2022 (2) TMI 689

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....is prejudicial to the interests of the appellant, is bad and erroneous in law and against the facts and circumstances of the case. 2. That the learned Commissioner of Income-Tax (TDS) erred in law and on facts in invoking provisions of section 263 of the Act with respect to the order passed u/s. 201(1) and 201(1A) on the ground that they are erroneous and prejudicial to the interests of the Revenue. 3. That the learned Commissioner of Income-tax (TDS) erred in law and on facts in passing order u/s 263 of the Act revising the orders passed u/s 201 ( 1 ) and 201(1A) of the Act even though such orders u/s. 201(1) and 201(1A) were subject matter of appeal before the Hon'ble Income Tax Appellate Tribunal and such appeals we....

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....e to one another, the appellant craves the leave of the Hon'ble Income Tax Appellate Tribunal, Bangalore to add, delete, amend or otherwise modify all or any of the grounds of appeal either before or at the time of hearing of this appeal." 2. Brief facts of the case are as under: 2.1 The assessee is a Member Credit Co-operative Society, and it has regular members and associate members. During the FY 2015-16 the regular members were 836 and associate members were 49,517. The assessee had accepted deposits from its associate members and paid interest on such deposits. The assessee was under a bonafide belief that the interest paid to associate members falls u/s 194A(3)(v) of the Act and therefore, it did not deduct tax at source on ....

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....d up to Tribunal in appeal and this Tribunal has to set aside the order of Ld.CIT(A) and deleted the demand raised in the order u/s 201(1) of the Act. 3.1 On the contrary, the Ld.DR relied on order passed under section 263 of the Act. We have perused the submissions advanced by both sides based on records placed before us. 4. It is the submission of the assessee that this Tribunal in assessee's own case for assessment year 2916-17 in ITA No. 412- 413/Bang/2020 vide order dated 18/01/2021 deleted the addition made by the Ld.AO under section 201(1)/(1A) of the Act, and that pursuant such deletion the order passed by the Ld.CIT under section 263 seeking to revise the order passed by the Ld.AO u/s. 201(1)/(1A) of the Act becomes void. ....

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....n by the CIT(A) is erroneous. The provisions of Sec.194A which are in relation to deduction of tax at source cannot be equated with the provisions of Sec. 80P(2)(a)(i) of the Act, which deals with deduction while computing total income. The admitted position is that the sum of Rs. 93,36,928/- has been paid to Associate Members and CIT(A) has equated it and named them as nonmembers. In our view this approach is erroneous." It can be noticed that the co-ordinate bench has expressed the view that the liability to deduct tax at source u/s 194A of the Act cannot be equated with the provisions of sec.80P of the Act. 13. This view combined with the decision of Hon'ble Supreme Court holding that the term "members" should be co....