M/s. Noida Commercial Cooperative Bank Ltd., New Delhi v. ITO, Ghaziabad

ITA 5112/DEL/2014 | 2012-2013
Pronouncement Date: 31-07-2015 | Result: Dismissed
Expert Summary: The assessee was a co-operative society and was engaged in banking business. It made payment of interest to the members which by amount exceeded Rs.10,000/- but the tax on the same was not deducted by it. The Assessing Officer held that the assessee was liable to pay TDS. The Ld. CIT(A) upheld the order of the Assessing Officer. The Hon'ble tribunal held that the provisions of TDS are not applicable upto the extent of disbursements upto Rs.10,000/- while amount exceeding the above attracts the provisions of Sec.194A (Interest Other than Interest on Securities). Thus, the Hon'ble Tribunal dismissed the appeals of the Assessee.

Appeal Details

RSA Number 511220114 RSA 2014
Assessee PAN AAABN0147M
Bench Delhi
Appeal Number ITA 5112/DEL/2014
Duration Of Justice 10 month(s) 13 day(s)
Appellant M/s. Noida Commercial Cooperative Bank Ltd., New Delhi
Respondent ITO, Ghaziabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 31-07-2015
Date Of Final Hearing 06-07-2015
Next Hearing Date 06-07-2015
Assessment Year 2012-2013
Appeal Filed On 17-09-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.S. SYAL ACCOUNTANT MEMBER AND SHRI A.T. VARKEY JUDICIAL MEMBER ITA NOS.5112 & 5113/DEL./2014 (ASSESSMENT YEARS : 2012-13 & 2013-14) M/S. NOIDA COMMERCIAL COOPERATIVE BANK LTD. VS . ITO (TDS) 501 5 TH FLOOR SUNDARAM BUILDING GHAZIABAD (UP) RDC RAJ NAGAR GHAZIABAD. (PAN : AAABN0147M) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI O.P. SAPRA & SANDEEP SAPRA A DVOCATES REVENUE BY : SHRI P. DAM KANUNJNA SENIOR DR DATE OF HEARING : 09.07.2015 DATE OF PRONOUNCEMENT : 31.07.2015 O R D E R PER A.T. VARKEY JUDICIAL MEMBER : THE APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) GHAZIA BAD DATED 27.08.2014 FOR THE ASSESSMENT YEARS 2012-13 & 2013- 14. 2. THE GROUNDS OF APPEAL FOR ASSESSMENT YEAR 2012-1 3 READ AS UNDER :- 1. THAT THE APPELLANT WAS NOT LIABLE TO MAKE TDS O N THE INTEREST PAYMENTS MADE TO ITS MEMBERS ON THE DEPOSITS MADE B Y THEM IN VIEW OF PROVISION OF SECTION 194A(3)(V) OF THE I.T. ACT AND THEREFORE THE ORDER PASSED BY THE LD. ITO (TDS) U/ S 201 (1) AND 201 (1A) OUGHT TO HAVE BEEN CANCELLED/ANNULLED BY THE L D. CIT(A). ITA NOS.5112 & 5113/DEL./2014 2 2. THAT THE LD. ITO (TDS) HAD ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE BY HOLDING THAT THE APPELLANT (A COOPERATIVE BANK) WAS LIABLE TO MAKE TDS ON INTEREST PAID ON DEPOSITS BY ITS MEMBERS AS PER PROVISIONS OF SECTION 194A(3)(I)(B) OF THE L T. ACT WHICH IN FACT DID NOT APPLY TO THE FACTS OF APPELLANT'S CASE . THE ID. CIT(A) IS WRONG IN CONFIRMING THE ORDER PASSED BY THE LD. ITO (TDS). 3. THAT THE FOLLOWING DEMAND CREATED BY THE LD. ITO (TDS) AND CONFIRMED BY THE LD. CIT(A) AGAINST THE APPELLANT I S ARBITRARY UNJUST AND ILLEGAL: A) RS.36 44 493 ON ACCOUNT OF ALLEGED SHORT DEDUCTI ON U/S 201 B) RS.12 57 347 ON ACCOUNT OF INTEREST ON ALLEGED S HORT DEDUCTION U/S 201 (1A) TOTAL RS.49 01 840 VARIOUS OBSERVATIONS MADE BY THE AUTHORITIES BELOW IN THEIR RESPECTIVE ORDERS ARE EITHER INCORRECT OR ARE UNTEN ABLE. WRITTEN SUBMISSIONS AND THE CASE LAWS RELIED UPON BY THE AP PELLANT HAD BEEN COMPLETELY IGNORED BY NOT TAKING THEM INTO CONSIDER ATION WHILE DECIDING THE ISSUE. 4. THAT WITHOUT PREJUDICE TO GROUND NO. 1 TO 3 ABOV E THE DEMAND AS CREATED BY THE AO IS VERY EXCESSIVE. 5. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD AM END/MODIFY THE GROUNDS OF APPEAL. 3. THE GROUNDS OF APPEAL FOR ASSESSMENT YEAR 2013-1 4 ARE AS FOLLOWS :- 1. THAT THE APPELLANT WAS NOT LIABLE TO MAKE TDS O N THE INTEREST PAYMENTS MADE TO ITS MEMBERS ON THE DEPOSITS MADE B Y THEM IN VIEW OF PROVISION OF SECTION 194A(3)(V) OF THE I.T. ACT AND THEREFORE THE ORDER PASSED BY THE LD. ITO (TDS) U/ S 201 (1) AND 201 (1A) OUGHT TO HAVE BEEN CANCELLED/ANNULLED BY THE L D. CIT(A). 2. THAT THE LD. ITO (TDS) HAD ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE BY HOLDING THAT THE APPELLANT (A COOPERATIVE BANK) WAS LIABLE TO MAKE TDS ON INTEREST PAID ON DEPOSITS BY ITS MEMBERS AS PER PROVISIONS OF SECTION 194A(3)(I)(B) OF THE L T. ACT WHICH IN FACT DID NOT APPLY TO THE FACTS OF APPELLANT'S CASE . THE ID. CIT(A) IS WRONG IN CONFIRMING THE ORDER PASSED BY THE LD. ITO (TDS). ITA NOS.5112 & 5113/DEL./2014 3 3. THAT THE FOLLOWING DEMAND CREATED BY THE LD. ITO (TDS) AND CONFIRMED BY THE LD. CIT(A) AGAINST THE APPELLANT I S ARBITRARY UNJUST AND ILLEGAL: A) RS.41 27 401 ON ACCOUNT OF ALLEGED SHORT DEDUCTI ON U/S 201 B) RS. 6 81 049 ON ACCOUNT OF INTEREST ON ALLEGED S HORT DEDUCTION U/S 201 (1A) TOTAL RS.48 08 420 VARIOUS OBSERVATIONS MADE BY THE AUTHORITIES BELOW IN THEIR RESPECTIVE ORDERS ARE EITHER INCORRECT OR ARE UNTEN ABLE. WRITTEN SUBMISSIONS AND THE CASE LAWS RELIED UPON BY THE AP PELLANT HAD BEEN COMPLETELY IGNORED BY NOT TAKING THEM INTO CONSIDER ATION WHILE DECIDING THE ISSUE. 4. THAT WITHOUT PREJUDICE TO GROUND NO. 1 TO 3 ABOV E THE DEMAND AS CREATED BY THE AO IS VERY EXCESSIVE. 5. THAT THE APPELLANT RESERVES ITS RIGHT TO ADD AM END/MODIFY THE GROUNDS OF APPEAL. 4. SINCE COMMON ISSUES ARE INVOLVED THE BOTH THE AP PEALS ARE DECIDED TOGETHER. 5. THE SOLE GROUND BEFORE US IS WHETHER THE ASSESSE E SHOULD HAVE DEDUCTED TDS ON THE INTEREST DISBURSED TO ITS MEMBE RS. 6. THE APPELLANT/ASSESSEE IS A CO-OPERATIVE BANK RE GISTERED UNDER THE U.P. CO-OPERATIVE ACT 1965 AND CARRYING ON THE BAN KING BUSINESS AFTER OBTAINING THE LICENSE FROM RESERVE BANK OF INDIA SI NCE 1996. VIDE LETTER DATED 18.02.2014 ITO (TDS) GHAZIABAD HAD ASKED FOR THE DETAILS OF INTEREST PAID/PROVIDED IN EXCESS OF RS.10 000/- ON DEPOSITS MADE BY THE DEPOSITORS. ASSESSEE VIDE ITS REPLY DATED 22.02.20 14 FURNISHED THE ITA NOS.5112 & 5113/DEL./2014 4 REQUIRED INFORMATION SUBMITTING THAT NO TDS WAS REQ UIRED TO BE DEDUCTED AS PER PROVISIONS OF SECTION 194A (3)(V) OF THE INC OME-TAX ACT 1961 (HEREINAFTER THE ACT). THE ASSESSEE CONTENDED TH AT FOR THE LAST 18 YEARS THE ASSESSEE IS DOING BANKING BUSINESS AND AS PER C LEAR PROVISION OF SECTION 194A(3)(V) OF THE ACT IT WAS NOT REQUIRED TO DEDUC T THE TAX AT SOURCE ON INTEREST PAYMENT TO ITS MEMBERS AND ACCORDINGLY HAD NOT BEEN DEDUCTING THE TAX AT SOURCE ON INTEREST PAYMENT TO ITS MEMBER S. ON 24.02.2014 THE ITO (TDS) HAS PASSED THE ORDER UNDER SECTION 201 OF THE ACT HOLDING THAT ASSESSEE WAS REQUIRED TO DEDUCT THE TAX AT SOURCE R ELYING ON THE ITAT PANAJI (GOA) BENCH DECISION IN THE CASE OF BAILHONG AL URBAN COOPERATIVE BANK LTD. V. JCIT AND CREATED A DEMAND OF RS.49 01 840/- AS UNDER :- SHORT DEDUCTION U/S 201 RS.41 27 401/- INTT. U/S 201 (1A) RS. 6 81 049/- TOTAL RS.48 08 420/- 7. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE LD. CIT (A) WHEREIN RELIANCE WAS PLACED ON CBDT CIRCULAR AND VA RIOUS CASE LAWS. HOWEVER THE LD. CIT (A) CONFIRMED THE ORDER PASSED BY THE ITO (TDS). AGGRIEVED BY THE SAID DECISION OF LD. CIT (A) THE ASSESSEE IS BEFORE US. 8. THE LD. AR SHRI O.P. SAPRA TOOK OUR ATTENTION T O THE RELEVANT PROVISIONS OF SECTION 194A OF THE ACT WITH REGARD TO CO-OPERATIVE SOCIETIES WHICH ARE REPRODUCED BELOW:- ITA NOS.5112 & 5113/DEL./2014 5 '194A (3) THE PROVISIONS OF SUB-SECTION (1) SHALL N OT APPLY- [(I) WHERE THE AMOUNT OF SUCH INCOME OR AS THE CAS E MAY BE THE AGGREGATE OF THE AMOUNTS OF SUCH INCOME CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR BY THE PERSON REFERRED TO IN SUB-SECTION (1) TO THE ACCOUN T OF OR TO THE PAYEE [DOES NOT EXCEED- (A) .. (B) TEN THOUSAND RUPEES WHERE THE PAYER IS A CO-O PERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING; (C) (D) (II) (III) (IV) (V) TO SUCH INCOME CREDITED OR PAID BY A CO-OPERATI VE SOCIETY [TO A MEMBER THEREOF OR] TO ANY OTHER CO-OPERATIVE SOCIET Y;] FURTHER LD. AR SUBMITTED THAT FINANCE BILL 2015 HA S PROPOSED AN AMENDMENT IN SECTION 94A(3)(V) BY INSERTING CLAUSE 42 AS FOLLOWS :- CLAUSE 42. IN SECTION 194A OF THE INCOME-TAX ACT IN SUB-SECTION (3) WITH EFFECT FROM 1ST DAY OF JUNE 2015 - (B) IN CLAUSE (V) FOR THE WORDS 'PAID BY A CO-OPER ATIVE SOCIETY TO A MEMBER THEREOF OR' THE WORDS AND BRACKETS 'PAID B Y A CO-OPERATIVE SOCIETY (OTHER THAN A CO-OPERATIVE BANK) TO A MEMBE R THEREOF OR TO SUCH INCOME CREDITED OR PAID BY A CO-OPERATIVE SOCIETY' SHALL BE SUBSTITUTED; SO ACCORDING TO THE LD. AR FROM THE PLAIN READING OF THE ABOVE PROVISION IT IS EVIDENT THAT AS PER SECTION 194A(3)(V) INTER EST PAID BY A CO-OPERATIVE SOCIETY TO ITS MEMBERS IRRESPECTIVE OF THE NATURE O F DEPOSIT OR AMOUNT IS EXEMPT FROM DEDUCTION OF TDS. HE ALSO BROUGHT TO OUR NOTICE THAT CBDT HAD ISSUED A CIRCULAR NO.9 OF 2002 AND THE RELEVANT PORTION IS REPRODUCED BELOW:- ITA NOS.5112 & 5113/DEL./2014 6 1. . 2. REPRESENTATIONS HAVE BEEN RECEIVED IN THE BOARD SEEKING CLARIFICATION AS TO WHETHER A MEMBER OF A CO-OPERAT IVE BANK MAY RECEIVE WITHOUT TDS INTEREST ON TIME DEPOSIT MADE W ITH THE CO- OPERATIVE BANK ON OR AFTER 1-7-1995. THE BOARD HAS CONSIDERED THE MATTER AND IT IS CLARIFIED THAT A MEMBER OF A CO-OP ERATIVE BANK SHALL RECEIVE INTEREST ON BOTH TIME DEPOSITS AND DEPOSITS OTHER THAN TIME DEPOSITS WITH SUCH CO-OPERATIVE BANK WITHOUT TDS UN DER SECTION 194A BY VIRTUE OF THE EXEMPTION GRANTED VIDE CLAUSE (V) OF SUB- SECTION (3) OF THE SAID SECTION. THE PROVISIONS OF CLAUSE (VIIA) OF THE SAID SUB-SECTION ARE APPLICABLE ONLY IN CASE OF A N ON-MEMBER DEPOSITOR OF THE CO-OPERATIVE BANK WHO SHALL RECEI VE INTEREST ONLY ON DEPOSITS OTHER THAN TIME DEPOSITS MADE ON OR AFTER 1-7-1995 WITHOUT TDS UNDER SECTION 194A'. HE FURTHER CONTENDED THAT THE ABOVE CIRCULAR CLINCH ES THE ISSUE IN FAVOUR OF THE ASSESSEE WHICH IS BINDING ON THE REVENUE AS HEL D BY THE HONBLE SUPREME COURT IN THE CASE OF K.P. VARGHESE VS. ITO 131 ITR 597. 8.1 THE LD. AR SUBMITTED THAT IN THE PRESENT CASE ITO (TDS) HAS PASSED AN ORDER U/S 201/201(1A) RELYING UPON THE ITAT PANA JI (GOA) BENCH DECISION IN ITA NO. 85/PNJ/2013 DATED 28/08/2013 TH E CASE OF BAILHONGAL URBAN COOPERATIVE BANK LTD. V. JCIT WHICH DISTINGUI SHED THE COOPERATIVE BANK AND COOPERATIVE SOCIETY AND ALSO HELD THAT COO PERATIVE BANK WAS LIABLE TO DEDUCT THE TAX AT SOURCE ON INTEREST PAYM ENTS MADE ON DEPOSITS BY MEMBERS. ACCORDING TO THE LD. AR THE ABOVE DECISIO N OF PANAJI ITAT BEING NOT OF JURISDICTIONAL ITAT WAS NOT BINDING ON THE AUTHORITIES BELOW. HE SUBMITTED THAT IN ASSESSEE'S CASE CONTRARY TO T HE ABOVE JUDGMENT THERE ARE VARIOUS OTHER JUDGMENTS WHICH ARE IN FAVOUR OF ASSESSEE AND THE SAME ARE REPRODUCED BELOW:- ITA NOS.5112 & 5113/DEL./2014 7 (I) IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME -TAX CIRCLE 1 (1) VISAKHAPATNAM V. VISAKHAPATNAM COOPERATIVE BANK LTD . REPORTED IN [2011] 13 TAXMANN.COM 190 (VISAKHAPATNAM) (COPY PLACED AT PAGES 55-68 OF PAPER BOOK IN WHICH IT HAS BEEN HELD THAT 'SECTION 194A(3) PRESCRIBES THE MONETARY LIMITS AND ALSO A L IST OF PAYMENTS WHICH ARE EXEMPT FROM THE REQUIREMENT OF COMPLYING WITH THE PROVISIONS OF TDS PRESCRIBED UNDER SUB-SECTION (1) OF THAT SECTION. SECTION 194A(3)(V) PROVIDES BLANKET EXEMPTION TO TH E INTEREST PAID BY ANY CO-OPERATIVE SOCIETY TO ITS MEMBERS. NEITHER SECTION 2(19) NOR SECTION 194A(3) MAKES ANY DISCRIMINATION BETWEE N THE CO- OPERATIVE SOCIETIES CARRYING ON BANKING BUSINESS AN D OTHER CO- OPERATIVE SOCIETIES. HOWEVER AS PER SECTION 194A(3 ) THE SAID EXEMPTION IS AVAILABLE ONLY TO THE INTEREST PAYMENT S MADE TO ITS MEMBERS OR TO ANY OTHER CO-OPERATIVE SOCIETY. IN TH E INSTANT CASE IT IS THE CLAIM OF THE ASSESSEE THAT ALL THE INTEREST PAYMENTS HAVE BEEN MADE ONLY TO ITS MEMBERS. IN THAT CASE THE ASSESSE E IS SQUARELY COVERED BY THE EXEMPTION PROVIDED UNDER SECTION 194 A(3)(V). ACCORDINGLY THE ORDER PASSED BY THE COMMISSIONER ( APPEALS) WAS TO BE UPHELD. [PARA 4].' (II) IN THE CASE OF ASSISTANT COMMISSIONER OF INCOM E-TAX CIRCLE-1 NASHIK V. OZER MERCHANT CO-OPERATIVE BANK LTD. REPO RTED IN [2014] 41 TAXMANN.COM 110 (PUNE - TRIB.) (COPY AT P AGES 69-72 OF PAPER BOOK) IT HAS BEEN HELD 'IN THIS BACKGROUND THE CIT(A) HAS CONCLUDED THAT ASSESSEE HAD CREDITED THE IMPUGNED I NTEREST TO THE CREDIT OF THE MEMBERS AND NO TAX WAS REQUIRED TO B E DEDUCTED IN VIEW OF SECTION 194A(3)(V) OF THE ACT. THE AFORESAI D FINDING OF THE CIT(A) HAS NOT BEEN CONTROVERTED BY THE REVENUE BEFORE US ON THE BASIS OF ANY COGENT MATERIAL OR REASONING. IN T HE ABSENCE OF ANY COGENT MATERIAL BROUGHT OUT BY THE REVENUE WE HERE BY AFFIRM THE AFORESAID CONCLUSION OF THE CIT(A). ACCORDINGLY TH E CIT(A) WAS JUSTIFIED IN HOLDING THAT ON ACCOUNT OF SECTION 194 A(3)(V) OF THE ACT ASSESSEE WAS NOT LIABLE TO DEDUCT TDS ON THE I MPUGNED PAYMENTS AND THUS INVOKING OF SECTION 40(A)(IA) OF THE ACT BY THE ASSESSING OFFICER HAS BEEN RIGHTLY SET ASIDE. THE R EVENUE FAILS ON THIS GROUND AS WELL. (III) IN ITA NO. 802/BANG/2013 IN THE CASE OF SHRI SINDAGI URBAN CO- OPERATIVE BANK LTD. V. JCIT (2014) (COPY PLACED AT PAGES 73-109 OF PAPER BOOK) HONBLE BANGALORE BENCH OF ITAT HAS HELD THAT IN THE LIGHT OF THE ABOVE FACT AND ANALYSIS OF THE PROVISIONS ONE CAN CONCLUDE THAT THE INTENTION OF THE ACT WAS TO C ONFER SOME BENEFIT TO THE MEMBERS OF A CO-OPERATIVE SOCIETY I NCLUDING A CO- OPERATIVE SOCIETY ENGAGED IN BANKING BUSINESS THAT IS A CO- OPERATIVE BANK. THEREFORE THE APPELLANT IS ENTITLE D TO EXEMPTION SPECIFIED IN SECTION 194A(3)(V). ITA NOS.5112 & 5113/DEL./2014 8 (IV) IN A RECENT CASE OF BAGALKOT DISTRICT CENTRAL CO-OP. BANK V. JOINT COMMISSIONER OF INCOME-TAX BIJAPUR RANGE BIJAPUR [2014] 48 TAXMANN.COM 117 (BANGALORE - TRIB.) (COPY PLACED AT PAGES 110- 121 OF PAPER BOOK) HON'BLE BANGALORE BENCH OF ITAT HAS HELD THAT :- '18. IT CAN BE SEEN FROM PARA-2 OF THE CIRCULAR REF ERRED TO ABOVE THAT THE CBDT HAS VERY CLEARLY LAID DOWN THAT CO- OPERATIVE SOCIETIES CARRYING ON BANKING BUSINESS WH EN IT PAYS INTEREST ON DEPOSITS BY ITS MEMBERS NEED NOT D EDUCT TAX AT SOURCE. THE ABOVE INTERPRETATION OF THE PROV ISIONS BY THE CBDT WHICH IS IN FAVOUR OF THE ASSESSEE IN OU R VIEW IS BINDING ON THE TAX AUTHORITIES. 19. IN THE CASE DECIDED BY ITAT PANAJI BENCH IN ITA NO.85/PN/2013 FOR AY 09-10 IN THE CASE OF THE BAILH ONGAL URBAN CO-OP BANK LTD. (SUPRA) ORDER DATED 28.8.2013 THE TRIBUNAL PROCEEDED ON THE FOOTING THAT THE AFORESAI D CIRCULAR HAS BEEN QUASHED BY THE HON'BLE BOMBAY HIGH COURT I N THE CASE OF THE JALGAON DISTRICT CENTRAL CO-OPERATIVE B ANK LTD. (SUPRA) AND THEREFORE CHOSE TO FOLLOW THE DECISION RENDERED BY PUNE ITAT SMC IN THE CASE OF BHAGANI NIVEDITA SAHAKARI BANK LTD. (SUPRA). IN OUR VIEW THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF JALGAON DISTRICT C ENTRAL CO-OPERATIVE BANK LTD.'S CASE (SUPRA) WAS DEALING W ITH A CASE OF CHALLENGE TO PARA-3 OF CBDT CIRCULAR NO.9 D ATED 11.9.2002 WHICH TRIED TO INTERPRET THE WORD 'MEMBER ' AS GIVEN IN SEC. 194A(3)(V) OF THE ACT. IT IS ONLY THA T PART OF THE CIRCULAR THAT HAD BEEN QUASHED BY THE HON'BLE B OMBAY HIGH COURT AND THE OTHER PARAGRAPHS OF THE CIRCULAR HAD NO CONNECTION WITH THE ISSUE BEFORE THE HON'BLE BOMBAY HIGH COURT. HOW COULD IT BE SAID THAT THE ENTIRE CIRCULA R HAS BEEN QUASHED BY THE HON'BLE BOMBAY HIGH COURT? IN OUR VI EW PARA-2 OF THE CIRCULAR STILL HOLDS GOOD AND THE CON CLUSION OF THE ITA T PUNE BENCH IN THE CASE OF THE BAILHONGAL URBAN CO-OP BANK LTD. (SUPRA) ARE NOT FACTUALLY CORRECT. CONSEQUENTLY THE CONCLUSIONS DRAWN IN THE AFORESAI D DECISION ALSO CONTRARY TO FACTS AND HENCE CANNOT BE CONSIDERED AS PRECEDENT. 20. THE LEARNED COUNSEL FOR THE ASSESSEE HAS BROUGH T TO OUR NOTICE THAT THE ITAT VISHAKAPATNAM BENCH IN THE CASE OF THE ASSTT. CIT V. VISAKHAPATNAM CO-OPERATIVE BAN K LTD. [2011] 47 SOT 295/13 TAXMANN.COM 190 HAS HELD THAT CO- OPERATIVE SOCIETIES CARRYING ON BANKING BUSINESS WH EN IT ITA NOS.5112 & 5113/DEL./2014 9 PAYS INTEREST TO ITS MEMBERS ON DEPOSITS IT NEED NO T DEDUCT TAX AT SOURCE IN VIEW OF THE PROVISIONS OF SEC. 194 A(3)(V) OF THE ACT. SIMILAR VIEW HAS ALSO BEEN EXPRESSED BY TH E PUNE BENCH OF THE ITA T IN THE CASE OF ASSTT. CIT V. OZE R MERCHANT CO-OPERATIVE BANK LTD. [2014] 62 SOT 14/41 TAXMANN.COM 110. WE MAY ADD THAT IN BOTH THESE DECI SIONS THE DISCUSSION DID NOT TURN ON THE INTERPRETATION O F SEC.194A(3)(I)(B) OF THE ACT VIS-A-VIS SEC.194A(3)( V) OF THE ACT. IT IS THUS CLEAR THAT THE PREPONDERANCE OF JUD ICIAL OPINION ON THIS ISSUE IS THAT CO-OPERATIVE SOCIETIE S CARRYING ON BANKING BUSINESS WHEN IT PAYS INTEREST TO ITS ME MBERS ON DEPOSITS. NEED NOT DEDUCT TAX AT SOURCE IN VIEW OF THE PROVISIONS OF SEC. 194A(3)(V) OF THE ACT. 21. FOR THE REASONS GIVEN ABOVE WE HOLD THAT THE ASSESSEE WHICH IS A CO-OPERATIVE SOCIETY CARRYING O N BANKING BUSINESS WHEN IT PAYS INTEREST INCOME TO A MEMBER BOTH ON TIME DEPOSITS AND ON DEPOSITS OTHER THAN TI ME DEPOSITS WITH SUCH CO-OPERATIVE SOCIETY NEED NOT DE DUCT TAX AT SOURCE UNDER SECTION 194A BY VIRTUE OF THE EXEMP TION GRANTED VIDE CLAUSE (V) OF SUB-SECTION (3) OF THE S AID SECTION'. THE LD. AR CONTENDED THAT IN THE ABOVE REFERRED DEC ISION BANGALORE ITAT HAS CLEARLY DISTINGUISHED THE DECISION OF BAILHONGA L URBAN COOPERATIVE BANK LTD. V. JCIT AND DEALT WITH THE CBDT CIRCULAR NO. 9/2002 (SUPRA). IT IS ALSO CLEAR THAT CBDT CIRCULAR NO. 9/2002( SUP RA) CONTAINS THREE PARAS. IN SECOND PARA CBDT HAS CATEGORICALLY CLARIFIED AS FOLLOWS:- ' THE BOARD HAS CONSIDERED THE MATTER AND IT IS CLA RIFIED THAT A MEMBER OF A CO-OPERATIVE BANK SHALL RECEIVE INTERES T ON BOTH TIME DEPOSITS AND DEPOSITS OTHER THAN TIME DEPOSITS WITH SUCH CO-OPERATIVE BANK WITHOUT TDS UNDER SECTION 194A BY VIRTUE OF TH E EXEMPTION GRANTED VIDE CLAUSE (V) OF SUB-SECTION (3) OF THE S AID SECTION' . THE LD. AR TOOK OUR ATTENTION TO THE FINANCE BILL 2 015 AND CONTENDED THAT THE ABOVE AMENDMENT IS EFFECTIVE FROM 1.6.2015 AND FROM 1.6.2015 COOPERATIVE BANK SHALL BE LIABLE TO DEDUCT THE TAX AT SOURCE ON INTEREST PAID ITA NOS.5112 & 5113/DEL./2014 10 TO ITS MEMBERS MEANING THEREBY THAT EARLIER COOPER ATIVE BANKS WERE NOT LIABLE TO DEDUCT THE TAX AT SOURCE ON INTEREST PAID TO ITS MEMBERS BY VIRTUE OF SECTION 194A(3)(V) OF THE ACT. HE SUBMITTED TH AT IT HAS TO BE NOTED THAT THE ABOVE AMENDMENT IS PROSPECTIVE AND NOT MADE RET ROSPECTIVE. THE LD. AR CONTENDED THAT AS MENTIONED IN PARA 1 AT PAGE 1 OF THE SYNOPSIS SINCE LAST 18 YEARS ASSESSEE IS DOING BANKING BUSINESS A ND IT HAD NOT BEEN MAKING ANY TDS ON THE INTEREST PAID/PAYABLE TO ITS MEMBERS KEEPING IN VIEW SECTION 194A(3)(V) OF THE I.T. ACT. ACCORDING TO HIM NEVER IN THE PAST THE REVENUE HAD DECLARED THE APPELLANT BANK I N DEFAULT FOR SHORT/NON DEDUCTION OF TAX U/S 201 OF THE ACT. THEREFORE RU LES OF CONSISTENCY ALSO APPLIES IN THIS CASE. RELIANCE WAS PLACED ON THE FO LLOWING CASE LAWS: (I) 193 ITR 321-323 RADHASOAMI SATSANG VS. CIT (SUPREM E COURT) ALSO FOLLOWED BY P & H HIGH COURT IN 278 ITR 262. (II) 264 ITR 276 CIT VS. ARG SECURITIES PRINTERS (JURIS DICTIONAL DELHI HIGH COURT). (III) 300 ITR 75 (DELHI) DIRECTOR OF INCOME TAX (E) ESC ORTS CARDIAC DISEASES. LD. AR ALSO BROUGHT TO OUR NOTICE THE ORDER PASSED BY IN THE CASE OF KASHIPUR URBAN COOPERATIVE BANK LTD. VS. ITO IN ITA NO.5329/DEL/2013 DATED 14.11.2014 FOR ASSESSMENT YEAR 2012-13 WHEREI N THE ORDER WAS PASSED BY THE AUTHOR OF THIS ORDER RELYING ON THE D ECISION OF VIZAG BENCH OF ITAT IN THE CASE OF VISHAKAPATNAM CO-OPERATIVE B ANK VS. DIT IN ITA NO.5/2011 & 19/2011 AND HELD THAT THE ASSESSEE COOP ERATIVE BANK WAS NOT ITA NOS.5112 & 5113/DEL./2014 11 OBLIGED TO DEDUCT TDS ON THE INTEREST PAID TO ITS M EMBERS. LD.AR CONCLUDED THAT THUS VIEWED FROM WHATEVER ANGLE THE APPEAL DESERVES TO BE ALLOWED BECAUSE THE ISSUE IS FULLY COVERED BY VARIO US JUDGMENTS AND THE CBDT CIRCULAR AS CITED ABOVE. 9. THE LD. DR SUBMITTED THAT THE ASSESSEE SOCIETY H AS DISBURSED INTEREST TO ITS MEMBERS AND THE ITO (TDS) HAS SOUGHT THE DET AILS OF INTEREST GIVEN MORE THAN RS.10 000/- SINCE AS PER SECTION 194A(3 )(I) (B) EXEMPTION OF INTEREST PAID BY CO-OPERATIVE SOCIETY ENGAGED IN BA NKING BUSINESS UP TO RS.10 000/- TO MEMBERS AS WELL AS NON-MEMBERS IRRES PECTIVE OF THE NATURE OF DEPOSIT IS EXEMPT. THEREFORE ITO (TDS) HAS RIGH TLY MADE THE ADDITION BECAUSE THE ASSESSEE SOCIETY FAILED TO DEDUCT TAX A T SOURCE. SO THEREFORE THE LD. CIT(A) IS RIGHT IN CONFIRMING THE ORDER OF THE ITO (TDS) AND WE NEED NOT INTERFERE IN THE IMPUGNED ORDER. 10. WE HAVE HEARD BOTH THE PARTIES PERUSED THE REC ORDS AND GONE THROUGH THE CASE LAWS CITED BEFORE US. WE FIND THAT THE ASSESSEE IS A CO- OPERATIVE SOCIETY ENGAGED IN BANKING BUSINESS. SEC TION 194A(3) OF THE ACT PRESCRIBES THE MONETARY LIMITS AND ALSO LIST OF PAYMENT WHICH ARE EXEMPT FROM THE REQUIREMENT OF COMPLYING THE PROVIS ION OF TDS PRESCRIBED UNDER SUB-SECTION (I) TO THAT SECTION. SECTION 194A(3)(I)(B): EXEMPTION OF INTEREST PAID BY A CO-OPERATIVE SOCIETY ENGAGED IN BANKING BUSINESS. UP TO RS .10 0 00/- TO MEMBERS AS WELL AS NON MEMBERS IRRESPECTIVE OF THE NATURE OF D EPOSIT IS EXEMPT. ITA NOS.5112 & 5113/DEL./2014 12 SECTION 194A(3)(V) : EXEMPTION OF INTEREST PAID BY A CO-OPERATIVE SOCIETY TO ITS MEMBERS IRRESPECTIVE OF THE NATURE OF DEPOSIT IS OR AMOUNT SECTION 194A(3)(VIIA) (A): EXEMPTION OF INTEREST P AID BY PERSONS NAMELY. PRIMARY AGRICULTURE CREDIT SOCIETY . PRIMAR Y CREDIT SOCIETY CO- OPERATIVE LAND MORTGAGE BANK OR A CO-OPERATIVE LAND DEVELOPMENT BANK TO MEMBERS OR NON-MEMBERS WITHOUT ANY MONETARY LIMIT. SECTION 194A (3) (VIIA) (B) : EXEMPTION OF INTERES T PAID BY PERSONS NAMELY CO-OPERATIVE SOCIETY ENGAGED IN BANKING BUS INESS IRRESPECTIVE OF MEMBERSHIP OF AMOUNT ONLY TO NON-TIME DEPOSITS. A PLAIN READING OF THE PROVISIONS OF SECTION 194A(3 )(I)(B) ABOVE CLEARLY INDICATES THAT EXEMPTION FOR INTEREST PAID BY CO-OP ERATIVE SOCIETY ENGAGED IN BANKING BUSINESS IS EXEMPT FROM DEDUCTION OF TAX AT SOURCE UP TO AN AMOUNT OF RS.10 000/-. THEREFORE EXEMPTION FOR INT EREST IS UP TO RS 10 000/-. THUS WE CAN SEE A THRESHOLD LIMIT OF RS 1 0 000/- HAS BEEN PRESCRIBED BY THE SAID PROVISION MEANING ANY INTER EST DISBURSAL ABOVE RS 10 000/- ATTRACTS TDS. THE LD. ARS CONTENTION THAT SINCE SECTION 194A(3)(V) EXEMPT ANY INTEREST PAID BY CO-OPERATIVE SOCIETY TO ITS MEMBERS IRRESPECTIVE OF NATURE OF DEPOSIT OR AMOUNT THE ACTION OF THE ASSESSEE SOCIETY ENGAGED IN BANKING NOT TO DEDUCT TAX AT SOURCE IS VALID IS ACCORDING TO US NOT CORRECT. AND IT MAY BE NOT ED THAT SECTION 194A(3)(V) IS A GENERAL PROVISION WHICH ENCOMPASSES WITH IT CO-OPERATIVE SOCIETY AS A WHOLE WHICH MAY BE TERMED AS GENUS W HEREAS THE ASSESSEE CO-OPERATIVE SOCIETY IS INTO BANKING CAN BE TERMED AS A SPECIES OF THE SAID GENUS; AND SECTION 194A(3)(I)(B) IS A SPECIAL PROV ISION FOR CO-OPERATIVE ITA NOS.5112 & 5113/DEL./2014 13 SOCIETY ENGAGED IN BANKING BUSINESS. THE MAXIM GENERALIA SPECIALIBUS NON DEROGANT MEANS LITERALLY THAT GENERAL PROVISIONS WILL NOT A BROGATE SPECIAL PROVISIONS. WHEN THE LEGISLATURE HAS GIVEN ITS ATTENTION TO A SEPARATE SUBJECT AND MADE PROVISION FOR IT THE PRE SUMPTION IS THAT A SUBSEQUENT GENERAL ENACTMENT IS NOT INTENDED TO INT ERFERE WITH THE SPECIAL PROVISION UNLESS IT MANIFESTS THAT INTENTION VERY C LEARLY. THE MAXIM HAS BEEN FREQUENTLY APPLIED TO RESOLVE APPARENT CONFLIC TS BETWEEN PROVISIONS OF THE SAME STATUTE OR OF DIFFERENT STATUTES AND APPLY ING THE SAID MAXIM TO THE INSTANT CASE WE FIND THAT ARGUMENT OF THE LD AR T HAT SECTION 194A(3)(V) ABSOLVES ASSESSEE FROM DEDUCTING TDS CANNOT BE ACC EPTED. FURTHER THE ORDER OF THE TRIBUNAL IN THE CASE OF KASHIPUR URBAN COOPERATIVE BANK LTD VS. ITO KASHIPUR (ITA NO.5329/D/2013 FOR ASSESSMEN T YEAR 2012-13) WAS CITED BEFORE US WHEREIN ONE OF US IS THE AUTHO R OF THIS ORDER AND SAID CO-OPERATIVE BANKS CONTENTION THAT IT NEED NOT DED UCT TAX AT SOURCE WAS UPHELD TO OUR CONSIDERED OPINION IN THE LIGHT OF THE EXPRESS PROVISION AS NOTED ABOVE IS A PER-INCURIAM ORDER AND IN THAT O RDER THE APPLICATION OF SECTION 194A(3)(I)(B) TO CO-OPERATIVE BANK WAS NOT BROUGHT TO THE NOTICE OF THE BENCH. IT MAY BE NOTED THAT PER INCURIAM AND SUB SILENTIO ARE EXCEPTIONS TO THE CONCEPT OF STARE DECISIS. SIR JOH N SALMOND IN HIS TREATISE ON JURISPRUDENCE HAS APTLY STATED THE CIRCUMSTANCES UNDER WHICH A PRECEDENT CAN BE TREATED PER INCURIAM. A PRECEDENT IS NOT BINDING IF IT WAS RENDERED IN IGNORANCE OF A STATUTE OR A RULE HAVING THE FORCE OF STATUTE I.E. ITA NOS.5112 & 5113/DEL./2014 14 IN IGNORANCE OF A STATUTE OR A RULE HAVING THE FORC E OF STATUTE I.E. DELEGATED LEGISLATION. THIS RULE WAS LAID DOWN FOR THE HOUSE OF LORDS BY LORD HALSBURY IN THE LEADING CASE (LONDON STREET TRAMWAY S V. L.C.C. (1898) A.C. 375) AND FOR THE COURT OF APPEAL IT WAS GIVEN AS THE LEADING EXAMPLE OF A DECISION PER INCURIAM WHICH WOULD NOT BE BINDI NG ON THE COURT [YOUNG VS. BRISTOL AEROPLANCE CO. LTD. (194) K.B. A T 729 (C.A.)]. THE RULE APPARENTLY APPLIES EVEN THOUGH THE EARLIER COU RT KNEW OF THE STATUTE IN QUESTION IF IT DID NOT REFER TO AND HAD NOT PRESE NT TO ITS MIND THE PRECISE TERMS OF THE STATUTE. SIMILARLY A COURT MAY KNOW O F THE EXISTENCE OF A STATUTE AND YET NOT APPRECIATE ITS RELEVANCE TO THE MATTER IN HAND; SUCH A MISTAKE IS AGAIN SUCH INCURIA AS TO VITIATE THE DE CISION. EVEN A LOWER COURT CAN IMPUGN A PRECEDENT ON SUCH GROUNDS. (SALMOND O N JURISPRUDENCE 12TH EDITION PAGES 151 AND 152) C.K. ALLEN IN LAW IN T HE MAKING (PAGE 246) ANALYSES THE CONCEPT OF PER INCURIAM AS UNDER: INCURIA MEANS LITERALLY CARELESSNESS WHICH APPA RENTLY IS CONSIDERED LESS UNCOMPLIMENTARY THAN IGNORANTIA; BUT IN PRACTI CE PER INCURIAM APPEARS TO MEAN PER IGNORANTIAM. IT WOULD ALMOST SE EM THAT IGNORANTIA JURIS NEMINEM EXCUSAT-EXCEPT A COURT OF LAW IGNORA NCE OF WHAT? THE EXAMPLE GIVEN IN THE ACTUAL RULES IN YOUNGS CASE [ YOUNG VS. BRISTOL AEROPLANE CO. LTD. (194) K.B. AT 729 (C.A.)] IS IGN ORANCE OF A STATUTE OR OF A RULE HAVING STATUTORY EFFECT [SUCH AS A RUL E OF THE SUPREME COURT [LANCASTER MOTOR CO. LTD. VS. BREMITH LTD. (1941) 1 KB 675)] WHICH WOULD HAVE AFFECTED THE DECISION IF THE COURT HAD B EEN AWARE OF IT. ONE OF THE EXCEPTIONS TO THE PRINCIPLE OF STARE DEC ISIS IS WHERE THE COURT GIVES A DECISION PER INCURIAM BECAUSE THE PROVISION S OF A STATUTE OR THE AUTHORITY OF A CASE HAVE NOT BEEN BROUGHT TO THEIR ATTENTION [LORD GODDARD CJ IN MOORE VS. HEWITT (1947 (2) AIL.ER 2 70]. THE CONCEPT GETS ATTRACTED EITHER WHEN AN IMPORTANT PROVISION O F LAW ELUDED THE ATTENTION OF THE COURT OR WHERE THE COURT WAS ALLUS IVE TO SUCH ITA NOS.5112 & 5113/DEL./2014 15 PROVISIONS WHILE RENDERING THE DECISION. INSTANCES OF PER INCURIAM MAY ALSO ARISE WHERE THE DECISION IS RENDERED IGNORING A BINDING PRECEDENT. SINCE WE FIND THAT SECTION 194A (3)(3)(IB) OF THE A CT HAS NOT BEEN BROUGHT TO THE NOTICE OF THE BENCH WHILE PASSING ORDER IN K ASHIPUR URBAN COOPERATIVE BANK LTD. (SUPRA) CANNOT BE CALLED A GO OD LAW AND IT WAS A PER INCURIAM ORDER AND SO CANNOT BE CALLED A VALID PREC EDENT TO BIND US. 9.2 LIKEWISE THE LD.AR HEAVILY RELIED ON THE CBDT CIRCULAR (SUPRA) TO BOLSTER HIS CASE WHICH CANNOT BE COUNTENANCED B ECAUSE IT IS A TRITE LAW THAT CBDT CIRCULAR CANNOT OVER-RIDE THE PRESCRIPTIO N OF STATUTE PASSED BY THE PARLIAMENT. AND THERE IS NO QUARREL THAT ASSES SEE IS A CO-OPERATIVE SOCIETY ENGAGED IN BANKING BUSINESS AND THE EXEMPTI ON FOR DEDUCTING TAX AT SOURCE FOR PAYMENT OF INTEREST IS ONLY UP TO RS. 10 000/-. SO THE ASSESSEE HAD TO DEDUCT TDS FOR PAYMENT OF INTEREST ABOVE 10 000/-. IN THE SAID SCENARIO THE LD CIT(A) HAS RIGHTLY CONFIRMED THE O RDER OF THE ITO (TDS) AND WE DO NOT FIND ANY INFIRMITY IN THE SAID ORDER . THEREFORE WE CONFIRM THE ORDER OF THE LD. CIT (A). 10. IN THE RESULT THE ASSESSEES APPEALS ARE DISMI SSED FOR BOTH THE YEARS. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 DAY OF JULY 2015. SD/- SD/- (R.S. SYAL) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 31 DAY OF JULY 2015 TS ITA NOS.5112 & 5113/DEL./2014 16 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVI NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.