Wp(C)/14226/2012 Of The Thathamangalam Service Co-Operative Bank Ltd v. The Income Tax Officers (Tds)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 14TH DAY OF SEPTEMBER 2012/23RD BHADRA 1934 WP(C).No. 14226 of 2012 (C) --------------------------- PETITIONER: ----------- 1. THE THATHAMANGALAM SERVICE CO-OPERATIVE BANK LTD, THATHAMANGALAM POST, PALAKKAD 678 102 REPRESENTED BY ITS SECRETARY SRI.R.SADANANDAN.2. M/S.VADAVANNUR SERVICE CO-OPERATIVE BANK LTD, VADUVANNUR POST, PALAKKAD 678 534 REPRESENTED BY ITS SECRETARY SRI.B.RAVI.3. M/S.PERUMATTY SERVICE CO-OPERATIVE BANK LTD, VANDITHAVALAM, POST, PALAKKAD 678 534 REPRESENTED BY ITS AUTHORISED PERSON SRI.N.HARIDASAN.4. M/S.MOOLATHARA SERVICE CO-OPERATIVE BANK LTD MEENAKSHIPURAM POST, PALAKKAD 678 533 REPRESENTED BY ITS SECRETARY SRI.K.S.KALADHARAN.5. M/S.PATTANCHERRY SERVICE CO-OPERATIVE BANK LTD PATTANCHERRRY POST, PALAKKAD 678 532 REPRESENTED BY ITS SECRETARY SRI.M.MOIDEENKUTTY.6. M/S.CHITTUR SERVICE CO-OPERATIVE BANK LTD CHITTUR, PALAKKAD 678 101 REPRESENTED BY ITS AUTHOIRSED PERSON SRI.K.CHENTHAMARA.7. M/S.MUTHALAMADA SERVICE CO-OPERATIVE BANK LTD MUTHALAMADA, PALAKKAD 678 507 REPRESENTED BY ITS SECRETARY SRI.B.SADANANDAN.8. M/S.KOZHIPPARA SERVICE CO-OPERATIVE BANK LTD KOZHIPPARA, PALAKKAD 678 557 REPRESENTED BY ITS SECRETARY SRI.M.MANIKANDAN.9. M/S.VALLANGHY VITHANASSERRY SERVICE CO-OPERATIVE BANK LTD VITHANASSERRY, NENMARA POST, PALAKKAD 678 508 REPRESENTED BY ITS AUTHORISED PERSON SRI.M.KUMARACHANDRAN. WP(C).No. 14226 of 2012 (C) --------------------------- 10. M/S. ELAVANCHERRY SERVICE CO-OPERATIVE BANK LTD ELAVANCHERRY POST, PALAKKAD 678 508 REPRESENTED BY ITS SECRETARY SRI.A.RAJAN. ELAVANCHERRY POST, PALAKKAD 678 508 REPRESENTED BY ITS SECRETARY SRI.A.RAJAN. 11. M/S. KOLLENGODE SERVICE CO-OPERATIVE BANK LTD KOLLENGODE POST, PALAKKAD 678 506 REPRESENTED BY ITS SECRETARY SMT.C.SARASIJA. KOLLENGODE POST, PALAKKAD 678 506 REPRESENTED BY ITS SECRETARY SMT.C.SARASIJA. 12. M/S. MOONGILMADA SERVICE CO-OPERATIVE BANK LTD VANNAMADA POST, PALAKKAD 678 555 REPRESENTED BY ITS SECRETARY SMT.V.DEVAKI. VANNAMADA POST, PALAKKAD 678 555 REPRESENTED BY ITS SECRETARY SMT.V.DEVAKI. 13. M/S. VELANTHAVALAM SERVICE CO-OPERATIVE BANK LTD VELANTHAVALAM POST, PALAKKAD 678 557 REPRESENTED BY ITS SECRETARY SRI.P.SWAMIAPPAN. VELANTHAVALAM POST, PALAKKAD 678 557 REPRESENTED BY ITS SECRETARY SRI.P.SWAMIAPPAN. 14. M/S.PALLASSANA SERVICE CO-OPERATIVE BANK LTD PALLASSANA POST, PALAKKAD 678 505 REPRESENTED BY ITS SECRETARY SRI.C.KADER MOIDEEN PALLASSANA POST, PALAKKAD 678 505 REPRESENTED BY ITS SECRETARY SRI.C.KADER MOIDEEN 15. M/S. KOZHINJAMPARA SERVICE CO-OPERATIVE BANK LTD KOZHINJAMPARA POST, PALAKKAD 678 555 REPRESENTED BY ITS SECRETARY SMT.M.SOBHANA. KOZHINJAMPARA POST, PALAKKAD 678 555 REPRESENTED BY ITS SECRETARY SMT.M.SOBHANA. 16. M/S. AYALUR SERVICE CO-OPERATIVE BANK LTD AYALUR POST PALAKKAD 678 510.REPRESENTED BY ITS SECRETARY SRI.P.RAGHAVADAS. AYALUR POST PALAKKAD 678 510.REPRESENTED BY ITS SECRETARY SRI.P.RAGHAVADAS. 17. M/S.KODUVAYUR SERVICE CO-OPERATIVE BANK LTD KODUVAUR, PALAKKAD KODUVAUR, PALAKKAD REPRESENTED BY ITS SECRETARY SRI.K.UNNI. 18. M/S.KUTHANNUR SERVICE CO-OPERATIVE BANK LTD KUTHANNUR POST, PALAKKAD 678 721 REPRESENTED BY ITS SECRETARY, SRI.T.SURESHKUMAR. KUTHANNUR POST, PALAKKAD 678 721 REPRESENTED BY ITS SECRETARY, SRI.T.SURESHKUMAR. 19. M/S.COYALMANNAM SERVICE CO-OPERATIVE BANK LTD COYALMANNAM, PALAKKAD REPRESENTED BY ITS SECRETARY SRI.S.SAJITH. COYALMANNAM, PALAKKAD REPRESENTED BY ITS SECRETARY SRI.S.SAJITH. 20. M/S.KANJIKODE SERVICE CO-OPERATIVE BANK LTD KANJIKODE POST, PALAKKAD 678 621 REPRESENTED BY ITS SECRETARY SRI.M.RAMAKRISHNAN. KANJIKODE POST, PALAKKAD 678 621 REPRESENTED BY ITS SECRETARY SRI.M.RAMAKRISHNAN. 17. M/S.KODUVAYUR SERVICE CO-OPERATIVE BANK LTD KODUVAUR, PALAKKAD KODUVAUR, PALAKKAD REPRESENTED BY ITS SECRETARY SRI.K.UNNI. 18. M/S.KUTHANNUR SERVICE CO-OPERATIVE BANK LTD KUTHANNUR POST, PALAKKAD 678 721 REPRESENTED BY ITS SECRETARY, SRI.T.SURESHKUMAR. KUTHANNUR POST, PALAKKAD 678 721 REPRESENTED BY ITS SECRETARY, SRI.T.SURESHKUMAR. 19. M/S.COYALMANNAM SERVICE CO-OPERATIVE BANK LTD COYALMANNAM, PALAKKAD REPRESENTED BY ITS SECRETARY SRI.S.SAJITH. COYALMANNAM, PALAKKAD REPRESENTED BY ITS SECRETARY SRI.S.SAJITH. 20. M/S.KANJIKODE SERVICE CO-OPERATIVE BANK LTD KANJIKODE POST, PALAKKAD 678 621 REPRESENTED BY ITS SECRETARY SRI.M.RAMAKRISHNAN. KANJIKODE POST, PALAKKAD 678 621 REPRESENTED BY ITS SECRETARY SRI.M.RAMAKRISHNAN. 21. M/S.PARLI SERVICE CO-OPERATIVE BANK LTD PARLI POST, PALAKKAD 678 612 REPRESENTED BY ITS SECRETARY, SRI.A.GOPAKUMAR. PARLI POST, PALAKKAD 678 612 REPRESENTED BY ITS SECRETARY, SRI.A.GOPAKUMAR. BY ADVS.SRI.T.M.SREEDHARAN (SR.) SMT.NISHA JOHN SRI.V.P.NARAYANAN SMT.BOBY M.SEKHAR SMT.NISHA JOHN SRI.V.P.NARAYANAN SMT.BOBY M.SEKHAR WP(C).No. 14226 of 2012 (C) --------------------------- RESPONDENTS: ----------- 1. THE INCOME TAX OFFICER (TDS) PALAKKAD RANGE, PALAKKAD 678 001. PALAKKAD RANGE, PALAKKAD 678 001. 2. THE COMMISSIONER OF INCOME TAX (CIB) 5TH FLOOR, KANDAMLOLATHY TOWERS, M.G ROAD KOCHI 682 011. 5TH FLOOR, KANDAMLOLATHY TOWERS, M.G ROAD KOCHI 682 011. 3. THE ASSISTANT DIRECTOR OF INCOME TAX (INV.) CHUNDAKKAYIL COMPLEX, 1ST FLOOR, MANJAKULAM ROAD, PALAKKAD 678 014. CHUNDAKKAYIL COMPLEX, 1ST FLOOR, MANJAKULAM ROAD, PALAKKAD 678 014. BY SENIOR GOVERNMENT PLEADER SMT.SHOBA ANNAMMA EAPEN BY ADVS.SRI.P.K.RAVINDRANATHA MENON (SENIOR) SRI.JOSE JOSEPH, SC, INCOME TAX BY ADVS.SRI.P.K.RAVINDRANATHA MENON (SENIOR) SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSIONON 9.8.2012 ALONG WITH WPC. 14846/2012 AND CONNECTED CASES,THE COURT ON 14-09-2012 DELIVERED THE FOLLOWING: VK WP(C).No. 14226 of 2012 (C) --------------------------- APPENDIX --------- PETITIONER(S) EXHIBITS ---------------------- EXHIBIT P1. TRUE COPY OF THE JUDGMENT DATED 18.01.2011 IN WPC NO.1680 OF2011 OF THIS HONOURABLE COURT. EXHIBIT P2. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE IST PETITIONER. EXHIBIT P2(a).TRUE COPY OF THE REPLY DATED 08.06.2012 GIVEN BY THE ISTPETITIONER TO THE IST RESPONDENT. EXHIBIT P3. TRUE COPY OF THE NOTICE NO.ARREAR COLLECTION/ITO(TDS)PKD/2011-12 DATED 18.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE2ND PETITIONER. EXHIBIT P4. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 3RD PETITIONER. EXHIBIT P5. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 4TH PETITIONER. EXHIBIT P6. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 5TH PETITIONER. EXHIBIT P7. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 6TH PETITIONER. EXHIBIT P8. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 7TH PETITIONER. EXHIBIT P9. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 8TH PETITIONER. EXHIBIT P10.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 9TH PETITIONER. EXHIBIT P11.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 10THPETITIONER. VK WP(C).No. 14226 of 2012 (C) --------------------------- EXHIBIT P7. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 6TH PETITIONER. EXHIBIT P8. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 7TH PETITIONER. EXHIBIT P9. TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 8TH PETITIONER. EXHIBIT P10.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 9TH PETITIONER. EXHIBIT P11.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 10THPETITIONER. VK WP(C).No. 14226 of 2012 (C) --------------------------- EXHIBIT P12.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 11THPETITIONER. EXHIBIT P13.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 12THPETITIONER. EXHIBIT P14.TRUE COPY OF THE NOTICE NO.ARREAR COLLECTION/ITO(TDS)PKD/2011-12 DATED 18.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE13TH PETITIONER. EXHIBIT P15.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 14THPETITIONER. EXHIBIT P16.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 15THPETITIONER. EXHIBIT P17.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 16THPETITIONER. EXHIBIT P18.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 17THPETITIONER. EXHIBIT P19.TRUE COPY OF THE NOTICE NO.ARREAR COLLECTION/ITO(TDS)PKD/2011-12 DATED 18.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE18TH PETITIONER. EXHIBIT P20.TRUE COPY OF THE NOTICE NO.ARREAR COLLECTION/ITO(TDS)PKD/2011-12 DATED 18.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE19TH PETITIONER. EXHIBIT P21.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 20THPETITIONER. EXHIBIT P22.TRUE COPY OF THE NOTICE NO.CO-OP.BANKS/ITO(TDS)/PKD/2011-12DATED 20.01.2012 RECEIVED FROM THE IST RESPONDENT BY THE 21STPETITIONER. EXT.P23. COPY OF THE NOTICE F. NO.ITO (CIB), CLT/2008-09 DATED2.02.2009 ISSUED BY THE INCOME TAX OFFICER (CIB), CALICUT. WP(C).No. 14226 of 2012 (C) --------------------------- RESPONDENTS' EXHIBITS : --------------------- EXT.R1(A). COPY OF THE ASSESSMENT ORDER IN RESPECT OF MADAICO-OPERATIVE BANK LTD., KANNUR DATED 16.12.2011. EXT.R1(B). COPY OF THE ORDER PASSED BY THE ITO (TDS), KANNUR ON THEDISTRICT TREASURY, KANNUR DATED 28.2.011. EXT.R1(C). COPY OF THE NOTICE ISSUED BY THE INCOME TX OFFICER (CIB)CALICUT TO KANNUR SERVICE CO-OP. BANK DATED 2.2.2009. EXT.R1(D). COPY OF THE NOTICE ISSUED BY THE INCOME TAX OFFICER(CIB) CALICUT TO THALAKKAD SERVICE CO-OP. BANK DATED 18.09.2009. / TRUE COPY / P.A. TO JUDGE P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.©Nos.14226,14846,15191,15286, 15330, 15736,1579016188, 17189, 17386, 17387 & 17653 OF 2012 ......................................................................... Dated this the 14[th] September, 2012 J U D G M E N T The petitioners are Primary Co-operative Societies/PrimaryAgricultural Credit Societies, who are aggrieved of the noticesissued by the concerned Income Tax Officer (TDS) asking: (1) to comply with the statutory requirementsunder Section 200(3) of the Income tax Act,submitting a statement in the Form24Q/26Q/27Q as applicable; (2) to furnish a list showing interestcredited/accrued in excess of Rs.5000/-( individuals and other than individuals) duringthe financial year 2010-11 and 01.04.2011 to31.12.2011 for verification and 15330, 2 W.P.©Nos.14226,14846,15191,15286, 15330, 15736,1579016188, 17189, 17386, 17387 & 17653 OF 2012 ......................................................................... Dated this the 14[th] September, 2012 J U D G M E N T The petitioners are Primary Co-operative Societies/PrimaryAgricultural Credit Societies, who are aggrieved of the noticesissued by the concerned Income Tax Officer (TDS) asking: (1) to comply with the statutory requirementsunder Section 200(3) of the Income tax Act,submitting a statement in the Form24Q/26Q/27Q as applicable; (2) to furnish a list showing interestcredited/accrued in excess of Rs.5000/-( individuals and other than individuals) duringthe financial year 2010-11 and 01.04.2011 to31.12.2011 for verification and 15330, 2 (3) to furnish copies of the provisional receipts issued by the NSDL office regardingreceipt of quarterly TDS statements for the lastthree Quarters of Financial year 2011-12 viz. 24Q, 26Q and 27Q and copies of Form No.16and 16A issued by the Bank for the FinancialYear 2010-11 and requirements. 2. According to the petitioners such notices are part of a rowing enquiry and amounts to calling for general informationunder Section 133(6) of the Income Tax Act (hereinafterreferred to as the Act); and that issuance of similar noticesunder Section 133(6) calling for such general information standsalready stayed by the Supreme Court in SLP.3976 of 2010. 3. The respondents in W.P.(C) 14226 of 2012 has filed adetailed statement (which is sought to be adopted in other cases as well) wherein, it has been asserted that the scope of thenotice issued has been wrongly understood by the petitioners. Ithas been asserted that the notice is not under Section 133(6) ofthe Income Tax Act, but for the purpose of assessment, since thepetitioners have failed to file the necessary returns under the Actand have not effected any TDS as prescribed and that it is verymuch necessary for the purpose of verification and to be dealtwith in tune with the relevant provisions of law. It is also pointedout that the relevant particulars have been called for as an initialstep, before issuing summons under Section 131 of the Act. 4. To understand the factual position in the correctperspective, it is necessary to extract the contents of thespecimen notice(Ext.P2) in W.P.(C) 14226 of 2012, which readsas follows: “Sir, Sub: Deduction of tax at source and filing of Quarterly e TDS Statements in Form 24Q/26Q/27Q - F.Y. 2010-11 & 2011-12 -Reg. As per Section 200(3) of the Income Tax Act, it is mandatory that any persondeducting any sum as TDS shouldprepare and submit a statement in theform 24Q/26Q/27Q as applicable, by theDeductor. You are therefore required tocomply with the provisions of ACTimmediately, if not already done, in orderto streamline taxpayers grievances andalso reconcile the mismatch. It is requested that, a list showinginterest credited/accrued in excess ofRs.5,000/- (individuals and other thanindividuals) during the F.Y. 2010-11 and1.4.2011 to 31/12/2011 may please beproduced for verification. Your are also requested to furnishcopies of provisional receipt issued by theNSDL office regarding receipt of quarterlyTDS statements for the last threeQuarters of F.Y.2011-12 viz. 24Q,26Q and27Q and copies of Form No.16 and 16A issued by the Bank for the Financial year2010-2011. It is also requested thatplease produce copy of acknowledgementfor Income Tax Return of the Bank filedand P & I Account and Balance sheet andannexures thereto for the F.Y. 2010-2011relevant to the Assessment Year 2011-2012. You are requested to appear before meeither in person or through an authorizedrepresentative with the details mentionedabove in my office at Aayakar Bhavan,English Church Road, Palakkad on22.02.2012 at 2.15 PM.Pleaseensure compliance.” Your are also requested to furnishcopies of provisional receipt issued by theNSDL office regarding receipt of quarterlyTDS statements for the last threeQuarters of F.Y.2011-12 viz. 24Q,26Q and27Q and copies of Form No.16 and 16A issued by the Bank for the Financial year2010-2011. It is also requested thatplease produce copy of acknowledgementfor Income Tax Return of the Bank filedand P & I Account and Balance sheet andannexures thereto for the F.Y. 2010-2011relevant to the Assessment Year 2011-2012. You are requested to appear before meeither in person or through an authorizedrepresentative with the details mentionedabove in my office at Aayakar Bhavan,English Church Road, Palakkad on22.02.2012 at 2.15 PM.Pleaseensure compliance.” 5. The learned Sr. Counsel Mr. T.M. Sreedharan appearingfor the petitioners/Soceity in W.P.(C) 14226 and 15191 of 2012submits that the petitioners in the said two cases do not haveany objection at all with regard to the requirement in the 'first'and 'third' paragraphs of the notice; whereas the objection is only with respect to the general information sought for, as tofurnishing of a 'list' showing the interest credited/accrued inexcess of Rs.5000/- for the relevant assessment years.According to the learned Sr. Counsel, this can only be treated aspart of collection of general information as emanating from theprovisions under Section 133(6) of the Income Tax Act. Whensimilar information was called for by the Income Tax Departmentfrom similar Societies earlier, asking to furnish particulars ofindividuals who are having deposits of more than Rs. one lakh orabove, such notices issued under Section 133(6) of the Act weresubjected to challenge before this Court by the aggrieved parties.The main contention in the said writ petitions was that the saidcourse was not permissible without the 'prior approval of theDirector' as specified under the 'second proviso' to Section 133(6), except in the course of an enquiry. Interference wasdeclined and the said writ petitions were dismissed by a SingleBench of this Court, which led to W.A.No.1854 of 2009 and W.P.©Nos.14226,14846,15191,15286,15330,15736,15790 16188, 17189, 17386, 17387 & 17653 OF 2012 7 connected cases. After considering the merits involved,interference was declined in the appeals as well, however,holding that, in so far as the notice did not disclose the factum ofprior approval, the files were directed to be verified, enabling therespondents to proceed with further steps, after getting priorapproval, in cases where such approval was not there. Beingaggrieved with the verdict as above, some of the Co-operativeSocieties approached the Apex Court by filing SLPs, such asSLP.3976 of 2010 and connected cases and the said mattersstand admitted, issuing notice and also granting interim stay.When similar matters came up for consideration before thisCourt, like W.P.(C) 1680 of 2011, pendency of the mattersbefore the Apex Court and the interim stay granted in SLP.3976of 2010 was taken note of and based on the submission madeby the learned Standing Counsel for the respondents, the writpetition was disposed of (as per Ext.P1 judgment dated18.01.2011) without prejudice to the rights of the Income Tax Department to take further action, in accordance with the ordersto be passed in the SLP, making it clear that the impugned noticeshall not be enforced till such time. The learned Sr. Counselsubmits that the impugned notices are yet further ones in thisguise, which hence are sought to be intercepted by filing thepresent writ petitions. Department to take further action, in accordance with the ordersto be passed in the SLP, making it clear that the impugned noticeshall not be enforced till such time. The learned Sr. Counselsubmits that the impugned notices are yet further ones in thisguise, which hence are sought to be intercepted by filing thepresent writ petitions. 6. The learned Counsel for the petitioners in the other writpetitions, while supporting the submissions of the learned Sr.Counsel who appeared for the petitioners in W.P.(C)Nos.14226 of2012 and 15191 of 2012 as aforesaid, have advanced anothersubmission as well, to the effect that the concerned petitioners/Societies are Primary Agricultural Credit Societies/ ServiceCo-operative Societies asdefined under Section 2(oa) ofthe Kerala Co-operative Societies Act and are taken care ofby the definition of the term 'co-operative Society' as givenunder Section 2(19) of the Income Tax Act. A certificate tothis effect as to the classification/registration of the Society as a 9 Primary Agricultural Credit Society has been produced in some writ petitions. Based on the said status, it is contendedthat such Societies stand specifically excluded from effecting anyTDSby virtue of clear stipulation under Section 194A(3)(viia)(a) of the Act. This being the position, they are not supposed toeffect any TDS in respect of the interest credited to the accountsof the members and hence are not supposed to comply with therequirements under Section 200(3) of the Act or such otherprovisions as pointed out in the impugned notices. 7. Mr. M.P. Ashok Kumar, the learned Counsel appearing for the petitioner in W.P.(C)No.15736 of 2012, Shri SajanVarghese, the learned Counsel for the petitioner in W.P.(C)No.14846 of 2012 and Mr..K.T.Thomas, the learned Counselappearing for the petitioners in the other cases assert that thecompetent authority to satisfy the status of the PetitionersSocieties as Primary Agricultural Credit Societies is thedepartmental authority in the State of Kerala and once a certificate is issued in this regard, it is no more open for theauthorities of the Income Tax Department to ignore the same orto pursue any independent fact finding exercise. 8. Mr. Jose Joseph, the learned Standing Counsel appearingfor the respondents submits with reference to the contents of thestatement filed in W.P.(C)No.14226 of 2012 that the idea andunderstanding of the petitioners as to the scope of the impugnednotice is quite wrong and misconceived. As discernible from thenotices produced and impugned, no reference is made toSec.133(6) and it is actually with reference to the mandatoryduty cast upon the Societies concerned under Section 200(3) ofthe Income Tax Act and such other requirements, particularly inthe course of verification of the facts and figures. The learnedCounsel further submits that several Co-operative Societiesproclaiming themselves as Agricultural Credit Societies andseeking exemption under Section 80P of the Act, have wronglyclaimed the benefits without meeting the requirements to be considered as Primary Agricultural Credit Societies. With reference to sub-section (4) of Section 80P, the learned Counsel submits that the Primary Agricultural Credit Society hasbeen referred to as a 'Society' as defined under the BankingRegulation Act and as such, the classification or the status asavailable in different States or the certificates issued accordinglycannot have any significance. To meet the requirements and tohave the status of Primary Agricultural Credit Society, themain object should be, to provide assistance in the AgriculturalSector. Several Societies claiming such benefits, on verificationof the accounts were found as having provided financialassistance in the agricultural sector only to a negligible extent,which cannot be considered as the main objective and hencethey cannot be considered as a Primary Agricultural CreditSocieties. submits that the Primary Agricultural Credit Society hasbeen referred to as a 'Society' as defined under the BankingRegulation Act and as such, the classification or the status asavailable in different States or the certificates issued accordinglycannot have any significance. To meet the requirements and tohave the status of Primary Agricultural Credit Society, themain object should be, to provide assistance in the AgriculturalSector. Several Societies claiming such benefits, on verificationof the accounts were found as having provided financialassistance in the agricultural sector only to a negligible extent,which cannot be considered as the main objective and hencethey cannot be considered as a Primary Agricultural CreditSocieties. 9. Reference is also made to the amended definition ofthe term 'Primary Agricultural Credit Society' as given under Section 2(oa) of the Kerala Co-operative Societies Act, wherebya 'proviso' was added as per the amendment brought about inthe year 2010 (as per Act 7 of 2010). As per the amendedprovision (second proviso), it is stipulated that, if the principalobject is not fulfilled, such societies shall lose all characteristicsof a Primary Agricultural Credit Society, as specified in theAct, Rules and Bye-laws except the existing staff strength.Thus, merely for the reason that a Society happens to beclassified or registered as an Agricultural Credit Society, that byitself is not enough to claim the benefit under the Income TaxAct and such Society has to continue to meet the obligation forwhich it was constituted, i.e., the principal object should befulfilled throughout, by providing agricultural credit activitiesand providing loans and advances for agricultural purposes. 10. The learned Counsel for the petitioners submits thatthe very constitution of the Society, the scope of enactment,particularly the Co-operative Societies Act and the concept has to be appreciated in the light of hard realities. The very co-operative movement was with a specific intent of socialobligation, to extend help and assistance to the needy generalpublic, with easy access and without need or necessity to facemuch hurdles. The petitioners Societies have to confine theirarea of operation to a particular Village/Panchayat/Municipalityand have to compete with other Public Sector Banks including inthe National Sector. It is in the said circumstance, that thepetitioners have been permitted to grant interest on depositsslightly at a higher rate than that is being provided by theScheduled Banks, to attract deposits. This is not governed by theRegulations of the RBI, but by the instructions of the Registrarof the Co-operative Societies in the State. When the petitionersare called for, to disclose the particulars of the individuals havingdeposits of Rs.One lakh or more or to provide particulars ofinterests given to an extent of more than Rs.5000/- per year, itwill unnecessarily cause embarrassment to the depositors, leading to 'deposit drain', affecting the very survival of theSocieties. It is also pointed out that, even going by the mandateof Section 194 A, the tax liability will be attracted only in respectof interests credited to an extent of more than Rs. 10,000/- andas such, there is no rationale in seeking for the particulars ofinterests credited to an extent of more than Rs.5000/- peryear. leading to 'deposit drain', affecting the very survival of theSocieties. It is also pointed out that, even going by the mandateof Section 194 A, the tax liability will be attracted only in respectof interests credited to an extent of more than Rs. 10,000/- andas such, there is no rationale in seeking for the particulars ofinterests credited to an extent of more than Rs.5000/- peryear. 11. The learned Sr. Counsel appearing for the petitioners inthe concerned cases submits that the idea of the Income TaxDepartment in demanding to furnish a 'list' of persons andparticulars in respect of interests credited to an extent of morethan Rs.5000/- is only to shift the work to be done by the staffand officers of the Income Tax Department, to the shoulders ofthe petitioners Societies. Even in the case of the Societies whoare supposed to effect TDS under Section 194A, once theparticulars as contemplated under Section 200(3) are provided inForm Nos.24Q, 26Q and 27Q, as applicable, it is open for the staff/officers of the Income Tax Department to get theparticulars of the deposits, generating interests of more thanRs.5000/- from the particulars revealed therefrom. Furnishing ofa 'list' in respect of such accounts is not a statutory requirementand as such, any additional work cannot be thrust upon thepetitioners Societies, who are virtually functioning on thestrength of minimum staff and who find it difficult to engage ordeploy the service of any other staff, so as to cater to therequirements of the Income Tax Department, to make thingseasy for them, that too, without any statutory backing.Appointment of any additional hands to do such work is notpermissible and even if allowed, it may have a bearing on theclassification of the Society, as to the staff strength inviting suchother adverse circumstances and hence not possible to bepursued. 12. During the course of hearing, the learned StandingCounsel for the respondents submits that notices issued by the Department earlier seeking for the particulars of the depositsgenerating interests of more than Rs. 5000/- and also seeking forsome other details, referring to the penalty provisions, had comeup for consideration before this Court in W.P.(C)No.4605 of 2010and connected cases, wherein interference was declined and allthe writ petitions were dismissed as per the judgment reportedin [(2010) 329 ITR 609 (Ker.)] (Thaliparamba MunicipalVanitha Service Sahakarana Sangham Ltd. vs. Income TaxOfficer (TDS) and another). It is stated that no appeal hasbeen preferred therefrom and it has become final. 13. Notices therein were issued seeking for the followingparticulars : ”1. Details of quarterly returns filed for the financial years 2006-07, 2007-08 and2008-09 2. Details of payment made towardsinterest (above Rs.5000) for the financialyears 2006-07, 2007-08 and 2008-09. W.P.©Nos.14226,14846,15191,15286,15736,15790 16188, 17189, 17386, 17387 & 17653 OF 2012 3. Copy of the profit and loss account and balance sheet for the financial years 2006-07, 2007-08 and 2008-09.” The said notices also required the addressee to show cause inwriting as to: 1. Why the assessee should not be treated as in default under Section 201(1)in respect of non-deduction/short eductionof tax, 2. Why interest under Section 201 (1A) should not be charged and 3. Why penal action underSection271C should not be initiated.” The contention of the Societies therein, that the Societies did not constitute a 'person' as defined under Section 2(31)of the Act,was considered meticulously and held against them and infavour of the Revenue; simultaneously sustaining the notices,referring to the purpose for which the notices have been issued. But, as on date, the scope of collection of particulars of payment balance sheet for the financial years 2006-07, 2007-08 and 2008-09.” The said notices also required the addressee to show cause inwriting as to: 1. Why the assessee should not be treated as in default under Section 201(1)in respect of non-deduction/short eductionof tax, 2. Why interest under Section 201 (1A) should not be charged and 3. Why penal action underSection271C should not be initiated.” The contention of the Societies therein, that the Societies did not constitute a 'person' as defined under Section 2(31)of the Act,was considered meticulously and held against them and infavour of the Revenue; simultaneously sustaining the notices,referring to the purpose for which the notices have been issued. But, as on date, the scope of collection of particulars of payment made towards interests to an extent of above Rs.5000/- for thefinancial years concerned, virtually is having a direct link withregard to the issue pending before the Apex Court. In view ofthe submissions made from the part of the Department in W.P.(C) 1680 of 2011 as covered by Ext.P1 judgment, referring to thependency of SLP, this Court finds that paragraph No. 2 (ie.particulars of the interest of more than Rs.5000/-) can beenforced, only subject to the outcome of the decision in thematter pending before the Apex Court. But this does not bar theDepartment from verifying the records pursuant to the materialsto be furnished by the concerned Societies, who are bound tocomply with Section 194A and Section 200(3) of the Income TaxAct, based on the facts and figures available therefrom, althoughand the burden to furnish a 'list' of the relevant particulars, neednot be shifted to the shoulders of the Societies concerned. 14. Coming to the next question, as to whether the petitioners have failed to comply with the requirement underSection 200(3) of the Income Tax Act, the liability to submit theparticulars in the relevant Form (i.e. 24Q, 26Q and 27Q) ismulcted only upon the persons, who are actually liable to deductthe tax at source as provided under Section 194A of the IncomeTax Act. By virtue of the mandate under Section 194A(3)(viia)(a) of the Act, the said provision is not applicable in respect ofdeposits with Primary Agricultural Credit Societies or PrimaryCredit Societies or Co-operative Land Mortgaged Banks or Co-operative Land Development Banks. The question is whether thepetitioners are entitled to have the benefits thereunder. 15. True, there is a reference to the Banking RegulationAct, 1949, as given in sub section (4) of Section 80P of theIncome Tax Act. A society claiming the benefit of exemptionunder Section 80P has necessarily to satisfy the requirementsand specifications of a Primary Agricultural Credit Society asdefined under the Banking Regulation Act. But coming to the instant cases and the impugned notices, the position issomething else. The cause is not with regard to the claim forexemption, but in respect of alleged necessity to have effectedTDS under Section 194A, in respect of interest on the depositsand also as to the particulars of deposits generating interests ofmore than Rs.5000/- per year. Sections 194A and 200(3) do notmake a reference to the term Primary Agricultural CreditSociety, as defined under the Banking Regulation act; more sosince Section 194A is applicable to all the persons concernedincluding the individuals and Body Corporates which takes ina Co-operative Society as well, by virtue of the definition of theterm 'person' under Section 2(31). Section 80P providesexemption only in respect of a Primary Agricultural Credit Societyas mentioned in sub section (4) and as such, the status of theSociety becomes more relevant, as defined under the BankingRegulation Act. However, this may not have much significanceto the case in hand, as pointed out in the statement filed by the respondents, that such objective has already been brought aboutby amending the Kerala Statute as well, incorporating the'second proviso' to the definition of the term PrimaryAgricultural Credit Society, as given under Section 2(oa) ofthe Kerala Co-operative Societies Act, as per Act 7 of 2010. 16. True, some of the petitioners have obtained a certificate as to the classification/registration as PrimaryAgricultural Credit Societies. But, by virtue of the amendment toSection 2(oa) of the Kerala Co-operative Societies Act, if theSociety does not continue to fulfill the obligation, it will lose thecolour and characteristics of a Primary Agricultural Credit Society,except for the purpose of staff strength. Thus, it is very muchobligatory for the petitioners Societies, who claim the status andthe benefits of Primary Agricultural Credit Societies, tosubstantiate that their main object of incorporation is beingcontinued to be fulfilled as well. As such , they have to obtain acertificate from the competent authority by producing the relevant facts and figures including the balance sheet, profit andloss accounts etc., that they satisfy the requirements of the'second proviso' to Section 2(oa) of the Act, to claim the status ofPrimary Agricultural Credit Societies so as to contend thatthey stand exempted by virtue of Section 194A(3)(viia)(a) of theAct and hence are not required to effect any TDS. As a naturalconsequence, they are not supposed to comply with therequirements of Section 200(3) as well, if they succeed. 17. As held already, it is for the petitioners to establish their status as Primary Agricultural Credit Societies byobtaining and producing the relevant certificate from thecompetent authority, as mentioned hereinbefore. It is also openfor the petitioners to opt to produce the relevant records beforethe Income Tax authorities as well, to establish their status andcredentials, that there is no lapse in fulfilling the objective asPrimary Agricultural Credit Societies so as to absolve fromfurther proceedings at the hands of the Income Tax Department, 15330, in relation to Section 194A and Section 200(3) of the Act. Soas to enable the petitioners to pursue such exercise, furtherproceedings shall be kept in abeyance for a period of threemonths from the date of receipt of a copy of the judgment. Ifthe petitioners fail to produce the certificates in the manner asspecified hereinbefore (with reference to the 'second proviso' toSection 2(oa) of the Kerala Co-operative Societies Act), it will beopen for the respondents to proceed with further steps inconnection with the requirements of Section 194A and Section200(3) of the Act. The writ petitions are disposed of as above. P.R. RAMACHANDRA MENON, JUDGE. lk