as income which was not chargeable to tax earlier - is information for the purpose of reopening". Moreover, in the case of Som Dutt Builders (P) Ltd. vs DCIT (ITAT, Kol) 98 ITD 78, it has been held that "Change of opinion comes to rescue of assessee only when Assessing Officer has taken one of permissible views at the time of original proceedings - A wrong application of law cannot be held as permissible view and that can always be Changed for appreciating law'. Further, in the case of crr Vs. Rinku Chakraborthy (Kar) 56 ITR 227, it has been had that " When an income liable to tax has escaped assessment in the original assessment proceedings due to oversight and inadvertence or a mistake committed by the ITO, he has jurisdiction to reopen the assessment. Re-assessment is perm....
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....He further submitted that the reliance placed on the CBDT Circular No.9 of 2002 dated 11.9.2002 by the Assessing Officer for denying exemption under S.194A(3)(v) of the Act is misplaced. He pointed out that the aforesaid CBDT circular has been read down by the Hon'ble Bombay High Court in the case of Jalgaon District Central Cooperative Bank Ltd. and Anr. V/s. Union of India & Ors. (265 ITR 423)(Bom) with regard to application of S.194A to the co-operative societies. . 7.1 The learned AR on facts submitted that the payments have been made to other members or to other cooperative societies carrying on banking activities. He next submitted that the relevant prescribed forms were handed by the concerned depositors and the same were submitted to the Assessing Officer. Therefore, there is no warrant for disallowance of interest paid by the assessee to its depositors. 8. Learned AR thereafter adverted to the cross objections filed by the assessee and submitted that the action of the Assessing Officer in invoking the provisions of S.147 is not sustainable, since such action is based on mere review of the exiting facts and records and merely owing to change of opinion thereon. For th....
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....l board of Direct Taxes is empowered to issue only administrative instructions to its subordinate authorities for the purpose of proper administration and enforcement of the provisions of the Income Tax Act,1961. Circular No.9 of 2002 dated September 11, 2002, provides that the exemption is available only to such members who have joined in application for the registration of the cooperative society and those who are admitted to the membership after registration in accordance with the bye laws and rules; that the members eligible for exemption under section 194A(3)(v)must have subscribed to and fully paid for at least one share of the cooperative bank, must be entitled to participate and vote in general body meetings or special general body meetings of the co-operative bank and must be entitled to receive share from the profits of the cooperative ban. The circular which is in the form of a clarification with regard to the rights and privileges of a duly registered member and nominal member is outside the scope of section 119. What is not contemplated in the exemption clause under section 194A(3)(v) of the Act cannot be imported to deprive the exemption granted to the co-operative so....
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....n writing in duplicate in prescribed form and verified in the prescribed manner received by a person responsible for paying income to the payee. The remedy towards default for non-furnishing of the declaration to the Commissioner of Income Tax as prescribed has been addressed under section 272A(2)(f) of the Act by imposing suitable penalty thereon. However, once Form No,15G/Form 15H were received by the persons responsible for deducting tax, there is no liability to deduct tax at source in view of section 194A r.w.s. 197 A. Once, it is held that tax is not deductible at source under section 194A on receipt of prescribed form, the mischief provided under section 40(a)(ia) is not attracted. 12. We find that no default can be said to have occurred in terms of the phraseology provided under section 40(a)(ia) of the Act in the facts of the case. Accordingly, we hold that the CIT(A) rightly cancelled the disallowance made by the assessing officer under section 40(a)(ia) of the Act due to mere non-filing of impugned Form No.15G/15H etc. with the appropriate authority. We have also perused decision of the ITAT in the case of Karwat Steel Traders V/s. ITO (ITA no.68322/Mum/2011 order dated....