Section 115BAD

Section 115BAD — the law in short

What the courts have decided on section 115BAD, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Citizen Credit Co-operative Bank Ltd v ITO (TDS Ward), Mumbai High CourtHelps taxpayerValidity unconfirmed
  We are a co-operative bank. The TDS officer says we should have deducted tax under s.194A on fixed deposit interest paid to co-operative housing societies that are not our members, and has treated us as an assessee in default. Is he right?
  No, on the Bombay High Court's reading. Clause (v) of s.194A(3) has two limbs, and the words 'other than a co-operative bank' appear only in the first limb, which deals with interest paid by a society to its members; the second limb — interest 'credited or paid by a co-operative society to any other co-operative society' — carries no such exclusion, so a co-operative bank, which remains a co-operative society, is not obliged to deduct tax on interest paid to non-member co-operative societies. Paragraph 42.7 of CBDT Circular No. 19 of 2015 says the same thing in terms.
• Bicholim Electricity Employees Cooperative Credit Society Ltd v ITO ITATHelps taxpayerValidity unconfirmed
  My co-operative credit society filed Form 10-IF opting into s.115BAD and then claimed deduction under s.80P in the same return. CPC has disallowed the whole s.80P deduction under s.143(1). Is there anything to be said?
  There is an argument, and the Tribunal let it be run — but it did not decide it. On these facts the Tribunal restored the matter for fresh adjudication on the merits, recording the case that the society did not satisfy the conditions in s.115BAD(2) and had filed Form 10-IF erroneously, and that the adjustment made under s.143(1) was not within the permissible adjustments. The underlying rule is unforgiving and should be understood before any co-operative society files Form 10-IF: s.115BAD(2)(i) requires total income to be computed 'without any deduction ... under any of the provisions of Chapter VI-A other than the provisions of section 80JJAA', and s.80P is in Chapter VI-A.
• Statutory position — s.115BAE: the 15 per cent regime for new manufacturing co-operative societies, and the absence of case law CBDT Circulars & InstructionsCuts both waysValidity unconfirmed
  A new manufacturing co-operative society wants the 15 per cent rate. What does s.115BAE require, and is there any decided case on it?
  Section 115BAE, inserted by the Finance Act 2023 with effect from 1 April 2024, taxes a resident co-operative society at 15 per cent from AY 2024-25 if it was set up and registered on or after 1 April 2023 and commenced manufacturing or production of an article or thing on or before 31 March 2024, and if the other conditions in sub-section (2) are met. I located no judicial decision on the section — no High Court, Tribunal or Supreme Court authority on s.115BAE was found, and this entry states the statute, not case law.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.