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2012 Supreme(Online)(KER) 39798
HIGH COURT OF KERALA
P.R.RAMACHANDRA MENON, J
MS AYALUR SERVICE CO-OPERATIVE BANK LTD – Appellant
Versus
THE COMMISSIONER OF INCOME TAX CIB – Respondent
WRIT PETITION (CIVIL) 14226/2012
Verification of status as Primary Agricultural Credit Societies is essential for claiming TDS exemptions under the Income Tax Act, according to the amended provisions of the Kerala Co-operative Societies Act.
Headnote:
Income Tax - Co-operative Societies - Income Tax Act - Sections 200(3), 194A(3)(viia)(a) - The court interpreted the provisions regarding TDS obligations and exemption criteria for Primary Agricultural Credit Societies, concluding that verification of status is necessary before enforcing compliance. The amendment to Section 2(oa) of the Kerala Co-operative Societies Act is pivotal in determining compliance requirements.
Fact of the Case:
Petitioners, Primary Co-operative Societies, contested notices issued by the Income Tax Officer seeking TDS compliance under Section 200(3) and general information requests, asserting these were unjust and stayed under prior Supreme Court orders.
Finding of the Court:
The court clarified that the notices were not under Section 133(6), but for compliance due to alleged TDS failures. It noted the petitioners' claims of exemption under Section 194A(3)(viia)(a) necessitated verification of their status as Primary Agricultural Credit Societies.
Issues: Whether the petitioners are required to comply with TDS provisions under the Income Tax Act considering their status as Primary Agricultural Credit Societies and the impact of amendments to the Kerala Co-operative Societies Act.
Ratio Decidendi: The petitioners must validate their classification as Primary Agricultural Credit Societies to assert exemption from TDS obligations; non-compliance could lead to enforcement of TDS requirements under Sections 194A and 200(3).
Final Decision: Writ petitions disposed with conditions for proof of status within three months.
J U D G M E N T
The petitioners are Primary Co-operative Societies/Primary Agricultural Credit Societies, who are aggrieved of the notices issued by the concerned Income Tax Officer (TDS) asking:
(1) to comply with the statutory requirements under Section 200(3) of the Income tax Act, submitting a statement in the Form
24Q/26Q/27Q as applicable;
(2) to furnish a list showing interest credited/accrued in excess of Rs.5000/- ( individuals and other than individuals) during the financial year 2010-11 and 01.04.2011 to
31.12.2011 for verification and (3) to furnish copies of the provisional receipts issued by the NSDL office regarding receipt of quarterly TDS statements for the last three Quarters of Financial year 2011-12 viz. 24Q, 26Q and 27Q and copies of Form No.16 and 16A issued by the Bank for the Financial Year 2010-11 and (4) to comply with such other requirements.
2. According to the petitioners such notices are part of a rowing enquiry and amounts to calling for general information under Section 133(6) of the Income Tax Act (hereinafter referred to as the Act); and that issuance of similar notices under Section 133(6) calling for such general information stands already stayed by the Supreme Court in SLP.3976 of 2010.
3. The respondents in W.P.(C) 14226 of 2012 has filed a detailed statement (which is sought to be adopted in other cases as well) wherein, it has been asserted that the scope of the notice issued has been wrongly understood by the petitioners. It has been asserted that the notice is not under Section 133(6) of the Income Tax Act, but for the purpose of assessment, since the petitioners have failed to file the necessary returns under the Act and have not effected any TDS as prescribed and that it is very much necessary for the purpose of verification and to be dealt with in tune with the relevant provisions of law. It is also pointed out that the relevant particulars have been called for as an initial step, before issuing summons under Section 131 of the Act. 4. To understand the factual position in the correct perspective, it is necessary to extract the contents of the specimen notice(Ext.P2) in W.P.(C) 14226 of 2012, which reads as follows:
“Sir, Sub: Deduction of tax at source and
As per Section 200(3) of the Income Tax Act, it is mandatory that any person deducting any sum as TDS should prepare and submit a statement in the form 24Q/26Q/27Q as applicable, by the Deductor. You are therefore required to comply with the provisions of ACT immediately, if not already done, in order to streamline taxpayers grievances and also reconcile the mismatch.
It is requested that, a list showing interest credited/accrued in excess of Rs.5,000/- (individuals and other than individuals) during the F.Y. 2010-11 and 1.4.2011 to 31/12/2011 may please be produced for verification.
Your are also requested to furnish copies of provisional receipt issued by the NSDL office regarding receipt of quarterly TDS statements for the last three Quarters of F.Y.2011-12 viz. 24Q,26Q and 27Q and copies of Form No.16 and 16A issued by the Bank for the Financial year 2010-2011. It is also requested that please produce copy of acknowledgement for Income Tax Return of the Bank filed and P & I Account and Balance sheet and annexures thereto for the F.Y. 2010-2011 relevant to the Assessment Year 2011-
2012.
You are requested to appear before me either in person or through an authorized representative with the details mentioned above in my office at Aayakar Bhavan, English Church Road, Palakkad on 22.02.2012 at 2.15 PM. Please ensure compliance.”
5. The learned Sr. Counsel Mr. T.M. Sreedharan appearing for the petitioners/Soceity in W.P.(C) 14226 and 15191 of 2012 submits that the petitioners in the said two cases do not have any objection at all with regard to the requirement in the 'first' and 'third' paragraphs of the notice; whereas the objection is only with respect to
