M/s.Pragathi Krishna Gramin Bank, Bangalore V. Assistant Commissioner of Income-Tax, Bellary

ITA 1860/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7243 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 03-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRATHIBA
• Keywords: Opportunity of being heard
• Section: 201(1)

Judgement Text

ITA.1860/BANG/2016 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'A', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIT KUMAR, JUDICIAL MEMBER I.T.A NO.1860/BANG/2016 (ASSESSMENT YEAR : 2013-14) M/S PRAGATHI KRISHNA GRAMIN BANK, HEAD OFFICE. NO.32, SANGANAKAL ROAD, GANDHI NAGAR, BELLARY 583 103 . APPELLANT PAN ; BLRPO3283E VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE -1, BELLARY . RESPONDENT ASSESSEE BY : SMT. PRATHIBA, ADVOCATE REVENUE BY : SHRI. BISWARANJAN SURMAL, CIT - DR HEARD ON : 15.11.2017 PRONOUNCED ON : 30.11.2017 O R D E R PER LALIT KUMAR, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF CIT(A), GULBARGA DATED 29.08.2016 FOR ASST. YEAR 20 13-14. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UND ER:- ITA.1860/BANG/2016 PAGE - 2 2.1 THE ASSESSEE IS A REGIONAL RURAL BANK FORMED UN DER THE REGIONAL BANKS ACT, 1976. THE ASSESSING OFFICER ON VERIFICA TION IN RESPECT OF TDS ON INTEREST PAYMENTS MADE BY THE ASSESSEE, DETE RMINED A SUM OF RS.61,14,41,704/- AS TDS LIABILITY U/S 201(1) ALONG WITH INTEREST U/S 201(1A) OF THE INCOME-TAX ACT, 1961 2.2 AGGRIEVED BY THE ORDERS U/S 201(1)/201(1A) OF T HE ACT PASSED BY THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 2.3 THE CIT(A) DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED ORDERS DATED 29.08.2016. 3.1 AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE HAS PREFERRED APPEAL BEFORE THE TRIBUNAL, WHEREIN IT HAS RAISED T HE FOLLOWING GROUNDS : ITA.1860/BANG/2016 PAGE - 3 3.2 WE HAVE HEARD RIVAL CONTENTIONS OF THE LD AR FO R THE ASSESSEE IN SUPPORT OF THE GROUNDS RAISED AND THE LD DR IN SUPP ORT OF THE IMPUGNED ORDER OF THE CIT(A). THE GROUNDS RAISED ( SUPRA) ARE IN RESPECT OF THE TREATMENT OF THE ASSESSEE BY THE AUT HORITIES BELOW AS AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT FOR FAILU RE ON ITS PART TO DEDUCT TAX AT SOURCE ON INTEREST PAYMENTS AS REQUIR ED U/S 194A OF THE ACT. WHILE DISPOSING THE ASSESSEES APPEAL, THE C IT(A) CONSIDERED THE ISSUE AND HELD AS UNDER AT PARAS 5 TO 6 THEREOF . 5.0. IT IS CLEAR FROM THE ABOVE THAT THE AO COMPLET ED THE TDS ASSESSMENT AND PASSED ORDER U/ S 201/201 (1A) OF TH E ACT WITHOUT GIVING SUFFICIENT TIME AND OPPORTUNITY. IN THE CASE OF APPELLANT BANK HAVING 325 BRANCHES IT COULD NOT COLLECT THE I NFORMATION WITH REGARD TO TDS DEDUCTED, PAID AND OTHER RELEVANT INF ORMATION IN TIME AND SUBMITTED BEFORE THE AO DURING THE TDS PRO CEEDINGS. THE AO HAS NOT CONSIDERED THE FORM NO. 15G/H SINCE THEY HAVE NOT FILED BEFORE JURISDICTIONAL CIT IN PRESCRIBED T IME. 5.1. THE CIT(A), HUBLI IN ASSESSEE'S OWN CASE ON TH E SAME ISSUES FOR A.Y.2010-11AFTER CONSIDERING THE SUBMISS IONS OF ASSESSEE AND THE ASSESSMENT ORDER HELD AS HENCE, T HE AO IS DIRECTED TO VERIFY THE BRANCH WISE AND DEDUCTEE WIS E DETAILS OF ITA.1860/BANG/2016 PAGE - 4 THE INTEREST PAYMENTS AND FILLING OF THE FORM 15G/H , BEFORE RESPECTIVE CIT'S, IN TIME AND AFTER GIVING A REASON ABLE OPPORTUNITY TO THE ASSESSEE, THE CLAIM OF THE ASSES SEE HAS TO BE CONSIDERED ACCORDINGLY. 6.0. IT CAN BE OBSERVED FROM THE ORDER OF CIT(A), H UBLI IN ASSESSEES OWN CASE FOR A.Y.2010-11 ON THE SAME ISS UE, THE ASSESSEE HAD NOT SUBMITTED THE REQUIRED INFORMATION IN TIME DURING THE TDS VERIFICATION BY THE JURISDICTIONAL A O. IN THE A.Y.2011-12 ALSO THE ASSESSEE HAS NOT SUBMITTED THE INFORMATION IN TIME FOR TOS VERIFICATION. SINCE THE TIME IS GET TING BARRED TO COMPLETE THE TDS VERIFICATION PROCESS AND TO PAS S THE ORDER U/S 201(1)/201(1A) OF THE ACT, THE AO CANNOT WAIT FOR INFORMATION AND PASSED THE ORDER U/S 201(1)/201(1A) OF THE ACT. IT CAN BE SEEN THAT THIS HAS BECOME THE ASSESS EE'S REGULAR PRACTICE FOR NOT PRODUCING INFORMATION IN T IME STATING THE PRACTICAL PROBLEMS OF THE ASSESSEE BANK FOR COLLECTING THE INFORMATION FROM ALL ITS BRANCHES. I T IS ASSESSEE'S DUTY TO COMPLY WITH THE TDS PROVISIONS A ND TO KEEP THE INFORMATION READY WHICH IS MANDATORILY TO BE MAINTAINED AS PER THE TDS PROVISIONS. WHENEVER JURISDICTIONAL AO CALLS FOR INFORMATION FOR TOS VER IFICATION IT IS THE ASSESSEE'S DUTY TO CO-OPERATE AND PROVIDE THE INFORMATION VIZ COMPLETE PARTICULARS OF INTEREST PA YMENTS BRANCH WISE AND DEDUCTEE WISE AND FILING OF THE FOR M I5G/15H WHICH HAS TO BE FILED BEFORE JURISDICTIONAL CITS WITHIN PRESCRIBED TIME. IN THIS CASE THE ASSESSEE H AS FAILED TO PROVIDE THE INFORMATION IN TIME TO COMPLETE THE TDS VERIFICATION PROCESS AND TO PASS THE ORDER U/S 201( 1)/201(IA) OF THE ACT. HENCE THE DISALLOWANCE MADE BY THE AO I S IN ORDER AND IS UPHELD. THE GROUNDS OF APPEAL OF THE ASSESSE E ARE DISMISSED. 3.2.2 FROM A PERUSAL OF THE OBSERVATIONS AND FINDIN GS RENDERED BY THE CIT(A) AT PARA 5 AND 6 OF THE IMPU GNED ORDER (SUPRA), IT IS AMPLY CLEAR THAT THE AO COMPLETED TH E TDS ASSESSMENT, AND PASSED THE ORDERS U/S 201(1)/201(1A ) OF THE ACT ITA.1860/BANG/2016 PAGE - 5 FOR THIS YEAR, ADMITTEDLY WITHOUT AFFORDING THE ASS ESSEE SUFFICIENT TIME AND OPPORTUNITY TO COLLECT THE INFORMATION FRO M ITS 325 BRANCHES IN RESPECT OF TDS DEDUCTED ON INTEREST PAY MENTS AND OTHER RELEVANT INFORMATION FOR HIS CONSIDERATION. IT IS FURTHER OBSERVED BY THE CIT(A) THAT IN SIMILAR CIRCUMSTANCE S, THE CIT(A) WHILE DISPOSING OFF THE ASSESSEES APPEAL FO R ASST. YEAR 2010-11 ON IDENTICAL ISSUES HAD, AFTER CONSIDERING THE ASSESSEES SUBMISSIONS, DIRECTED THE AO TO VERIFY THE BRANCH W ISE AND DEDUCTEE WISE DETAILS OF THE INTEREST PAYMENTS AND FILING OF FORM 15G/15H BEFORE THE RESPECTIVE CIT IN TIME AND TO CO NSIDER THE ASSESSEES CLAIMS AFTER AFFORDING REASONABLE OPPORT UNITY TO THE ASSESSEE. AFTER ADMITTEDLY OBSERVING AS ABOVE, THE CIT(A) HAS STRANGELY PROCEEDED TO UPHOLD ORDERS OF THE AO STAT ING THAT THE ASSESSEE IS IN THE REGULAR PRACTICE OF NOT PROVIDIN G INFORMATION REQUIRED FOR TDS VERIFICATION BEFORE THE AO AND SIN CE THE MATTER WAS GETTING BARRED BY LIMITATION, THE AOS ACTION I N PASSING THE ORDERS U/S 201(1)/201(1A) OF THE ACT WAS UPHELD. I N OUR CONSIDERED VIEW ON AN APPRAISAL OF THE MATERIAL ON RECORD, WE FIND THAT THE COORDINATE BENCH OF THE TRIBUNAL IN T HE ASSESSEES OWN CASE FOR AYS. 2011-12 AND 2012-13 HAD AN OCCASI ON TO DEAL WITH IDENTICAL FACTS SIMILAR TO THAT PREVAILING IN THE ASST. YEARS 2011-12 AND 2012-13, WHERE THE AO WAS DIRECTED BY C IT(A) TO VERIFY AND EXAMINE THE ISSUE AFRESH AND CONSIDER TH E ASSESSEES CLAIM AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORT UNITY OF BEING HEARD. IN THE CASE OF HAND IT IS NOT CLEAR FROM TH E RECORD AS TO ITA.1860/BANG/2016 PAGE - 6 HOW MANY CASES OF PAYMENT OF INTEREST THE ASSESSEE WAS HAVING FORM NO.15G/15H AND WHETHER THESE FORMS WERE AT ALL SUBMITTED WITH THE JURISDICTIONAL CIT. IN THIS FAC TUAL MATRIX OF THE CASE, AS DISCUSSED ABOVE, WE ARE OF THE OPINION THAT THE IMPUGNED ORDER OF THE CIT(A) REJECTING THE ASSESSEE S CLAIMSS WHICH ARE PRESENTLY BEFORE US FOR CONSIDERATION, CA NNOT BE SUSTAINED IN VIEW OF THE OBSERVATIONS BY THE CIT(A ) OF THE LACUNA AND SHORTCOMINGS OF THE AO IN CARRYING OUT PROPER V ERIFICATION IN THE TDS MADE ON INTEREST PAYMENTS. IN THIS VIEW OF THE MATTER, WE, THEREFORE, IN THE INTEREST OF EQUITY AND JUSTIC E, SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) FOR ASST. YEAR 2013-14 AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DENOVO ADJUDIC ATION OF THIS MATTER, WITH THE DIRECTIONS TO VERIFY THE ASSESSEE S TDS LIABILITY BRANCH WISE AND DEDUCTEE WISE DETAILS OF INTEREST P AYMENTS ON THE POINT OF AVAILABILITY OF FORM NO.15G/15H ONLY IN RE SPECT OF CASES WHEN SUCH FORMS WERE BEFORE THE RESPECTIVE CIT EVEN THOUGH BELATEDLY. THE ASSESSEE WILL GET THE BENEFIT OF AVA ILABILITY OF FORM NO.15G/15H ONLY IN RESPECT OF CASES WHERE SUCH FORM S ARE AVAILABLE WITH THE ASSESSEE AND SUBMITTED WITH THE JURISDICTIONAL CIT CONCERNED. NEEDLESS TO ADD THAT THE AO WILL AD JUDICATE THE MATTER DENOVO ONLY AFTER AFFORDING THE ASSESSEE ADE QUATE OPPORTUNITY OF BEING HEARD IN THE MATTER AND TO FIL E DETAILS/SUBMISSIONS REQUIRED IN THIS REGARD. CONSE QUENTLY, THE ASSESSEES GROUNDS ARE TREATED AS ALLOWED FOR STATI STICAL PURPOSES. ITA.1860/BANG/2016 PAGE - 7 4. IN THE RESULT, THE ASSESSEES APPEAL FOR ASST. Y EAR 2013-14 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH DAY OF NOVEMBER, 2017. SD/- SD/- (A. K. GARODIA) (LALIT KUMAR) ACCOUNTANT MEMBER JUDICIAL M EMBER BENGALURU DATED : 30.11.2017 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY