IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 24TH SEPTEMBER 2009 / 2ND ASWINA 1931 ITA.No. 356 of 2009() --------------------- ITA.333/COCH/2001 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT ----------------------------- THE COMMISSIONER OF INCOME TAX,COCHIN. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- THE T.C.C. CO-OPERATIVE SOCIETY LTD UDYOGAMANDAL. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 24/09/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- I.T.A. No. 356 OF 2009 -------------------------------------------- Dated this the 24th day of September, 2009 JUDGMENT Ramachandran Nair, J. Respondent is a co-operative society formed by the employees of a State Government company. The employees welfare fund of the company had made deposits with the respondent in respect of which interest was paid to the employees welfare fund. However, interest was paid by the respondent without deduction of tax at source. Even though the recipient was registered under Section 12A, they settled liability under the Karvivad Sammadhan Scheme. Department raised interest demand under Section 201 of the IT Act on the belated payment of TDS. In appeal filed challenging the demand of interest, the Tribunal noticed that the omission is bona fide because the recipient was registered under Section 12A of the Act and hence cancelled the demand. It is against this order that. the Department has filed this appeal. We have heard standing counsel appearing for the appellant. Besides what is found by the Tribunal, we feel while settling the 2 liability of the recipient under Karvivad Sammadhan Scheme interest payable for non-payment of advance tax also would have been reckoned. Therefore no prejudice is caused to the department, when the recipient settled income tax liability in respect of entire interest income paid by the respondent. Consequently we find no merit in the appeal and the same is accordingly dismissed. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk 3