Mandheshwari Urban Development Co-op. Bank Ltd. Vs ACIT (ITAT Pune)
issue in the present appeal relates to whether a nominal member, who is not a registered member of the society, can be treated as a member of the cooperative society whether the exemption is available under clause (v) of sub-section (3) of section 194A of the Act. There is no dispute as to the fact that the above categories of persons mentioned above are nominal members of the societies as per bye-laws of the appellant society. The provisions of Maharashtra Cooperative Societies Act also permit admission of such nominal members. The term “member” has been defined by the Maharashtra Cooperative Societies Act to include a nominal members.
ITAT held that we do not see any reason as to why the exemption under clause (v) of sub-section (3) of section 194A of the Act cannot be given in the case of members referred to above. Therefore, the reasoning of the lower authorities cannot be appreciated in the eyes of law. Accordingly, the orders of the lower authorities are hereby reversed and direct the Assessing Officer to delete the addition made u/s 40(a)(ia) of the Act for non-deduction of TDS on interest paid on deposit received from the nominal members of the society.
ITAT followed Supreme Court Judgment in the case of Mavilayi Service Co-operative Bank Ltd. vs. CIT, 431 ITR 1 (SC).
FULL TEXT OF THE ORDER OF ITAT PUNE
These are the appeals filed by the different assessees against the different orders of ld. Commissioner of Income Tax (Appeals), Pune for the respective assessment years.
2. Since the identical facts and issues are involved in all the above captioned ten appeals, we proceed to dispose of the same by this common order.
3. For the sake of convenience and clarity, the facts relevant to the appeal in ITA No.1770/PUN/2018 for the assessment year 2010-11 are stated herein.
4. Briefly, the facts of the case are that the appellant is a cooperative-bank registered under the provisions of the Maharashtra Cooperative Act. It is engaged in the business of banking. The return of income for the assessment year 2010-11 was filed on 14.10.2010 declaring total income of Rs.9,46,40,949/-. Against the said return of income, the assessment was completed vide order dated 31.12.2012 at total income of Rs.11,01,49,880/-. Subsequently, a notice u/s 148 of the Income Tax Act, 1961 („the Act‟) was issued on 20.03.2017 served upon the appellant on 23.03.2017, as the Assessing Officer formed an opinion that the income had escaped assessment to tax, as the assessee had failed to deduct TDS on the interest paid on deposits received from the following categories, who are not members of appellant society:
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