ITO (TDS), Gurgaon V. The Gurgaon Co-op Bank Ltd., Gurgaon

ITA 1463/DEL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3120 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 18-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: PRASHANT SHARMA
• Section: 201(1)

Judgement Text

ITA NOS.: 1463/DEL/16 ASSESSMENT YEAR: 2012-13 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BENCH, NEW DELHI [CORAM: PRAMOD KUMAR AM AND SUDHANSHU SRIVASTAVA JM ] ITA NOS.: 1463/DEL/16 ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER TDS WARD, GURGAON ..APPELLANT VS GURGAON CENTRAL COOPERATIVE BANK LTD ...... ....RESPONDENT VILLAGE JHARSA, GURGAON [PAN: AAALT0271A] APPEARANCES BY RAVI KANT GUPTA FOR THE APPELLANT PRASHANT SHARMA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : MAY 28, 2018 DATE OF PRONOUNCEMENT : AUGUST 23, 2018 O R D E R PER PRAMOD KUMAR, AM: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED THE CORRECTNESS OF ORDER DATED 15 TH JANUARY 2016 PASSED BY THE CIT(A) IN THE MATTER OF TAX WITHHOLDING DEMAND UNDER SECTION 201 OF THE INCOME TAX ACT, 1961, FOR THE AS SESSMENT YEAR 2012-13. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOW S: 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS BY IGNORING THE FACT THAT THOUGH THE APPELLANT IS A COOPERATIVE SOCIETY BUT E NGAGED IN THE BUSINESS OF BANKING AND, THEREFORE, NOT EXEMPT UNDER SECTION 19 4(3)(V) AND THUS THE LEARNED CIT(A) HAS ERRED IN DELETING THE DEMAND RAISED ON A CCOUNT OF SHORT DEDUCTION OF TDS OF RS 24,24,480 AND INTEREST THEREON OF RS 7,39 ,466. 2. THE LEARNED CIT(A) HAS ERRED IN DELETING THE DEM AND RAISED ON ACCOUNT OF SHORT DEDUCTION OF TDS OF RS 3,35,388 AND INTERE ST THEREON OF RS 1,72,112 WITH RESPECT TO THE CASES WHERE FORM 15G/15H WERE NOT SU BMITTED TO THE CIT(TDS) ON ITA NOS.: 1463/DEL/16 ASSESSMENT YEAR: 2012-13 PAGE 2 OF 5 OR BEFORE 7 TH DAY OF THE WEEK, NEXT FOLLOWING THE MONTH IN WHICH DEDUCTION IS FURNISHED TO HIM. 3. WHEN THIS APPEAL WAS TAKEN UP FOR HEARING, IT WA S NOTICED THAT BOTH OF THESE ISSUES ARE NOW COVERED, IN FAVOUR OF THE ASSESSEE, BY A DECISI ON DATED 27 TH SEPTEMBER 2017 IN ASSESSEES OWN CASE WHEREIN THE COORDINATE BENCH HAS, INTER AL IA, OBSERVED AS FOLLOWS: 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE B ANK HAS FILED ITS TDS RETURNS UNDER TAN: RTKT01337A. THE TDS INSPECTION WAS CONDU CTED AT THE HEAD OFFICE OF THE GURGAON CENTRAL COOP. BANK, GURGAON O N 07.11.2013. DURING THE COURSE OF INSPECTION, IT WAS FOUND THAT VARIOUS BRA NCHES OF THIS BANK HAVE NOT DEDUCTED TDS U/S 194A ON THE AMOUNT OF INTEREST PAI D ON TERM DEPOSITS WHICH WAS REQUIRED TO BE MADE. DURING INSPECTION IT WAS A LSO NOTICED THAT THE DEDUCTORS HAD ALLOWED SUBSTANTIAL AMOUNT OF INTERES T TO PRIMARY AGRICULTURAL SOCIETIES (PACS) AND OTHER SOCIETIES/INSTITUTION DU RING THE F.Y. 2011-12 AND SUBSEQUENT YEARS BUT DID NOT MAKE TDS ON SUCH PAYME NTS. THEREFORE, A SHOW CAUSE NOTICE U/S 201(1)/201(1A) OF THE ACT WAS ISSU ED ON 29.11.2013 AND IT WAS ASKED TO FILE LEDGERS/DETAILS OF ALL EXPENSES DEBIT ED FOR F.Y. 2011-12 ALONGWITH DETAILS/EVIDENCES OF TDS MADE/DEPOSITED ON SUCH EXP ENSES. IN RESPONSE TO THIS NOTICE DEDUCTOR DID NOT FILE ANY REPLY/SUBMISSION. AGAIN FRESH NOTICE VIDE LETTER F.NO. ITO/(TDS)/GGN/2013-14/774 DATED 21.1.2014 WAS ISSUED AND ASKED TO FILE THE REQUIRED INFORMATION AND FIXED THE CASE FOR 27. 01.2014. IN RESPONSE TO THIS NOTICE, THE A.R. OF THE ASSESSEE APPEARED AND FILED POWER OF ATTORNEY AND CERTAIN INFORMATION. AFTER EXAMINATION OF THE SAME, VIDE AO S LETTER F.NO. ITO/(TDS)/GGN/2013-14/814 DATED 31.01.2014, A FURTH ER NOTICE WAS ISSUED TO FURNISH THE DETAILS OF VARIOUS EXPENSES DEBITED / P AID DURING THE YEAR TOTAL AMOUNT DEBITED/PAID DURING THE YEAR. IN RESPONSE TO THE SAID NOTICE, ASSESSEE BANK FILED INFORMATION VIDE ITS LETTER DATED 5.2.20 14 AND AFTER PERUSING THE SAME, IT WAS FOUND BY THE AO THAT ASSESSEE BANK HAS PAID TOTAL INTEREST OF RS. 5,83,00,389/- DURING THE FY 2011-12 AND IT WAS FURT HER NOTICED THAT INTEREST OF RS. 4,44,16,410/- WAS SHOWN PAID TO PACS WHEREUPON NO TDS WAS MADE, AS A RESULT, THE ASSESSEE BANK FAILED TO DEDUCT THE TAX AT SOURCE U/S. 194A ON PAYMENT OF INTEREST ON DEPOSITS FROM PACS AND OTHER SOCIETI ES AND ALSO FAILED TO DEPOSIT IN THE CENTRAL GOVERNMENT ACCOUNT SO FAR. THE BANK WAS REQUIRED TO SHOW CAUSE AS TO WHY NOT THE ASSESSEE BANK BE TREATED AS PERSO N IN DEFAULT U/S. 201(1)/201(1A) OF THE I.T. ACT, 1961 AND IN RESPONS E THEREOF, THE ASSESSEE SUBMITTED ITS REPLY DATED 24.2.2014 STATING THEREIN THAT TAX HAS NOT BEEN DEDUCTED ON INTEREST TO PRIMARY AGRICULTURAL CREDIT SOCIETIES (PACS) AND KEEPING IN VIEW THE CLAUSE (V) OF SUB-SECTION 3 OF SECTION 194A OF INCOME TAX ACT, WHICH STATES THAT: ITA NOS.: 1463/DEL/16 ASSESSMENT YEAR: 2012-13 PAGE 3 OF 5 THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APPLY T O SUCH INCOME CREDITED OR PAID BY A COOPERATIVE SOCIETY TO A MEMBER THEREOF OR TO ANY OTHER COOPERATIVE SOCIETY. 3.1 IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT T HE ASSESSEE BANK IS A BRANCH OF COOPERATIVE SOCIETY REGISTERED UNDER THE PUNJAB COO PERATIVE SOCITIES ACT, 1912 WITH REGISTRAR OF COOPERATIVE SOCIETIES, PUNJAB ON 27.2.2015. THE PACS FROM WHICH, WE HAVE ACCEPTED DEPOSITS IS OUR MEMBER AS W ELL AS A COOPERATIVE SOCIETY AND RELIED UPON THE CIRCULAR NO 9/2002 DATED 11.9.2 002 ISSUED BY THE INCOME TAX DEPARTMENT. AFTER CONSIDERING THE ABOVE SUBMISS IONS, THE AO WAS NOT SATISFIED WITH THE RELY. ACCORDINGLY, AO HELD THAT AS THE ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING, IT IS C OVERED UNDER THESE SPECIFIC CLAUSES AS HAS BEEN HELD BY THE ITAT, PUNE BENCH IN THE CASE OF BHAGANI NIVEDITA SAHAKARI BASNK LTD. VS. ACIT 87 ITD 579 WH EREIN THE ITAT HELD THAT THE TERM COOPERATIVE SOCIETY MENTIONED IN SECTION 194A(3)(V) IS TO BE INTERPRETED AS COOPERATIVE SOCIETY OTHER THAN COOPE RATIVE BANK. AO FURTHER HELD THAT SINCE THE PERSON RESPONSIBLE HAS FAILED TO FUR NISH THE DOCUMENTARY EVIDENCE IN RESPECT OF THE SAME TO THE CONCERNED CIT, IT IS CONCLUDED THAT THE PERSON RESPONSIBLE HAS FAILED TO COMPLY WITH THE PROVISION S OF THE I.T. ACT, 1961, HENCE, CREDIT FOR THE AMOUNT OF INTEREST CLAIMED TO BE COV ERED BY FORM 15G/15H IS NOT BEING ALLOWED. ACCORDINGLY, THE DEDUCTOR WAS HELD T O BE IN DEFAULT U/S. 201(1)/201(1A) IN RESPECT OF AMOUNT OF RS. 1,66,874 /- AND ACCORDINGLY, TOTAL DEMAND PAYABLE WAS COMPUTED US 201(1) RS. 88,99,974 /- AND U/S. 201(1A) RS. 27,14,409/-, THUS TOTALING TO RS. 1,16,14,383/- VID E ORDER DATED 03.3.2014 PASSED U/S. 201(1) & 201(1A) OF THE INCOME TAX ACT, 1961. 4. AGAINST THE ASSESSMENT ORDER DATED 03.3.2014, TH E ASSESSEE APPEALED BEFORE THE LD. CIT(A-2), GURGAON, WHO VIDE HIS COMMON IMPUGNED ORDER DATED 14.10.2015 HAS ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED W ITH THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 6. ON THE OTHER HAND, LD. A.R. OF THE ASSESSEE RELI ED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HAS PASSED A WELL REA SONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. ITA NOS.: 1463/DEL/16 ASSESSMENT YEAR: 2012-13 PAGE 4 OF 5 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. APROPOS GROUND NO. 1 RELATING TO ISSUE WHETHER THE PROVISIONS OF S ECTION 194A(3)(V) APPLY TO COOPERATIVE SOCIETY INVOLVED IN THE BUSINESS OF BAN KING IS CONCERNED, WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF T HE ITAT, DELHI PASSED IN ITA NO. 5324/DEL/2013 FOR AY 2012-13 IN THE CASE OF ALM ORA URBAN COOPERATIVE BANK LTD. VS. ITO(TDS), KASHIPUR, WHEREIN IT WAS HE LD THAT THE PROVISIONS OF SECTION GIVE BLANKET EXEMPTION TO THE INTEREST PAID BY ANY COOPERATIVE SOCIETY TO ITS MEMBERS AND THAT NEITHER SECTION 2(19) NOR SECT ION 194A(3)(V) CLAIMS ANY DISCRIMINATION BETWEEN THE COOPERATIVE SOCIETIES CA RRYING ON BANKING BUSINESS AND OTHER COOPERATIVE SOCIETIES. THEREFORE, THE LD. CIT(A) HAS RIGHTLY FOLLOWED THE AFORESAID DECISION AND DELETED THE DEMAND IN DI SPUTE, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME AND REJECT THE GROUND NO. 1 RAISED BY THE REVENUE. 7.1 APROPOS GROUND NO. 2 RELATING TO DELETION OF DE MAND RAISED ON ACCOUNT OF SHORT DEDUCTION OF TDS OF RS. 16,686/- AND INTEREST THEREON OF RS. 5,006/- WITH RESPET TO CASES WHERE FORM NO. 15G/15H WERE NOT SUB MITTED TO THE CIT(TDS), CHANDIGARH ON OR BEFORE 7TH DAY OF THE WEEK, NEXT F OLLOWING THE MONTH IN WHICH DECLARATION IS FURNISHED TO HIM IS CONCERNED, WE NO TE THAT AS PER THE ASSESSMENT ORDER THE DEMAND HAS BEEN RAISED AS THE ASSESSEE HA D FAILED TO FURNISH THE DOCUMENTARY EVIDENCE IN RESPECT OF SUBMISSION OF FO RM 15G/15H TO THE CONCERNED CIT, INCOME TAX DEPARTMENT. IT IS NOT DIS PUTED THAT THE ASSESSEE OBTAINED FORM 15G/15H IN RESPECT OF THE PERSON TO W HOM THE INTEREST PERTAINING TO THE DEMAND RAISED IN THE GROUND WAS PAID. IT IS ALSO A FACT THAT THE ASSESSEE HAD CLAIMED THAT THE FORMS WERE SENT TO THE INCOME TAX DEPARTMENT ALBEIT NOT TO THE CONCERNED CIT OF THE INCOME TAX DEPARTMENT. THE AO HAS NOT CONTROVERTED THIS CLAIM OF THE ASSESSEE BUT HAS REJECTED THE SAM E ON THE GROUND THAT THE FORMS WERE NOT SENT TO THE CONCERNED CIT. WE FURTHER NOTE THAT ASSESSEE HAD CONTENDED THAT BEING A COOPERATIVE BANK WORKING BASICALLY IN RURAL AREAS, IT HAD NO IDEA ABOUT CIT HAVING JURISDICTION OVER TDS MATTERS. IN VIEW OF THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAD RECEIVED FORM 15G/15H FROM ALL THE PERSONS TO WHOM THE INTEREST WAS PAID AND THE ASSESSEE HAD ALS O SENT THESE FORMS TO THE INCOME TAX DEPARTMENT. NOT SENDING THESE FORMS SPEC IFICALLY TO CIT, TDS IS A MERE TECHNICAL BREACH. THEREFORE, THE LD. CIT(A) HA S RIGHTLY HELD THAT ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS ON INTEREST SO PAID, HENCE, THE DEMAND RAISED BY THE AO WAS ACCORDINGLY DELETED, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, THEREFORE, WE UPHOLD THE ORDER OF THE LD. CIT (A) ON THE ISSUE IN DISPUTE AND REJECT THE GROUND NO. 2 RAISED BY THE REVENUE. . ITA NOS.: 1463/DEL/16 ASSESSMENT YEAR: 2012-13 PAGE 5 OF 5 4. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE COORDINATE BENCH. RESPECTFULLY FOLLOWING THE SAME, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 5. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUNC ED IN THE OPEN COURT TODAY ON THE 23 RD DAY OF AUGUST, 2018. SD/XX SD/XX SUDHANSHU SRIVASTAVA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NEW DELHI, DATED THE 23 RD DAY OF AUGUST, 2018 COPIES TO: (1) THE APPELLANT (2) THE RESPOND ENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI