Assistant Commissioner of Income-Tax, Mangalore V. M/s. Kodagu District Co-Operative Bank Ltd, Kodagu

ITA 169/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7567 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 23-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRATIBHA
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE S HRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER I.T . (IT) A. NO. 169 /BANG/20 17 (ASSESSMENT YEAR : 20 12 - 13 ) ASST. COMMISSIONER OF INCOME TAX, INTERNATION AL TAXATION, M ANGALORE. . APPELLANT. VS. M/S. KODAGU DISTRICT CO - OPERATIVE BANK LTD., HEAD OFICE BRANCH, MADIKERI, KODAGU - 571 201 (KARNATAKA) .. RESPONDENT. APPELLANT BY : SHRI SUNIL KUMAR AGARWAL, ADDL. CIT (D.R) R E SPONDENT BY : SMT. PRATIBHA, ADVOCATE. DATE OF H EARING : 19.09.2017. DATE OF P RONOUNCEMENT : 22 .09 .201 7 . O R D E R PER SHRI VIJAY P AL RAO, J .M . : THIS APPEAL BY THE REVENU E IS DIRECTED AGAINST THE ORDER DT. 09.11.2016 OF COMMISSIONER OF INCOME TAX (APPEALS) - 12 , BANGALORE FOR THE ASSESSMENT YEAR 20 12 - 13. 2. TH E REVENUE HAS RAISED THE FOLLOWING GROUNDS : 2 IT (IT) A NO. 169 /BANG/20 17 3. THE ASSESSEE IS A CO - OPERATIVE CENTRAL BANK AND ASSESSED AT DELHI HAVING ITS HEAD OFFICE IN MADIKERI, KODAGU, KARNATAKA. THE ASST. COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), MANGALORE ON VERI FICATION FOUND THAT THE BANK HAS NOT DEDUCTED TAX ON INTEREST 3 IT (IT) A NO. 169 /BANG/20 17 PAYMENT MADE TO DR. CHONDAMMA VIJAYAKRISHNAN, A NON - RESIDENT INDIAN HAVING PAN AVAPV 8221F ON HER FIXED DEPOSIT IN THE BANK. ACCORDINGY, THE ASSESSING OFFICER PROCEEDED TO ASSESS THE ASSESSEE AS ASSESSEE IN DEFAULT UNDER SECTIONS 201(1) & 201(1A) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') AND PASSED THE ORDER DT.14.1.2016. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE CIT (APPEALS) AND RAISED VARIOUS OBJECTIONS INCLUDING THE OBJECTION AGAINST THE JURISDICTION OF THE ASSESSING OFFICER. THE CIT (APPEALS) NOTED THAT AS PER THE CBDT NOTIFICATION NO.57 OF 2014 THE JURISDICTION IS VESTED WITH THE OFFICER UNDER WHOSE SUPERVISION AND CONTROL THE MATTER INCLUDING TO NON - RESIDENT PERSON REQUIRING DEDUCTION OF TAX UNDER SECTION 195 OF THE ACT FAILS . ACCORDINGLY, THE LEARNED CIT (APPEALS) DISMISSED THE SAID GROUND OF THE ASSESSEE HOWEVER THE CIT (APPEALS) NOTED THE FACT THAT THE DEDUCTEE PAID THE TAX ON INCOME AND FILED RETU RN OF INCOME THEN A DEDUCTOR CANNOT BE DEEMED TO BE THE ASSESSEE IN DEFAULT. ACCORDINGLY, THE CIT (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE CANNOT BE DEEMED TO BE THE ASSESSEE IN DEFAULT UNDER SECTIONS 201(1) & 201(1A) OF THE ACT WHEN T HE DEDUCTEE/RECIPIENT OF INTEREST HAS ALREADY PAID THE TAX. 4 IT (IT) A NO. 169 /BANG/20 17 4. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE CIT (APPEALS) HAS ALLOWED THE APPEAL OF THE ASSESSEE WITHOUT VERIFICATION OF THE FACT THAT WHETHER THE INTEREST AM OUNT WAS ACTUALLY OFFERED TO TAX BY THE DEDUCTEE. HE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 5. ON THE OTHER HAND, THE LD. AR HAS FILED A COPY OF NOTE / REPLY FILED BY THE ASSESSEE THROUGH ITS CA AS WELL AS A COPY OF THE RETURN OF INCOME OF THE DEDUCTEE DR. CHONDAMMA VIJAYAKRISHNAN. WE FIND THAT IN THE RETURN OF INCOME AND IN PARTICULARLY IN THE STATEMENT OF INCOME THE RECIPIENT HAS SHOWN THE INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES ON ACCOUNT OF BANK INTEREST OF RS.40,11,161. THUS WHEN THE RECIPIENT OF THE INTEREST HAS ALREADY FILED THE RETURN OF INCOME AND INCLUDED THE BANK INTEREST IN THE TOTAL INCOME OF THE DEDUCTEE THEN THE ASSESSEE CANNOT BE DEEMED TO BE ASSESSEE IN DEFAULT. THE LD. AR HAS RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE PVT. LTD. VS. CIT 293 ITR 226 WHEREIN THE HON'BLE SUPREME COURT HAS HELD IN PARAS 9 TO 11 AS UNDER : 9. WE HAVE ALREADY NOTICED THAT THE ORDER PASSED BY THE TRIBUNAL TO REOPEN THE MATT ER FOR FURTHER HEARING AS REGARDS GROUND NO. 7 HAS ATTAINED ITS FINALITY. IN THE 5 IT (IT) A NO. 169 /BANG/20 17 CIRCUMSTANCES, THE HIGH COURT COULD NOT HAVE INTERFERED WITH THE FINAL ORDER PASSED BY THE INCOME - TAX APPELLATE TRIBUNAL. 10. BE THAT AS IT MAY, THE CIRCULAR NO. 275/201/95 - IT (B), DATED 29 - 1 - 1997 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, IN OUR CONSIDERED OPINION, SHOULD PUT AN END TO THE CONTROVERSY. THE CIRCULAR DECLARES 'NO DEMAND VISUALIZED UNDER SECTION 201(1) OF THE INCOME - TAX ACT SHOULD BE ENFORCED AFTER THE TAX DEDUC TOR HAS SATISFIED THE OFFICER - IN - CHARGE OF TDS, THAT TAXES DUE HAVE BEEN PAID BY THE DEDUCTEE - ASSESSEE. HOWEVER, THIS WILL NOT ALTER THE LIABILITY TO CHARGE INTEREST UNDER SECTION 201(1A) OF THE ACT TILL THE DATE OF PAYMENT OF TAXES BY THE DEDUCTEE - ASSESSE E OR THE LIABILITY FOR PENALTY UNDER SECTION 271C OF THE INCOME - TAX ACT.' 11. IN THE INSTANT CASE, THE APPELLANT HAD PAID THE INTEREST UNDER SECTION 201(1A) OF THE ACT AND THERE IS NO DISPUTE THAT THE TAX DUE HAD BEEN PAID BY DEDUCTEE - ASSESSEE (M/S. PRADEE P OIL CORPORATION). IT IS NOT DISPUTED BEFORE US THAT THE CIRCULAR IS APPLICABLE TO THE FACTS SITUATION ON HAND. IN VIEW OF THE FACT WHEN THE DEDUCTEE / RECIPIENT OF INTEREST HAS ALREADY OFFERED THE AMOUNT TO TAX AS PART OF THE RETURNED INCOME THEN THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTIONS 201(1) & 201(1A) OF THE ACT IS NOT SUSTAINABLE. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE CIT (APPEALS) QUA THIS ISSUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22ND SEPT., 2017. SD/ - ( INTURI RAMA RAO ) ACCOUNTANT MEMBER SD/ - ( VIJAY PAL RAO ) JUDICIAL MEMBER BANGALORE, DT. 22 .09.2017. *REDDY GP