? By The Impugned Order, The Appellate Tribunalhas Remanded The Matter Directing The Assessing Officerto Verify As Per The Decision Of The Hon’ble Supremecourt v. Eli Lilly Co. Reported In 312 Tr 225 (Sc)Whether Payee Has Paid

IN THE HIGH COURT OF KARNATAKADHARWAD BENCH DATED THIS THE 17[th]DAY OF AUGUST 2016 PRESENT THE HON’BLE MR. JUSTICE H.BILLAPPA AN THE HON’BLE MR. JUSTICE K.N.PHANEENDRA BBRTWEE L.T.A. No.100180/2015 SHRBBE BASAVBSWWAR CO-OP. BANK LTRAVIWAR PETH, BELAGAVI.REP BY ITS GENERAL MANAGER,PAN-AAAAB3041MoORI.VEERAPPA S/O CHANNBASAPPA KHANAPUAGE: 55 YBARS _. APPKELLANT (BY SRI.: H.R.KAMBIYAVAR, ADV. &OMT. PATRI SHASHIKALA K.ADV.) AN 1.THE COMMISSIONER OF INCOME-TAX (APPEALS)DR.B.R.AMBEDKAR ROAD,BBELAGAVIDR.B.R.AMBEDKAR ROAD,BBELAGAVI 2.THERE ASSISTANT COMMISSIONBR I.T. CIRCLE, 1,BELAGAV II.T. CIRCLE, 1,BELAGAV I _ RESPONDENTS (BY SRLY.V.RAVIRAJ, ADV) THIS ITA IS FILED UNDER SECTION J6O0A OF THINCOME-TAX ACT, 1961, PRAYING TO (A) FORMULATETHE SUBSTANTIAL QUESTION OF LAW (B) ALLOW THEAPPEALBY|DELETING THEADDITION.OHRS.70,92,023/- AND SUITABLY MODIFY THE ORDEROF THR INCOME TAX APPELLATE TRIBUNAL IN [TTNO.347/PNJ/2014 DTD:25/3/2015, ORDER OF THECOMMISSIONERORINCOMETAX|(APPEALS),BELAGAVI IN ITA NO.289/BGM/2013-14 DTD:5/8/2014AND ASSESSMENT ORDER DATED 23/12/2013 ASOUGHT IN THE APEPAL. THISITA.COMING|ON|HORHHARINGONINTBRLOCUTORYAPPLICATIONTHISDAY,H.BILLAPPA, J., DELIVERED THE FOLLOWING: JUDGMENT The appellant has filed this appeal challenging theorder dated 25.03.2015 passed by the ITAT, PanajiBench, Panaji, in ITA No.347/PNJ/2014- ? By the impugned order, the Appellate Tribunalhas remanded the matter directing the Assessing Officerto verify as per the decision of the Hon’ble SupremeCourt in the case of.Hindustan Coca Cola BeveragesP.Ltd. (supra) and also the decision of CIT Vs. Eli Lilly Co. reported in 312 TR 225 (SC)|whether payee has paid tax on the interest income received from the assessesociety and shown the same in his income tax return. 3.Agerieved by that, the appellant-assessee hasfiled this appeal. 4The learned counsel for the parties submit that1n VIEWoT|thecircularbearingNo.19/201574F.No.142/14/2015 TPL, issued by the Ministry ofFinance, Government of India, the Co-operative Banksare not required to deduct the tax from the payment ofinterest on time of deposits of its members paid orcredited on or before 1/6/2015. 5.In this appeal, the question of law involved is,Whether the Co-operative Bank was required to deductthe tax while paying interest to its members on timedeposits under Section 194A of the Income Tax Act.? 6.The learned counsel for the parties submits thatin view of the clarification issued by the Ministry ofFinance, Government of India vide circular No.19/2019in F.No.142/14/2015 TPL, the Cooperative Banks are not required to deduct the tax at source on time depositsof its members paid or credited on or before 1/6/2010. T The relevant portion of the circular reads asfollows:- “AO5.InVIEW|oT this,theprovisions of the section 194(3)(v) ofthe Income-tax Act have been amendedso as to expressly provide that theexemption provided from deduction oftaxfrompaymentoT interestTOmembers by a co-operative societyunder Section 194A(3)(v) of the Income-tax Act shall not apply to the paymentof interest on time deposits by the co-operative banks to its members. Asthis amendment is effective from theprospective date of 1[St]June, 2015, theco-operative bank shall be required todeductTaxfromthepaymentotinterestOT]time.depositsoT itsmembers, on or aiter the l[St]June2015. Hence, a cooperative bank wasnot required to deduct tax from thepayment of interest on time deposits ofits members paid or credited before 1[St]June 2015.” 8.It is clear, the circular clarifies that a Co-operative Bank was not required to deduct the tax fromthe payment of interest on time deposits of its memberspaid or credited before 1/6/2010. QOTherefore, direction by issued the ITAT, cannotbe sustained in law. 8.It is clear, the circular clarifies that a Co-operative Bank was not required to deduct the tax fromthe payment of interest on time deposits of its memberspaid or credited before 1/6/2010. QOTherefore, direction by issued the ITAT, cannotbe sustained in law. 10,Accordingly, the appeal is allowed and theimpugned order passed by the Income Tax AppellateTribunal Panaji Bench, Panaji, in ITA No.347/PNJ/2014is hereby set aside. The Assessing officer is directed toconsider the matter in the lght of the circular bearingNo.19/2015 in F.NO.142/14/2015 TPL issued by theMinistry of Finance, Government of India and passappropriate orders in accordance with law, Sd/-JUDGE Vmb Sd/-JUDGE