Noida Commercial Cooperative Bank Ltd. v. Commissioner of Income-tax
[Citation -2019-LL-0819-77]

Citation 2019-LL-0819-77
Appellant Name Noida Commercial Cooperative Bank Ltd.
Respondent Name Commissioner of Income-tax
Court HIGH COURT OF ALLAHABAD
Relevant Act Income-tax
Date of Order 19/08/2019
Assessment Year 2013-14
Judgment View Judgment
Keyword Tags deduction of tax at source • payment of interest • interest received • payment of tax • time deposits
Bot Summary: This appeal has been filed under section 260A of the Income Tax Act, 1961 by the appellant assessee for the assessment year 2013-14 against the order of the tribunal dated 31.7.2015. As this amendment is effective from the prospective date 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 payment of interest on time deposits of its members paid or credited before 1st June, 2015. This particular circular has been interpreted by the Madras High Court in the case of Coimbatore District Central Co-operative Bank Ltd. versus Income Tax Officer, reported in (2016) 382 ITR 266. In view of the above, the circular no.19/2015 dated 27.11.2015 as issued by the Government of India, Ministry of Finance, Department of Revenue,, have application to the case of the appellant. The questions of law are answered in favour of the appellant and against the department.


INCOME TAX APPEAL No.-237 of 2015 Appellant :- M/S Noida Commercial Cooperative Bank Ltd. Respondent :- Commissioner Of Income Tax Counsel for Appellant :- Nikhil Agrawal,Dhruv Agrawal Counsel for Respondent :- C.S.C. It,Ashok Kumar Hon'ble Bharati Sapru,J. Hon'ble Rohit Ranjan Agarwal,J. Heard learned counsel for appellant Sri Nikhil Agrawal and learned counsel for department Sri Ashish Agarwal. This appeal has been filed under section 260A of Income Tax Act, 1961 by appellant assessee for assessment year 2013-14 against order of tribunal dated 31.7.2015. questions of law sought to be answered are hereinbelow: "(i)Whether ITAT was legally justified in upholding order of Income Tax Officer (TDS) passed under section 201/201(1A) of Income Tax Act and order of Commissioner (Appeals), even though there is no liability of TDS deduction on payment of interest to its members by co-operative society on deposits made by its members, which is exempted in view of section 194A (3) (V) of Act, in case of assessee? (ii)Whether ITAT was legally justified in not following judgment of Hon'ble Bombay High Court given in case of Jalgaon District Central Cooperative Bank versus Union of India reported in (2004) 265 ITR page 423 which interprets provisions of section 194A(3) (V) of Income Tax Act? (iii)Whether ITAT has failed to appreciate that even otherwise as per clarification mentioned in paragraph 2 of Circular No.9/2002 dated 11.9.2002 issued by Central Board of Direct Taxes, appellant was not liable to deduct tax at source on payment of interest to its members on deposits made by them? (iv)Whether in view of matter, ITAT was legally justified in upholding liability of deduction of tax at source under section 194A of Act? (v) Whether liability of payment of tax upon appellant can be legally justified in absence of finding by authorities below that recipient-members have not paid tax on amount of interest received by them?" Subsequently department has issued circular no.19/2015 dated 27.11.2015 and paragraph 42.5 of said circular reads as under: "42.5 In view of this, provisions of section 194A(3)(v) of Income Tax Act have been amended so as to expressly provide that exemption provided from deduction of tax from payment of interest to members by co-operative society under section 194A(3)(v of Income Tax Act, shall not apply to payment of interest on time deposits by co- operative banks to its members. As this amendment is effective from prospective date of 1st June, 2015, co-operative bank shall be required to deduct tax from payment of interest on time deposits of its members, on or after 1st June, 2015. Hence cooperative bank was not required to deduct tax from payment of interest on time deposits of its members paid or credited before 1st June, 2015." This particular circular has been interpreted by Madras High Court in case of Coimbatore District Central Co-operative Bank Ltd. versus Income Tax Officer, reported in (2016) 382 ITR 266 (Mad). In view of above, circular no.19/2015 dated 27.11.2015 as issued by Government of India, Ministry of Finance, Department of Revenue, (CBDT), have application to case of appellant. questions of law are, therefore, answered in favour of appellant and against department. appeal is allowed as above. Order Date :- 19.8.2019 rk Noida Commercial Cooperative Bank Ltd. v. Commissioner of Income-tax
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