Allahabad Bank, Ghaziabad V. ITO (TDS), Ghaziabad

ITA 1381/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9014 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 27-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax; TDS
• Section: 201(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: A NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER [THROUGH VIDEO CONFERENCING] ITA NOS.1381 & 1382/DEL/2018 ASSESSMENT YEARS: 2014-15 & 2015-16 ALLAHABAD BANK, WRIGHT GANJ, GHANTA GHAR, CLOCK TOWER, GHAZIABAD VS. ITO (TDS), GHAZIABAD PAN :AACCA8464F (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THESE TWO APPEALS BY THE ASSESSEE, I.E., THE ALLAH ABAD BANK, GHAZIABAD, HAVE BEEN PREFERRED AGAINST TWO SEPARATE ORDERS, BOTH DATED 30/11/2017 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-GHAZIABAD [IN SHORT THE LD. C IT(A)] FOR ASSESSMENT YEARS 2014-15 AND 2015-16 RESPECTIVELY. IN BOTH THESE APPEALS, COMMON ISSUE-IN-DISPUTE HAS BEEN CHA LLENGED, APPELLANT BY SH. M.P. RASTOGI, ADV & SH. RAJEEV KUMAR, CA RESPONDENT BY SH. BHOPAL SINGH, SR.DR DATE OF HEARING 04.08.2021 DATE OF PRONOUNCEMENT 10.08.2021 2 ITA NO.1381/DEL/2018 THEREFORE, SAME WERE HEARD TOGETHER AND DISPOSE OFF BY WAY OF THIS CONSOLIDATED ORDER FOR CONVENIENCE. 2. IN BOTH THESE APPEALS IDENTICAL GROUNDS HAVE BEEN RAISED. FOR THE SAKE OF BREVITY, THE GROUNDS RAISED IN ITA NO. 1381/DEL/2018 FOR ASSESSMENT YEAR 2014-15 ARE REPRO DUCED AS UNDER: 1. THAT THE PENALTY AS LEVIED BY AO AND SUSTAINED B Y THE CIT(APPEALS) U/S 271C OF THE IT ACT IS ARBITRARY, U NJUST AND ILLEGAL ON VARIOUS FACTUAL AND LEGAL GROUNDS. 2. THAT IN THE ABSENCE OF ANY DEMAND OUTSTANDING AG AINST THE PAYEE, THE ASSUMPTION OF JURISDICTION BY AO U/S 20 1 AND 201(1A) OF THE IT ACT IS ARBITRARY, UNJUST AND ILLEGAL AND CONSEQUENTLY THE PENALTY AS LEVIED BY THE AO U/S 271C OF THE IT ACT AND SUSTAINED BY THE CIT(APPEALS) IN FURTHERANCE OF SUCH INVALID JURISDICTION IS ALSO INVALID. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE IS ENGAGED IN BANKING ACTIVITY AND DURING THE YEAR UND ER CONSIDERATION, NO TAX WAS DEDUCTED AT SOURCE ON INT EREST IN BANK DEPOSITS IN RESPECT OF THE CUSTOMERS WHO PROVIDED F ORM NO. 15G AND 15H, I.E., THE FORM PRESCRIBED BY THE CENTRAL B OARD OF DIRECT TAXES (CBDT) TO BE FILED BY THE CUSTOMERS WHOSE TOT AL INCOME WAS BELOW TAXABLE LIMIT. THE ASSESSING OFFICER ON AN EX AMINATION OF THE COMPLETE DETAILS OF THE PERSONS (CUSTOMERS) FOU ND THAT THEY WERE HAVING INCOME MORE THAN TAXABLE LIMIT. THE ASS ESSING OFFICER FURTHER OBSERVED THAT IN THE TAX DEDUCTED A T SOURCE (TDS) RETURN ALSO, THE ASSESSEE DID NOT FILE COMPLETE DET AIL IN RESPECT OF THE DEDUCTEES. ACCORDING TO THE ASSESSING OFFICER, THE FORM NO. 15G AND 15H HAD BEEN ACCEPTED FROM THE PERSONS HAVI NG INCOME MORE THAN THE EXEMPTION LIMIT PRESCRIBED UNDER THE ACT, WHICH WAS IN COMPLETE VIOLATION OF PROCEDURE PRESCRIBED. THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE ALLAHABAD HIG H COURT IN THE 3 ITA NO.1381/DEL/2018 CASE OF JAGRAN PRAKASHAN LTD. VS. DCIT, 345 ITR 288 AND SUBMITTED THAT THE CUSTOMERS HAVE ALREADY PAID THE TAX LIABILITY DIRECTLY. THE ASSESSING OFFICER, HOWEVER, HELD THAT BANK WAS LIABLE FOR DEDUCTION OF THE TAX AT SOURCE UNDER SECTION 19 4A OF THE ACT ON INTEREST PAYMENTS AND FAILED TO SUBSTANTIATE BEF ORE THE ASSESSING OFFICER THAT DEDUCTEE DIRECTLY MADE THE P AYMENT OF THE TAXES AND, THEREFORE, HE RAISED LIABILITY U/S 201(1 ) AND 201(1A) OF THE ACT ON THE ASSESSEE. IN VIEW OF THE DEFAULT OF NON-DEDUCTION OF TAX AT SOURCE ON INTEREST PAYMENT, THE ASSESSING OF FICER INITIATED PENALTY UNDER SECTION 271C OF THE ACT AND AFTER CON SIDERING SUBMISSION OF THE ASSESSEE, HE LEVIED PENALTY OF 10,20,386/- FOR ASSESSMENT YEAR 2014-15 AND RS.12,21,894/- FOR ASSE SSMENT YEAR 2015-16. ON FURTHER APPEAL, THE LD. CIT(A) UPH ELD THE PENALTY IN VIEW OF LIABILITY RAISED BY THE ASSESSIN G OFFICER UNDER SECTION 201(1) AND 201(1A) OF THE ACT. 4. BEFORE US, THE PARTIES APPEARED THROUGH VIDEO CONF ERENCING FACILITY. THE LEARNED COUNSEL OF THE ASSESSEE FILED THROUGH EMAIL A COPY OF THE ORDER OF TRIBUNAL RELIED UPON. 5. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE TRIBUNAL IN ITA NO. 6095/DEL/2016 AND 6096/DEL/2016 FOR ASSESSMENT YEAR 2014-15 AND 2016-17 RESPECTIVELY HA S DELETED THE LIABILITY RAISED UNDER SECTION 201(1) AND 201(1 A) OF THE ACT AND, THEREFORE, THE VERY BASIS OF LEVYING PENALTY U NDER SECTION 271C HAS BEEN DELETED, THE SAID PENALTY LEVIED CANN OT BE SUSTAINED. 6. THE LEARNED DR, ON THE OTHER HAND, RELIED ON THE O RDER OF THE LOWER AUTHORITIES. 4 ITA NO.1381/DEL/2018 7. WE HAVE HEARD RIVAL SUBMISSION OF THE PARTIES ON T HE ISSUE IN DISPUTE. IN THE INSTANT APPEALS, PENALTY UNDER S ECTION 271C OF THE ACT HAS BEEN LEVIED BY THE JOINT/ADDITIONAL COM MISSIONER OF INCOME-TAX HAVING ADMINISTRATIVE CONTROL OVER THE A SSESSING OFFICER, IN VIEW OF NON-DEDUCTION OF TAX AT SOURCE ON THE INTEREST ACCRUED ON BANK DEPOSITS OF THE CUSTOMERS. THIS PEN ALTY HAS BEEN LEVIED IN VIEW OF LIABILITY RAISED UNDER SECTI ON 201(1) AND 201(1A) OF THE ACT BY THE ASSESSING OFFICER FOR HOL DING ASSESSEE IN DEFAULT FOR NON-DEDUCTION OF TAX AT SOURCE ON INTER EST PAID/ACCRUED ON BANK DEPOSITS OF CUSTOMERS. THIS LI ABILITY RAISED BY THE ASSESSING OFFICER HAS BEEN DELETED BY THE TR IBUNAL(SUPRA) OBSERVING AS UNDER: 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE BANK HAS NOT DEDU CTED TDS IN RESPECT OF CUSTOMERS WHO HAVE PROVIDED FORM NO. 15G AND 15H OF THE ACT UNDER THE STATUTE AS PROVIDED BY THE INCOME TAX ACT. THE CUSTOMERS WHO HAVE PROVIDED FORM NO. 15G/15H HAS SP ECIFICALLY REQUESTS THROUGH THESE FORMS THAT TDS SHOULD NOT BE DEDUCTED ON THEIR FDS/RESPECTIVE WITHDRAWALS. THE PRIME RESPONS IBILITY RELATING TO TDS DEDUCTION U/S 201 IS OF THE RECIPIENT ASSESS EE TO PAY THE TAX DIRECTLY ONCE THEY FILED FROM NO. 15G/15H AND ANY T AX LIABILITY WILL BE HELD AS PENDING IN RECIPIENT ASSESSEES CASES AN D HENCE SECTION 201 OF THE ACT CANNOT BE INVOKED AS IT IS A RECOVER Y PROVISION AS SUBMITTED BY THE LD. AR. THE DECISIONS GIVEN BY THE LD. AR ALSO REITERATES SIMILAR FACTS. BESIDES THIS, IN ASSESSME NT YEARS 2002-03 TO 2004-05, IN THE CASE OF THE ASSESSEE ITSELF IN T HE SAME BRANCH, THE DELHI ITAT IN ITA NOS. 5992 TO 5994/DEL/2012 DATED 4TH MARCH 2016, AFTER FOLLOWING THE JUDGMENT OF THE JURISDICT IONAL ALLAHABAD HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF, HAS QUASHED THE PROCEEDINGS U/S 201 OF THE ACT ON THE SIMILAR LINES . FURTHER, FOR ASSESSMENT YEAR 2014-15 AND 2015-16 ALSO THE ISSUE IS IDENTICAL AND NO DISTINGUISHING FEATURE WAS POINTED OUT BY LD . DR AT THE TIME OF HEARING. SINCE, BOTH THE ASSESSMENT YEARS I.E. A .Y. 2014-15 AND 2015-16 ARE IDENTICAL, THEREFORE, WE ARE ALLOWING B OTH THE APPEALS. 7.1 IN VIEW OF THE FINDING OF THE TRIBUNAL (SUPRA), WE ARE OF THE OPINION THAT WHEN THE FOUNDATION OF LEVY OF PENALTY UNDER SECTION 5 ITA NO.1381/DEL/2018 271C HAS BEEN DEMOLISHED, THE PENALTY LEVIED UNDER SECTION 271C CANNOT SURVIVE. ACCORDINGLY, WE CANCEL THE PENALTY LEVIED BY JOINT/ADDITIONAL COMMISSIONER OF INCOME-TAX, IN BOT H THE ASSESSMENT YEARS, I.E., AY 2014-15 AND 2015-16. THE GROUNDS OF THE APPEAL OF THE ASSESSEE RAISED IN BOTH APPEALS A RE ACCORDINGLY ALLOWED. 8. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST, 2021. SD/- SD/- (KULDIP SINGH) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10 TH AUGUST, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI