Madras HC Upholds Section 194N, Dismisses Challenges to Circulars by Co-op Banks

AA.226, Modakurichi Primary Agricultural Cooperative Credit Society Vs DCIT (Madras High Court) Introduction: The Madras High Court adjudicated on a set of Writ Petitions filed by Primary Agricultural Cooperative Credit Societies, challenging Circulars issued by District Central Cooperative Banks. The core issue revolves around the interpretation of Section 194N of the Income Tax Act, 1961, which mandates a 2% deduction on cash withdrawals. The petitioner societies contend that such deductions should not apply to withdrawals facilitating loans to farmers and small traders. This article delves ...