Ita/631/2015 Of The Commissioner Of Income Tax v. M/S The Shamrao Vithal

IN THE HIGH COURT OF KARNATAKADHARWAD BENCH DATLBD THIS THE 1 DAY OF SEPTEMBER, 2016 PRESENT THE HON’BLE MR.JUSTICE ASHOK B.HINCHIGERI AN [I THE HON’BLE MR. JUSTICE P.S.DINESH KUMAR BETWEEN: LT.A. NO.631/2015 1.THER COMMISSIONER OF INCOME TATDS, GROUND FLOOR,PUNDALIK NIWAS, RUA-DE-OUREM,PANAJI-GAO-403001. 2.THE INCOME TAX OFFICER TDS WARD,C R BUILDING, ANNEXE, P.B.ROAD,NAVANAGAR, HUBLI 580025. (BY SRI Y.V.RAVIRAJ, ADVOCATE) .. APPELLANTS AND: M/S. THE SHAMRAO VITHALCO-OPERATIVE BANK LTD.,GROUND FLOOR,SATELLITE SPACE AGE COMPLEX,KOPPIKAR ROAD, HUBLI,PAN : AAAAT 0177C... RESPONDENT THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260AOF THE INCOME TAX ACT, 1961, PRAYING TO SET ASIDE THEORDER DATED 30.06.2015, PASSED BY THE INCOME TAXAPPELLATE TRIBUNAL, BANGALORE, IN ITA NO.675/BANG/2015,AND CONFIRM THER ORDER OF THER APPELLATE COMMISSION CONFIRMING THR ORDER PASSKHD BY THR INCOME TAOFFICER, TDS WARD, HUBBALLI, ETC. THIS APPEAL COMING ON FOR ADMISSION, THIS DAY,P.S.DINESH KUMAR Jf,DELIVERED THERE FOLLOWING JUDGMENT Revenue, with a question of law as to whether Tribunal wascorrect 1n holding that a Co-operative Bank was not required todeduct tax on the interest paid to the members on the ground thatthey were exempt under Section 194A(3)(v) of the Income Tax Act,1961 (for brevity, “the Act’) has presented this appeal. A DivisionBench of this Court in L.T.A. No.100180/2015 vide its judgmentdated 17.08.2016 by placing reliance on the circular bearingNo.19/2015 in F. No.142/14/2015 TPL issued by the Ministry ofFinance, Government of India, has held that the Co-operative Bankwas not required to deduct tax from the payment of interest on Time Deposits of its members paid or credited on or before 01.06.2015. The relevant portion of the circular reads as follows : “42.5 In view of this, the provisions ofthe section 194(3)(v) of the Income-tax Act havebeen amended so as to expressly provide thatthe exemption provided from deduction of taxfrom payment of interest to members by a co-operative society under Section 194A(3)(v) of the Income-tax Act shall not apply to the paymentof interest on time deposits by the co-operativebanks to its members. As this amendment iseffective from the prospective date of 1 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]June2015. Hence, a cooperative bank was notrequired to deduct tax from the payment ofinterest on time deposits of its members paid orcredited before 1[St]June 2015.” 2. The grievance of the revenue is with regard to a findingrecotded by the Tribunal that the Co-operative Banks were neverrequired to deduct tax on the interest paid. The said issue is noNOTE|res integra-and settled in the aforementioned judgment dated17.08.2016 in ITA No.100180/2015. Therefore, this appeal fails andis accordinglydismissed._ No costs Sd/-JUDGE Sd/-JUDGE