MADURAI DISTT. CENTRAL COOPERATIVE BANK LTD. vs THE THIRD INCOME-TAX OFFICER, MADURAI

The Supreme Court held that under Article 246(1) of the Constitution, Parliament has the exclusive power to impose taxes, including additional surcharges under the Finance Act, 1963. The Court clarified that the appellant, a Cooperative Society, is not liable to pay income tax on its banking income as per Section 81(i)(a) of the Income Tax Act, 1961, but the imposition of an additional surcharge on residual income is valid. The appeal was dismissed as the grievance regarding the tax exceeding taxable income does not invalidate the provisions of the Finance Act.