Case Law Details
Molasi Primary Agricultural Co-operative Credit Society Ltd Vs ITO (Madras High Court)
Madras High Court dismissed the writ petition challenging the circular issued by District Central Cooperative Banks as the circular merely sought to bring to the notice of the petitioner societies the statutory provisions in regard to the deduction of tax, enjoining that they adhere to and comply with the same.
Facts-
This writ petition is filed by Primary Agricultural Co-operative Credit Societies that functions for the purposes of advancing crop and fertilizer loans to agriculturalists and have accounts with respondent banks.
All the petitioner societies challenge the Circulars issued by the District Central Cooperative Banks, Salem, Kancheepuram, and Kumbakonam which refers to the statutory mandate of Section 194 N of the Income Tax Act, 1961. It provides for the deduction of tax on cash withdrawals. The provisions of Section 194 N coming under Chapter XVII dealing with ‘collection and recovery – deduction at source’ provides for deduction of an amount equal to 2% of any cash withdrawal made by persons from a banking company, a co-operative society engaged in carrying on the business of banking; or a post office.
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