TaxTMI 
TaxTMI 
2021 (1) TMI 748
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....sment proceedings, the AO noticed that the society had paid interest on deposits to the extent of 1,47,84,915/-. The AO called upon the assessee to furnish evidence regarding deduction of tax at source on the interest paid u/s 194A of the Act. 3. The AO also called upon the society to explain as to, whether any interest was paid to members less than Rs. 10,000/- so that the provisions of section 194A of the Act will not apply to such payments. 4. A perusal of the order of AO shows that the society did not furnish the required details. The following are the relevant observations of AO in this regard:- "Opportunity has been given to the assessee for the submission of the details of members and non-members to whom the interest on deposits ....
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....rs and therefore to this extent the addition should be upheld. The following were the relevant observations of the CIT(A) in this regard:- "6. Therefore, as discussed above, the assessee has admittedly failed to deduct tax at source on the payment of interest, of above Rs. 10,000/-, made to non-members of Rs. 93,36,928/-, as required by the provisions of section 194A of the I.T. Act, 1961. The assessee has also failed to submit any details, proof, or evidence, as to whether Form 15G/15H were submitted, or if the income was declared in their ITRs. I, therefore, uphold the disallowance made by the AO u/s. 40(a)(ia) of the I.T. Act,1961, of the expenditure on interest paid/credited to non-members, to the extent of Rs. 93,36,928/-, for fail....
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.... payments of interest to the extent of Rs. 93,36,928/-. 9. The ld. Counsel for the Assessee submitted that for AY 2015-16, there was no obligation to deduct tax at source by a Co-operative Society on payment for interest to its members in view of the provisions of Sec.194A(3)(v) of the Act. In this regard he drew our attention to a decision of Hon'ble Karnataka High Court in the case of CIT Vs Karnataka State Apex Co-operative Bank Ltd., in ITA No.526/2015, judgement dated 27.06.2016. 10. The ld. DR, however, relied on the order of CIT(A). 11. We have considered the rival submissions. We find that a sum of Rs. 93,36,928/- is interest paid to Associate Members. The CIT(A) has, however, made a reference to the decision of Hon'ble Supreme C....