JUDGMENT :

The issue that arises for consideration in these writ petitions is the entitlement of the petitioners, who are Primary Agricultural Credit Societies registered under the provisions of the Kerala Co-operative Societies Act 1969, to the benefit of an exemption from the provisions of Section 194A of the Income Tax Act (‘the Act’ for short). The said provision mandates a deduction of tax at source, whenever any person, who is responsible for paying to a resident any income by way of interest other than income by way of interest on securities, effects payment thereof in cash or by issue of cheque or draft or by any other mode. The provisions of Section 194A do not apply in cases specified under Section 194A(3)(iii) of the Act. In these writ petitions, we are concerned with the exemptions provided under Sections 194A(3)(iii)(a) and 194A(3)(iii)(v) of the Act. The said provisions read as under;

194A. Interest other than “Interest on securities”

(1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of interest other than income [by way of interest on securities], shall, at the time of credit of such income