Canara Bank, Shimla V. ITO (TDS), Shimla

ITA 1389/CHANDI/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7986 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-08-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 08-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order; TDS
• Section: 133A; 194A

Judgement Text

, ,A, IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER, AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1389/CHD/2018 / ASSESSMENT YEAR: 2011-12 CANARA BANK MAIN BRANCH, 20, MIDDLE BAZAR, SHIMLA INCOME TAX OFFICER (TDS), SHIMLA ./PAN NO : PTLC10840E /APPELLANT /RESPONDENT /ASSESSEE BY : NONE ! / REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL.CIT ' #$ /DATE OF HEARING : 05.08.2021 %&'($ /DATE OF PRONOUNCEMENT : 27.08.2021 (HEARING THROUGH WEBEX) /ORDER PERANNAPURNA GUPTA, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APP EALS), SHIMLA[IN SHORT REFERRED TO AS CIT(A)]DATED 24-08 -2018 U/S 250(6) OF THE INCOME TAX ACT,196 (HEREINAFTER REFERRED TO AS ACT). 2. NONE CAME PRESENT ON BEHALF OF THE ASSESSEE. ON THE EARLIER TWO OCCASIONS ALSO, I.E. 24 TH MARCH, 2021 AND 25 TH MAY, 2021, NONE ITA NO. 1389/CHD/2018 CANARA BANK MAIN BRANCH V.ITO (TDS)SHIMLA 2 APPEARED ON BEHALF OF THE ASSESSEE SEEKING ADJOURNM ENTS ON THE GROUND OF INABILITY TO ATTEND THE PROCEEDINGS ON AC COUNT OF COVID REGULATION AND LOCKDOWN. NO APPLICATION SEEKING ADJ OURNMENT WAS ALSO FILED BEFORE US DURING THE COURSE OF HEARING T ODAY, THE APPEAL WAS THEREFORE PROCEEDED TO BE HEARD WITH EX PARTE. 3. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BE LOW AND FIND THAT THIS APPEAL HAS COME UP BEFORE US IN THE SECON D ROUND. IT SO TRANSPIRES THAT THE ASSESSEE, A PUBLIC SECTOR BANK , WAS SUBJECT TO SURVEY ACTION U/S 133A OF THE ACT TO VERIFY THE COM PLIANCE OF TDS PROVISIONS. DURING THE SURVEY PROCEEDINGS, COMPLETE BOOKS OF ACCOUNTS, BILLS, VOUCHERS ETC. WERE NOT READILY AVA ILABLE AND THEREFORE SUMMONS U/S 133(1) OF THE ACT WERE ISSUED . DURING POST SURVEY PROCEEDINGS, THE AO NOTICED THAT THE TDS ON INTEREST PAYMENT MADE ON FDRS/KDRS WAS NOT BEING DEDUCTED Q UARTERLY AS AND WHEN THE LIABILITY FOR THE INTEREST WAS BEING P ROVIDED FOR IN THE BOOKS, AS PER THE PROVISIONS OF SECTION 194A OF THE ACT. FURTHER THE AO NOTICED DEFICIENCIES IN FORM OF 15G/15H FINDING THEM EITHER NOT BEING FILED IN SOME CASES OR BEING DEFICIENT .A FTER CONFRONTING THE SAME TO THE ASSESSEE, HE HELD THE ASSESSEE TO B E IN DEFAULT AND ACCORDINGLY RAISED DEMAND FOR THE SHORT DEDUCTION A ND INTEREST THEREON ON THE AFORESTATED TWO ISSUES IN HIS ORDER PASSED U/S 201(1)/201(1A) OF THE ACT. THE ASSESSEE WENT IN APP EAL TO THE LD. ITA NO. 1389/CHD/2018 CANARA BANK MAIN BRANCH V.ITO (TDS)SHIMLA 3 CIT(A) WHO UPHELD THE ORDER OF THE AO AND THE MATTE R THEREAFTER TRAVELLED TO THE ITAT WHERE THE ASSESSEE RAISED A DDITIONAL GROUNDS. THE ITAT FINDING THE SAID GROUNDS TO BE LE GAL IN NATURE ADMITTED THE SAME AND THEREAFTER RESTORED THEM TO T HE LD. CIT(A) FOR ADJUDICATION. BEFORE THE LD. CIT(A),THE ASSESSE E DID NOT PRESS THE ADDITIONAL GROUND. THE LD. CIT(A) THEREFORE AFT ER DISMISSING THE ADDITIONAL GROUND WENT ON TO REITERATE THE ORDE R PASSED BY THE LD. CIT(A) IN THE FIRST ROUND ON THE REMAINING GROU NDS RAISED. 4. AGGRIEVED BY THE SAME, THE ASSESSEE HAS NOW COME UP IN APPEAL BEFORE US. THE EFFECTIVE GROUNDS OF APPEAL AS PER THE REVISED GROUNDS FILED ARE AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HAS ERRED IN LAW AND FACTS OF THE CASE WHILE NOT ALLOWING THE EXCESS TDS DEPOSITED FOR THE QUARTER ENDING 31 ST MARCH 2014, WHICH WAS CONSIDERED TO BE SHORT DEDUCTED DURING THE PREVIOUS THREE QUARTERS. 2. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HAS ERRED IN LAW AND FACTS OF THE CASE WHILE REJECTING IMPLEMENTATION OF CIRCULAR NO. 03/2010 DATED 03.02.2010. 3. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HAS ERRED IN LAW AND FACTS OF THE CASE WHILE NOT CONSIDERING INTEREST PAID TO REGISTRAR OF HIGH COURT AND OTHER LEGAL AUTHORITIES (SUCH AS JUDGES OF COURTS, SESSION COURTS AND HIGH COURTS) TAKING THE PLEA THAT A CIRCULAR NO. 8 OF 2011 DATED 14.10.2011 WAS ISSUED TO DEAL WITH SUCH CASES, WHEREAS THE CIRCULAR WAS QUASHED BY DELHI HIGH COURT LATER ON. ITA NO. 1389/CHD/2018 CANARA BANK MAIN BRANCH V.ITO (TDS)SHIMLA 4 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING OF APPEAL OR BEFORE THE APPEAL IS BEING HEARD. 5. GROUND NO. 1 & 2 RELATE TO THE DEMAND RAISED AND THE CONSEQUENT CHARGE OF INTEREST THEREON ,ON ACCOUNT O F SHORT DEDUCTION OF TAX /DEFAULT IN TAX DEDUCTION ON INTEREST PAID O N FDRS/KDRS. THE LD.CIT(A) HAS ADJUDICATED THE ISSUE AT PARA 5.2 .5 OF HIS ORDER AS UNDER: 5.2.5 NOW THE ISSUE IS WHETHER THE APPELLANT IS CR EDITING THE INTEREST TO THE ACCOUNTS OF THE DEPOSITORS QUAR TERLY, MONTHLY, AT PERIODIC INTERVALS ORAL THE END OF THE FINANCIAL YEAR. IN CASE, NO INTEREST ACCRUES TO THE DEPOSITOR AND T HE INTEREST PROVISION IS ONLY AN ACCOUNTING ENTRY FOR CBS. THE SAME MAY BE COVERED BY CIRCULAR 3/2010 REPRODUCED SUPRA. THE A. O. HOWEVER IN THIS CASE HAS CLEARLY BROUGHT ON RECORD THAT AS PER THE FILINGS OF THE APPELLANT HIMSELF, THE INTEREST IS CREDITED TO THE SPECIFIC ACCOUNTS OF THE DEPOSITORS. DURING THE COURSE OF HE ARING, THE APPELLANT WAS ALSO ASKED TO FURNISH COPY OF FDRS AC COUNTS TO SHOW AND ESTABLISH THAT NO INTEREST IS ACCRUED AND CREDITED TO THE SPECIFIC ACCOUNTS DURING THE YEAR. THE APPELLAN T FAILED TO FURNISH THE SAME DURING THE COURSE OF APPEAL PROCEE DINGS. FURTHERMORE, AS BROUGHT OUT BY THE A.O. THE APPELLA NT WAS DEDUCTING AND DEPOSITING TDS ON QUARTERLY BASIS ON THESE FDRS/KDRS TILL 2011-12. CONSIDERING THESE FACTS, TH E APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THAT IT IS COVERED B Y CIRCULAR 3/2010. BY NOT DEDUCTING T.D.S. AT THE TIME OF MAKI NG A PROVISION, THE APPELLANT HAS VIOLATED THE EXPLANATI ON TO SECTION 194A OF THE INCOME TAX ACT. I THEREFORE, HO LD THAT THE ORDER PASSED BY THE ASSESSING OFFICER TREATING THE APPELLANT AS AN ASSESSEE IN DEFAULT, U/S.201 R.W.S. 194A OF THE INCOME TAX ACT IS CORRECT AND DESERVES TO BE SUSTAINED. THE OR DER IS THEREFORE, CONFIRMED. HOWEVER, THE ASSESSING OFFICE R IS REQUIRED TO GIVE CREDIT FOR TDS DEDUCTED AT THE YEAR END AFT ER VERIFICATION OF ACCOUNTS. IN THIS CASE, IT IS SEEN THAT THE A.O. HAS ALREADY PASSED THE RECTIFICATION ORDER DATED 12.01.07 WHERE IN THE DEMAND ON ACCOUNT OF SHORT DEDUCTION HAS BEEN REDUC ED BY RS. 13,82,568/- BY GIVING CREDIT FOR TDS DEDUCTED AT TH E YEAR END. THE BALANCE SHORT DEDUCTION AND INTEREST COMPUTED A T RS. 14,46.381/- IN THE AFOREMENTIONED RECTIFICATION ORD ER IS ACCORDINGLY UPHELD. ITA NO. 1389/CHD/2018 CANARA BANK MAIN BRANCH V.ITO (TDS)SHIMLA 5 6. WE HAVE GONE THROUGH THE SAME AND DO NOT FIND AN Y INFIRMITY. AS REGARDS ASSESSEE PLEA OF ALLOWING SET OFF OF EXC ESS TAX DEDUCTED WE IN SUBSEQUENT QUARTERS , WE FIND THAT THE SAME HAS ALREADY BEEN CONSIDERED AND ALLOWED BY THE CIT(A). AFTER CONFIRM ING THE ORDER OF THE AO THAT TDS ON INTEREST PAID ON FDRS AND T DRS WAS REQUIRED TO BE DEDUCTED QUARTERLY AS OPPOSED TO YEA RLY DEDUCTION BY THE ASSESSEE, HE WENT ON TO HOLD THAT THE AO SHOULD GIVE CREDIT OF TAX DEDUCTED AT THE YEAR END AND FURTHER NOTED THAT A RECTIFICATION ORDER DATED 12.01.07 TO THIS EFFECT REDUCING THE D EMAND ON ACCOUNT OF SHORT DEDUCTION OF TDS BY RS.13,82,568/- HAS ALR EADY BEEN PASSED BY THE AO. WE FAIL TO UNDERSTAND THE GRIEVAN CE NOW REMAINING TO BE ADDRESSED ON THIS ACCOUNT. GROUND O F APPEAL NO.1 IS THEREFORE DISMISSED. 7. AS FOR THE GRIEVANCE RAISED IN GROUND NO.2 OF NO T IMPLEMENTING CIRCULAR NO.03/2010 OF THE CBDT ,WE FI ND THAT THE LD.CIT(A) HAS GIVEN A CLEAR FINDING THAT THE ASSESS EE WAS UNABLE TO ESTABLISH HOW IT WAS COVERED UNDER THE SAID CIRCULA R. THE IMPORT OF THE SAID CIRCULAR, WE FIND IS THAT THE CBDT HAD CLA RIFIED THAT ON ACCOUNT OF THE CORE BRANCH BANKING SOLUTION (CBS) S OFTWARE WHEREIN FOR MONITORING PURPOSES ALONE INTEREST IS C ALCULATED ON DAILY OR MONTHLY BASIS AND IS SWEPT AND KEPT IN PRO VISIONING ACCOUNT, TDS IS NOT TO BE DEDUCTED AT THIS POINT B UT AT THE TIME OF ITA NO. 1389/CHD/2018 CANARA BANK MAIN BRANCH V.ITO (TDS)SHIMLA 6 GIVING ACTUAL CREDIT TO THE DEPOSITORS. TAKING NOT E OF THE SAME, THE LD.CIT(A) FOUND THAT THE ASSESSEE WAS UNABLE TO EST ABLISH THAT IT WAS COVERED BY THE SAID CIRCULAR. ON ACCOUNT OF THE AFORESAID FACTUAL FINDING OF THE LD.CIT(A) AND NO MATERIAL BE FORE US CONTRADICTING THE SAME, WE FIND NO REASON TO INTERF ERE WITH THE ORDER OF THE LD.CIT(A). GROUND OF APPEAL NO.2 RAISED BY T HE ASSESSEE IS THEREFORE DISMISSED. 8. GROUND OF APPEAL NO.3, RELATES TO ASSESSEE BEIN G HELD TO BE IN DEFAULT FOR NOT DEDUCTING TAX ON INTEREST PAYMENTS WHERE FORM NO.15G/15H HAD NOT BEEN OBTAINED. THE PLEA OF THE A SSESSEE BEING THAT THE INTEREST PAYMENT RELATED TO PERSONS WHO WE RE LITIGANTS ON WHOSE BEHALF VARIOUS COURTS/JUDGES/REGISTRAR OF HIG H COURT HAD MADE DEPOSITS WITH THE BANK. THE LD.CIT(A) HAD DEAL T WITH THIS ISSUE AT PARA 5.2.7 TO 5.2.10 OF THE ORDER AND DEN IED RELIEF HOLDING THAT THE ASSESSEE FAILED TO COMPLY WITH CIRCULAR N O.8 OF 2011 DATED 14.10.11, WHICH DEALT WITH THIS ISSUE. 9. BEFORE US THE PLEA OF THE ASSESSEE IS THAT THE S AID CIRCULAR HAS BEEN QUASHED BY HONBLE DELHI HIGH COURT. BUT NO SU CH DECISION HAS BEEN BROUGHT TO OUR NOTICE. IN VIEW OF THE SAME , WE CANNOT BUT UPHOLD THE FINDINGS OF THE LD.CIT(A). GROUND OF APPEAL NO.3 IS ACCORDINGLY DISMISSED. ITA NO. 1389/CHD/2018 CANARA BANK MAIN BRANCH V.ITO (TDS)SHIMLA 7 10. IN EFFECT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.2021. SD/- SD/- (SATBEER SINGH GODARA) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 .08.2021 GP/SR.PS &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR 1. DRAFT DICTATED 03.08.2021 SR.PS 2. DRAFT FIRST PLACED BEFORE AUTHOR 06.08.2021 3. APPROVED DRAFT COMES TO SR.PS/PS 4 FINAL DRAFT PLACED BEFORE AUTHOR 5. ORDER SIGNED AND PRONOUNCED ON 6 FILE SENT TO THE BENCH CLERK SR.PS 7. DATE ON WHICH FILE GOES TO THE AR 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER