TaxTMI 
TaxTMI 
2018 (7) TMI 292
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....bers only from 01.06.2015. 02. Brief facts are, the assessee is a cooperative society registered as a cooperative bank and is also registered under the Karnataka Cooperative Societies Act, 1959 and has obtained licence from the RBI to carry out banking operations as a cooperative bank. The assessee filed return of income for AY 2012-13 declaring total income of Rs. 59,86,750/-. However case of the assessee was selected for scrutiny and the AO passed an assessment order determining the total income at Rs. 1,05,46,100/-. Aggrieved the assessee filed an appeal before the CIT (A). 03. On appeal the CIT (A) had decided the issue against the assessee with the following order : 3. The appellant is an AOP registered as a co-operative bank carrying on the business of banking. For the A.Y.2012-13, the appellant filed the return of income on 23/09/2012, admitting total income of Rs. 59,86,750/-. On scrutiny, the Assessing Officer assessed the income of the appellant at Rs,1,05,46,100/- by way of an order u/s.143(3), dt.29/01/2015, which is disputed in this appeal. For the appellate hearing, none appeared. A written submission, dt.13/02/2018 was made on behalf of the appellant, ....
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....holding that the expression cooperative society did not include a co-operative bank. In this regard, the decision of the Hon. ITAT, Bangalore Bench 'A', Bangalore rendered in the case of The Bagalkot District Central Co-operative Bank vs. JCIT, Bijapur in ITA No. 1572/Bang/2013, dt.30/05/2014 for the A.Y.200910, specifically mentioned as follows: "We may add that in both these decisions the discussion did not turn on the interpretation of Sec. 194A(3)(i)(b) of the Act vis-à-vis Sec. 194A(3)(v) of the Act. It is thus clear that the preponderance of judicial opinion on this issue is that co-operative societies carrying on banking business when it pays interest to its members on deposits need not deduct tax at source in view of the provisions of Sec. 194A(3)(v) of the Act". As the decision of the Hon. ITAT, Bangalore rendered in the case of The Bagalkot ITA.1384/Bang/2018 Page - 4 District Central Cooperative Bank vs. JCIT, Bijapur cited supra and relied on by the appellant did not pronounce an interpretation of Sec. 194A(3)(i)(b) of the Act, with due respect to the Hon. ITAT, Bangalore, it is held on facts that the failure of the appellant to deduct taxes at source fro....
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....i Bank Ltd (supra) in para 5, to the following effect : 5. The first question is answered at para 2 as follows:- "2. .................. The point is squarely covered by a Division Bench judgment of this Court in ITA No. 100116/2014 between the Commissioner of Income Tax and another v. The Bagalkot District Central Co-operative Bank dated 16.12.2015 wherein, with reference to a circular of the Government of India bearing No.19/2015 in F.No.142/14/2015 TPL, it has been held as follows: "42.5 In view of this, the provisions of the section 194(3)(v) of the Income-tax Act have been amended so as to expressly provide that the exemption provided from deduction of tax from payment of interest to members by a co-operative society under Section 194A(3)(v) of the Income-tax Act shall not apply to the payment of interest on time deposits by the co-operative banks to its members. As this amendment is effective from the prospective dated of 1st June, 2015, the co-operative bank shall be required to deduct tax from the payment of interest on time deposits of its members, on or after the 1st June, 2015. Hence, a cooperative bank was not required to deduct tax from the pa....
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.... Co-operative Central Bank Ltd (supra), we find substance and merit in the appeal of the assessee and accordingly ground nos.2 and 3 of the assessee are decided in favour of the assessee. The AO is directed to allow the expenditure of Rs. 1,09,16,354/-. 05. Per contra the Ld. DR has drawn our attention to the order passed by the AO where the various provisions of Sections 194A(3), and more particularly 194A(3)(i)(b), 194A(3)(v), 194A(3)(viia) were referred. On the basis of the above, it was submitted that Section 194A(3)(i)(b) is a specific provision and therefore the benefit of Section 194A(3)(i)(v) being a general provision cannot be granted and for that purposes the Ld. DR had relied upon the decision of the Pune Bench of the Tribunal in the matter of Bhagani Nivedita Sahakari Bank Ltd v. ACIT [87 ITD 569] as well as the judgment of the Hon'ble Supreme Court in the matter of CTO v. Binani Cements Ltd [CANo.336 of 2003, dt.19.02.104], whereby in paras 40 to 44, it was held as under : 40. In U.P. SEB v. Hari Shankar Jain, (1978) 4 SCC 16, this Court has concluded that if Section 79(c)of the Electricity Supply Act generally provides for the making of regulations providi....
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....ubject. 43. In the instant case, the item 1E is subject specific provision introduced by an amendment in 1996 to the Scheme. The said amendment removed "new cement industries" from the non-eligible Annexure-B and placed it into Annexure-C amongst the eligible industries. It classified the cement units for eligibility of tax exemption into three categories: small, medium and large. The said categories are comprehensive whereby small and medium cement units have been prescribed to have maximum FCIs of Rs. 60/- lakhs and Rs. 5/- crores, respectively and large to be over the FCI of Rs. 5/- crores. The maximum ceiling for large cement units has been purposefully left open and thereby reflects that the intention clearly is to provide for an all-inclusive provision for new cement units so as to avoid any ambiguity in determination of appropriate provision for applicability to new cement units to seek exemption. 44. It leaves no doubt that what is specific has to be seen in contradistinction with the other items/entries. The provision more specific than the other on the same subject would prevail. Here it is subject specific item and therefore as against items 1, 4, 6 and....