By TIOL News Service

BANGALORE, SEPT 22, 2018: THE ISSUE IS - Whether section 194A(3)(v), is applicable to the cooperative society and it is not liable to deduct tax at source on interest paid to its members. YES IS THE VERDICT.

Facts of the case

Tribunal held that,

++ from the language used in the section 194A(3)(v), of Act, it is clear that the case of assessee shall squarely fall within this provision, being specific provision, irrespective whether Rs.10,000/- or more is paid by the assessee to its member or not and therefore in the considered opinion of the bench the other provision relied upon by the DR sec 194A(3)(i)(b) shall not be applicable being general in nature. It is settled proposition of law that the specific provision {194A(3)(v)}, shall override the general provision, {194A(3)(i) (b)}, in case of over lapping or conflict, hence the section 194A(3)(v)} is applicable to the facts of the present case. Therefore the contention of DR is not correct. Further the case is also covered in favour of assessee by the decision of the coordinate bench in the matter of Vasavamba Cooperative Bank Ltd. Thus there was no reason for bench to take a contrary view. In the result, appeal of the assessee is allowed.

(See 2018-TIOL-1615-ITAT-BANG)