Law:

Section:

Section 194A of the Income-tax Act, 1961 - Deduction of tax at source - Interest other than interest on securities - Whether when respondent-cooperative society under sub-section (3) was taken out of purview of section 194A(1), it would not be liable to deduct income-tax out of interest paid by it on deposits exceeding prescribed limit - Held, yes FACTS The respondent-cooperative society received notice from the appellant-Income-tax Department to deduct the income-tax out of the interest paid by it on time deposits, in respect of every payment exceeding prescribed limit at relevant point of time. The respondent challenged the said notice in petition filed before the Single Judge. The Single Judge quashed the notice holding that going by the provisions contained in section 194A(3)(viia)( a), the respondent was not liable to deduct income-tax at source in respect of the interest so paid, as sub-section (3) exempts them from the coverage of sub-section (1) of section 194A. On appeal : HELD Sub-section (3) of section 194A makes it clear that 'the provisions of sub-section (1) shall not apply' in respect of several situations mentioned under that clause. Admittedly, sub-section (1) of section 194A casts liability on all those institutions other than individuals and HUF to deduct income-tax at source, when such institutions pay interest on deposits exceeding the prescribed limit. Interest paid on time deposits by a co-operative society, other than a co-operative society or bank referred to in sub-clause (a ) engaged in carrying on the business of banking will be covered by sub-section (1), and, therefore, it will be liable to deduct income-tax. [Para 3] The appellant did not have a case that the respondent did not come within any of the types of co-operative societies made mention of in sub-clause (a ) of clause (viia) of sub-section (3) of section 194A. Therefore, irrespective of whether it was a time deposit or any other type of deposit, the respondent would not be liable to deduct income-tax, as such society was under sub- section (3) taken out of the purview of section 194A(1). Therefore, the writ appeal failed and was to be dismissed. [Para 4] P.K. Ravindranatha…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492