M/s Vijaya Bank Limited , Haveri V. The Income Tax Officer TDS Ward , Davangere

ITA 1555/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4165 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-02-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: OMAR ABDULLAH S M
• Keywords: Principle of natural justice; Period of limitation; Non-deduction of tax; Reasonable cause; Condonation of delay; TDS; Set aside
• Section: 201(1); 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO S . 1555 & 1556/ BANG/201 8 ASSESSMENT YEAR S : 20 1 0 - 11 & 2011 - 12 M/S. VIJAYA BANK LIMITED, SIDDESHWAR CHAMBERS, P B ROAD, HAVERI 581 110. TAN: BLRV04814F VS. THE INCOME TAX OFFICER, TDS WARD, DAVANGERE. APPELLANT RESPONDENT ASSESSEE BY : SHRI OMAR ABDULLAH S.M., CA RE VENUE BY : SHRI R.N. SIDDAPPAJI, ADDL. CIT (DR) DATE OF HEARING : 08 .0 5 .201 9 DATE OF PRONOUNCEMENT : 10. 0 5 .201 9 O R D E R PER SHRI LALIET KUMAR, JUDICIAL MEMBER THE PRESENT APPEALS ARE BEING FILED BY THE ASSESSEE AND THE EFFECTIVE GROUND NOS. ARE 4 TO 8 IN ITA NO. 1555/BANG/2018 FOR ASSESSMENT YEAR 2010-11. 4. THE LD. CIT(A) ERRED IN NOT CONDONING THE DELAY FOR APPEAL DESPITE REASONABLE AND SUFFICIENT CAUSE. 5. THE LD. AO ERRED IN TREATING THE APPELLANT AS AN ASSESSEE-IN-DEFAULT U/S. 201(1) OF THE ACT FOR NON-DEDUCTION OF TAX AT SOURCE AND THE LD. CIT(A) ERRED IN CONFIRMING THE SAME. 6. THE LD. AO ERRED IN TREATING THE APPELLANT AS AN ASSESSEE-IN-DEFAULT DESPITE THE APPELLANT FURNISHING COPIES OF RETURN OF INCOME OF THE DEDUCTEE. THE LD. AO FURTHER ERRED IN HOLDING THAT THE APPELLANT OUGHT TO HAVE FURNISHED CERTIFICATE IN FORM 26A AS PER RULE 31ACB. 7. THE LD. AO ERRED IN HOLDING THAT THE APPELLANT WAS LIABLE TO DEDUCT TAX AT SOURCE ON INTEREST PAID TO CO-OPERATIVE BANKS CONTRARY TO THE PROVISIONS OF SECTION 194A(3)(III)(A). 8. NOTWITHSTANDING THE ABOVE, THE LD. AO ERRED IN IGNORING FORM 15G AND FORM 15H SUBMITTED BY THE CUSTOMERS TO THE APPELLANT AND THEREBY ERRED IN TREATING THE APPELLANT AS AN ASSESSE-IN-DEFAULT FOR NON- DEDUCTION OF TAX AT SOURCE ON THE INTEREST PAID TO THE CUSTOMERS. ITA NOS. 1555 & 1556/BANG/2018 PAGE 2 OF 5 2. THE TDS OFFICER PASSED THE ORDER UNDER SECTION 201/201 (1A) AS THERE WAS DEFAULT ON PART OF THE ASSESSEE FOR NOT DEDUCTING THE TDS AT THE TIME OF MAKING THE PAYMENT TO INDIVIDUALS, BANKS AND THE COOPERATIVE SOCIETY INVOLVED IN FINANCING AND LENDING OF MONEY AGAINST THE ASSESSEE. 3. FEELING AGGRIEVED BY THE ORDER PASSED BY THE TDS OFFICER DATED 30 JUNE 2016 THE APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE COMMISSIONER ON 9/11 2016. AS THERE WAS SUBSTANTIAL DELAY IN FILING THE APPEAL BY THE ASSESSEE, THE COMMISSIONER HAD DISMISSED THE APPLICATION FOR CONTAMINATION DELAY IN PRESSURING THE APPEAL BEFORE HIM HOWEVER THE COMMISSIONER HAD ALSO DECIDED THE ISSUE ON MERIT.. 4. THE ID. CIT(A) HAD DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THERE IS DELAY IN FILING THE APPEAL. 5. FEELING AGGRIEVED FROM THE ORDER PASSED BY THE CIT (A) , THE ASSESSEE PREFERRED THE PRESENT APPEAL. THE ASSESSEE HAD NOT PRESSED THE GROUND NO 1-3 . AT THE OUTSET THE ID. AR HAD SUBMITTED THAT THE GROUND NUMBERS 4 TO 8 ARE REQUIRED TO BE ADJUDICATED AND THEREFORE WE HAD ONLY HEARD THESE GROUNDS AT THE TIME OF HEARING. THE GROUND NO 4 PERTAINS TO DISMISSAL OF APPEAL ON ACCOUNT OF DELAY IN FILLING OF APPEAL BEFORE COMMISSIONER AND DISMISSAL THEREOF BY THE COMMISSIONER. 6. THE ID. AR FOR THE ASSESSEE HAD SUBMITTED THAT THE ORDER PASSED BY THE COMMISSIONER WAS WRONG AND ERRONEOUS, AS THE COMMISSIONER HAD NOT CONDONED THE DELAY IN FILING THE APPEAL, DESPITE THE FACT THAT PLAUSIBLE REASONS WERE GIVEN BY THE ASSESSEE FOR NOT PREFERRING THE APPEAL WITHIN THE STATUTORY PERIOD OF LIMITATION. IT WAS SUBMITTED THAT THE DELAY IN FILING THE APPEAL IS REQUIRED TO BE CONDONE AND ACCORDINGLY THE MATTER IS REQUIRED TO BE DECIDED ON MERIT. IT IS FURTHER SUBMITTED THAT THE ULTIMATE OBJECT OF ASSESSMENT BEING TO COMPUTE THE CORRECT INCOME OF THE ASSESSEE AND BROUGHT IT TO TAX. IN THIS CONTEXT IT IS PRAYED BY THE LEARNED AR THAT THE IMPUGNED ORDER OF THE CIT(A) BE SET ASIDE AND MATTER RESTORED TO FILE OF ITA NOS. 1555 & 1556/BANG/2018 PAGE 3 OF 5 CIT(A) FOR HEARING AND ADJUDICATION ON MERITS. BESIDE THAT THE LD LD AR HAD MADE SUBMISSIONS ON MERIT ALSO, IN SUPPORT OF OTHER GROUNDS. 7. THE ID. DR FOR THE REVENUE HAD SUBMITTED THAT THE REASONS GIVEN BY THE ASSESSEE WERE NOT SUFFICIENT IN THE EYES OF LAW AND THEREFORE THE ACTION ON THE PART OF THE COMMISSIONER WAS IN ACCORDANCE WITH LAW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE NOTICED THAT THE COMMISSIONER HAD DISMISSED THE APPEAL ON ACCOUNT OF DELAY IN FILING THE APPEAL AND FURTHER HAD DISMISSED THE APPEAL ON MERIT BY THE DETAILED ORDER IN RESPECT OF BOTH THE ASSESSMENT YEARS. 9. THE ASSESSEE DURING THE COURSE OF HEARING HAD SHOWN THE REASONABLE CAUSE FOR NOT FILING THE APPEAL BEFORE THE COMMISSIONER WITHIN THE STATUTORY PERIOD AS PROVIDED BY ACT, AFTER GOING THROUGH THE REASONS WE ARE CONVINCED THAT THE ASSESSEE WAS PREVENTED FROM FILLING THE APPEAL WITH PERIOD OF LIMITATION , HENCE IN OUR VIEW THE COMMISSIONER SHOULD HAVE CONDONED THE DELAY AND DECIDED THE APPEAL ON MERIT AFTER HEARING THE ASSESSEE AND VERIFYING THE RECORD. 10. IN FACT IT WAS INCUMBENT UPON THE COMMISSIONER TO EXAMINE THE FACTS BROUGHT ON BY THE ASSESSEE IN SUPPORT OF NOT FURNISHING THE APPEAL WITHIN THE STATUTORY PERIOD AND PASS REASONED ORDER IN THIS REGARD. THE COMMISSIONER WITHOUT DOING THE NEEDFUL HAD DISMISSED THE APPEAL IS PREFERRED BY THE ASSESSEE MERELY RELYING UPON SOME JUDICIAL PRONOUNCEMENT BY THE HON'BLE SUPREME COURT. IT IS A SETTLED PROPOSITION OF LAW THAT THE JUDGMENTS OF THE HON'BLE SUPREME COURT IN VARIOUS PRONOUNCEMENT IS REQUIRED TO FOLLOW ON THE BASIS OF THE RATIO LAID DOWN IN THE SAID JUDGEMENTS IN THE FACTS OF THOSE CASES DECIDED BY THE COURT AND SHOULD NOT BE FOLLOWED AS A STATUTE WITHOUT LOOKING INTO THE FACTS OF THE CASE . TAKING INTO ACCOUNT THE FACTS OF THE MATTER AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE ARE INCLINED TO CONCUR WITH THIS PLEA OF ASSESSEE, AS IT IS HIGHLY UNLIKELY THAT THE ASSESSEE WOULD INTENTIONALLY OR DELIBERATELY NOT PREFER THE APPEAL BEFORE THE CIT(A); AS THIS WOULD CAUSE IMMENSE HARM TO HIS OWN ITA NOS. 1555 & 1556/BANG/2018 PAGE 4 OF 5 INTERESTS. IN THE LIGHT OF ABOVE WE SET ASIDE THE ORDER OF THE COMMISSIONER WHEREBY HE HAD DISMISSED THE CONDONATION OF DELAY APPLICATION AND CONDONED THE DELAY. WE ALSO DIRECT THE ID. CIT(A) TO DECIDE THE APPEAL AFRESH AFTER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. 11. WE HAD RECORDED ELSEWHERE THAT THE COMMISSIONER HAD DECIDED THE APPEAL ON MERIT ALSO. WE APPRECIATE THE COMMISSIONER FOR DECIDING THE APPEAL ON MERIT AFTER DISMISSING THE APPLICATION FOR CONDONATION OF DELAY. HOWEVER SINCE WE HAD CONDONED THE DELAY IN FILLING THE APPEAL AND FURTHER THE COMMISSIONER HAD DECIDED THE APPEAL WITHOUT CONSIDERING THE WRITTEN SUBMISSIONS ON RECORD OF THE ASSESSEE , WHILE DECIDING THE APPEAL ON MERIT WE DIRECT THE ID. CIT(A) TO DECIDE THE APPEAL FILED BY THE ASSESSEE DE NOVO AFTER AFFORDING THE OPPORTUNITY OF HEARING TO THE ASSESSEE AND FOLLOWING PRINCIPLE OF NATURAL JUSTICE. 12. NEEDLESS TO SAY THAT THE ASSESSEE SHALL FILE ALL THE DOCUMENTS, RETURN OF INCOME OF THE DEDUCTEE, TDS CERTIFICATE 15G AND 15H AND ANY OTHER DOCUMENTS AS IT DEEMS AND APPROPRIATE FOR JUST AND FAIR ADJUDICATION OF THE APPEALS . THE CIT(A) IS ALSO DIRECTED TO CONSIDER THE BINDING DECISION OF COORDINATE BENCH IN THE MATTER OF VIJAYA BANK VS. ITO [2014] 49 TAXMANN.COM 533 (DELHI - TRIB.) AND ALSO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF M/S. HINDUSTAN COCA COLA BEVERAGE PVT. LTD. VS. CIT IN CIVIL APPEAL NO. 3765 OF 2007 DECIDED ON 16.08.2007 AND ALSO THE PROVISIONS OF SECTION 194A(3)(III). THE APPELLANT IS ALSO DIRECTED TO APPEAR ON THE DATE FIXED BY THE COMMISSIONER AND SHALL NOT TAKE ADJOURNMENT WITHOUT ANY JUSTIFIABLE REASON AND COOPERATE IN EARLY DISPOSAL OF APPEAL. 13. IN VIEW OF THE ABOVE. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 14. AS THE FACTS OF THE APPEAL BEING ITA NO. 1556/BANG/2018 ARE SIMILAR TO THE FACTS OF THE APPEAL IN ITA NO. 1555/BANG/2018. THERE THE APPEAL OF THE ASSESSEE BEARING ITA NO. 1556/BANG/2018 IS ALSO BY NOW SIMILAR DIRECTION ITA NOS. 1555 & 1556/BANG/2018 PAGE 5 OF 5 AS WE HAVE PASSED IN ITA NO. 1555/BANG/2018. 15. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (ARUN KUMAR GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 10 TH MAY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.