Integra And Is Covered By The Decision Of The Co-Ordinate Benchi.e. The Commissioner Of Income Tax And Another v. The Ilkalco-Operative Bank Ltd., The Co-Ordinate Bench In The Saidcase Has Held As Below

Date of Judgment 07.06.2017 ITA No.100060/2016The Commissioner of Income Tax & another.Vs. The Karnataka Vikasa Grameena Bank 1 IN THE HIGH COURT OF KARNATAKADHARWAD BENCH DATED THIS THE 07 DAY OF JUNE, 2017 PRESENT THE HON’BLE DR. JUSTICE VINEET KOTHARI AND THE HON’BLE DR. JUSTICE H. B. PRABHAKARA SASTRY INCOME TAX APPEAL No.100060/2016 BETWEEN: 1THE COMMISSIONER OF INCOME TAX,C.R.BUILDING, NAVANAGAR,HUBBALLI.C.R.BUILDING, NAVANAGAR,HUBBALLI. 2THE ADDL. COMMISIONER OF INCOME TAX,RANGE-2, HUBBALLI. … APPELLANTS (BY SRI. Y.V.RAVIRAJ, ADV.,) AND: KARNATAKA VIKAS GRAMEENA BANK,HEAD OFFICE, CTS NO.52/B1/A1/D.H.NO.133A,H.O.BUILDING, BELAGAVI ROAD,D.N.KOPPA, DHARWAD – 580008. …RESPONDENT Date of Judgment 07.06.2017 ITA No.100060/2016The Commissioner of Income Tax & another.Vs.The Karnataka Vikasa Grameena Bank 2 THIS ITA IS FILED UNDER SECTION 260(A) OF THEINCOME TAX ACT, 1961 PRAYING TO FORMULATE THESUBSTANTIATE QUESTION OF LAW AND ALLOW THEAPPEAL AND SET ASIDE THE ORDERS PASSED BY THEINCOME TAX APPELLATE TRIBUNAL, BANGALOREBENCH ‘A’ IN ITA NO.662/BANG/2013 DATED 13.02.2015AND CONFIRM THE ORDER PASSED BY THECOMMISSIONER OF INCOME TAX, HUBBALLI. THIS APPEAL COMING ON FOR HEARING –INTERLOCUTORY APPLICATION, THIS DAY, DR. VINEETKOTHARI, J., DELIVERED THE FOLLOWING: JUDGMENT 1.The learned counsel for the department – Revenue Mr. Y.V.Raviraj, submits that the controversy is no longer res integra and is covered by the decision of the Co-ordinate Benchi.e. The Commissioner of Income Tax and another Vs. The IlkalCo-Operative Bank Ltd., The Co-ordinate Bench in the saidcase has held as below : “In this appeal by the Revenue, the issue involved is forconsideration whether the Co-operative Bank was required todeduct tax while paying interest to its members on time depositsunder Section 194-A of the Income Tax Act. Date of Judgment 07.06.2017 ITA No.100060/2016The Commissioner of Income Tax & another.Vs.The Karnataka Vikasa Grameena Bank 3 2.The Ministry of Finance, Government of India videCircular No.19/2015 in F.No.142/14/2015-TPL, has held thatthe Co-operative Banks are not required to deduct tax at sourceon time deposits of its members paid or credited on or before1.7.2015. The relevant portion of the circular reads as under: “42.5 In view of this, the provisions of thesection 194A(3)(v) of the Income-tax Act have beenamended so as to expressly provide that the exemptionprovided from deduction of tax from payment ofinterest to members by a co-operative society undersection 194A(3)(v) of the Income-tax Act shall notapply to the payment of interest on time deposits bythe co-operative banks to its members. As thisamendment is effective from the prospective date of 1[st]June, 2015, the co-operative bank shall be required todeduct tax from the payment of interest on timedeposits of its members, on or after the 1[st] June, 2015.Hence, a cooperative bank was not required to deducttax from the payment of interest on time deposits of itsmembers paid or credited before 1[st] June, 2015.” Date of Judgment 07.06.2017 ITA No.100060/2016The Commissioner of Income Tax & another.Vs. The Karnataka Vikasa Grameena Bank 4 In view of the aforesaid circular, this appeal doesnot survive for consideration and is accordingly dismissed. Nocosts. 3.In view of the same, the present appeal filed byRevenue is also disposed of, in the same terms. Sd/- JUDGE Sd/- JUDGE *Svh/-