The State Bank of Patiala, Ujjain V. The Dy. CIT Centralised Processing Cell-TDS, Ujjain

ITA 211/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5815 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-08-2016
• Assessment Year: misc
• Appeal Filed On: 10-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: SHARAD JAIN JCA
• Keywords: Revised return
• Section: 206AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER STATE BANK OF PATIALA, 30, VARRUCHI MARG, FREEGANJ, UJJAIN TAN: BPLS03866C VS. DCIT(TDS) CPC, GHAZIABAD APPELLANT RESPONDENT APPELLANT BY SHRI SHARAD JAIN, JCA RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 18.08.2016 DATE OF PRONOUNCEMENT 18.08.2016 O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS), UJJAIN, [ HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 15.12.2015 AND PER TAINS TO ASSESSMENT YEAR 2013-14 AS AGAINST APPEAL DECIDED I N ORDER U/S. 200A OF INCOME TAX ACT,1961( HEREINAFTER REFER RED TO AS I.T.A. NO.211/IND/2016 ASSESSMENT YEAR: 2013-14 (QTR.3) STATE BANK OF PATIYALA,UJJAIN I.T.A.NO. 211/IND/2 016 A.Y. 2013-14 ( QTR.3) PAGE 2 OF 7 2 'THE ACT) DATED 25.12.2013 OF DCIT(TDS),CPC, GHAZIA BAD [HEREINAFTER REFERRED TO AS THE AO]. 2. GROUND NO. 1 OF THE APPEAL OF THE ASSESSEE READS AS UNDER :- THAT, ON THE FACTS AND THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN HOLDING THAT THE APPELLANT WAS LIABLE TO DEDUCT TDS ON INTEREST PAYMENT TO SHRI PRAFULLA KUM AR JAIN (PAN: ABMPJ 1974K) @ 20% AS PER SECTION 206AA (FOR NON AVAILABILITY OF PAN OF PRAFULLA KUMAR), INSTEAD OF NORMAL TDS RATE ON INTEREST AT 10%. THE SUM AND SUBSTANCE OF THE GROUNDS OF APPEAL IS T HAT THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE ASSESS EE WAS LIABLE TO DEDUCT TDS U/S 194A READ WITH SECTION 206A A OF THE ACT AT RS.7,755/- AND ALSO ERRED IN CONFIRMING INTE REST OF RS.1,025/- LEVIED U/S 201(1A) OF THE ACT ON THE GRO UND THAT THE ASSESSEE WAS LIABLE TO DEDUCT TDS ON INTEREST P AYMENT @ 20% AS PER SECTION 206AA (FOR NON-AVAILABILITY OF P AN) INSTEAD OF NORMAL RATE OF TDS AT 10%. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A NATIONALISED BANK WHICH WAS REQUIRED TO DEDUCT TDS ON THE STIPULATED RATE AND DEPOSIT THE SAME IN THE GOVT. A CCOUNT. THE ASSESSEE HAS DEDUCTED TDS @ 10% IN THE CASE OF SHRI PRAFULL STATE BANK OF PATIYALA,UJJAIN I.T.A.NO. 211/IND/2 016 A.Y. 2013-14 ( QTR.3) PAGE 3 OF 7 3 KUMAR JAIN. THE PAN OF THIS PERSON WAS QUOTED WRONGL Y, HENCE, THE ASSESSEE WAS REQUIRED TO DEDUCT TDS @ 20 %. THEREFORE, THE ASSESSING OFFICER RAISED THE DEMAND OF RS. 8,780/- ON ACCOUNT OF SHORT DEDUCTION OF TDS AND IN TEREST OF RS.1,025/- ON SHORT DEDUCTION. AGAINST THIS, THE A SSESSEE FILED APPEAL BEFORE THE LEARNED CIT(A) WHO ALSO CONF IRMED THE ACTION OF THE ASSESSING OFFICER. 4. AGGRIEVED WITH THE ABOVE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT CORRECT PAN OF THE PAYEE IS AVAILABLE WITH THE ASSES SEE, THEREFORE, TDS LIABILITY IS 10% INSTEAD OF 20%. TH E CORRECT PAN OF PAYEE HAS ALSO BEEN MENTIONED AT PAGE 4 PARA 7 OF THE ORDER OF THE LEARNED CIT(A). HOWEVER, DUE TO TYPING ERROR ON ACCOUNT OF LARGE VOLUME OF ENTRIES IN TDS RETURN, WR ONG PAN ONLY OF THIS PAYEE WAS MENTIONED IN THE ORIGINAL RE TURN. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT LAT ER ON CORRECT PAN OF THIS PAYEE WAS MENTIONED IN THE REVIS ED TDS RETURN AND THE SAME WAS ACCEPTED BY THE DEPARTMENT A ND THE CREDIT HAS ALSO BEEN GIVEN TO THIS PAYEE BUT THE DE MAND FROM STATE BANK OF PATIYALA,UJJAIN I.T.A.NO. 211/IND/2 016 A.Y. 2013-14 ( QTR.3) PAGE 4 OF 7 4 THE ASSESSEE FOR SHORT DEDUCTION OF TDS REMAINED TO BE THERE DUE TO NON-UPDATION. IT WAS CONTENDED THAT THE FINDI NG GIVEN IN PARA 4.1 AT PAGE 6-7 IS WRONG APPLICATION OF LAW. THE LEARNED CIT(A) HAS CONFIRMED SHORT DEDUCTION FOR WRO NG FURNISHING OF PAN IN TDS RETURN (THAT TOO DUE TO TY POGRAPHICAL MISTAKE ON THE PART OF THE BANK DUE TO VOLUME OF EN TRIES TO BE MADE) WHEREAS SECTION 206AA IS APPLICABLE FOR NOT HA VING PAN. IT WAS ALSO SUBMITTED THAT PRAFULL KUMAR JAIN I S OLD ASSESSEE AND IS FILING REGULAR INCOME TAX RETURNS A ND HAVE FILED THE RETURN OF THE CONCERNED ASSESSMENT YEAR I .E. 2013-14. THUS, IT IS NOT A CASE THAT PAN WAS NOT AVAILABLE AT THE TIME OF DEDUCTION OF TDS AND WAS OBTAINED LATER ON. IT WAS AL SO SUBMITTED THAT THE ASSESSEE DULY SUBMITTED ITS REVI SED RETURN ON 8.6.2013 WHEREIN THE CORRECT PAN WAS MENTIONED. CO PY OF RELEVANT PAGES OF THE REVISED TDS RETURN ARE PLACED AT ANNEXURE B-1 TO B-2. THE LEARNED COUNSEL FOR THE AS SESSEE PLACED RELIANCE ON THE DECISION IN THE CASE OF ONGC LTD., ITA NOS.1984 TO 1986/AHD/2016 DATED 22.9.2015, CIT VS. SUPERINTENDENT OF POLICE (2012) 349 ITR 0550) (P&H) WHEREIN IT WAS HELD THAT DEFAULT IS ONLY WITH REGARD TO WRONG QUOTING OF STATE BANK OF PATIYALA,UJJAIN I.T.A.NO. 211/IND/2 016 A.Y. 2013-14 ( QTR.3) PAGE 5 OF 7 5 PANS OF 196 DEDUCTEES, SUCH DEDUCTEES QUOTED WRONG PAN. HOWEVER, CORRECT PAN WAS GIVEN AS SOON AS THE DEFAU LT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE. HENCE, PENAL TY ON THE GROUND THAT THE ASSESSEE DEDUCTED TDS CORRECTLY AND REVISED RETURN WAS FILED CORRECTLY IN COMPLIANCE WITH THE STA TUTORY PROVISIONS, THERE WAS SUFFICIENT COMPLIANCE OF PROVI SIONS OF SECTION 139A REGARDING PAN. THE LEARNED COUNSEL FO R THE ASSESSEE ALSO RELIED UPON THE CASE OF VIJAY SIDDHRA J BASHTE; (2014) 66 SOT 0068 (PUNE). THE LEARNED COUNSEL FOR THE ASSESSEE ALSO TOOK SHELTER UNDER CIRCULAR NO. 75/20 10 OF CBDT WHICH SAYS THAT NON-QUOTING OF PAN BY THE DEDUC TEE IS CREATING PROBLEMS IN PROCESSING OF RETURNS OF INCOM E AND IN GRANTING CREDIT FOR TAX DEDUCTED AT SOURCE LEADING TO DELAY IN ISSUING THE REFUNDS. 6. ON THE OTHER HAND, THE LEARNED SR. DR RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES. IT IS THE CASE OF THE REVENUE THAT THE ASSESSEE HAS NOT FURNISHED CORRECT PAN OF SHRI PRAFULL KUMAR JAIN, P AN MENTIONED IN THE ORIGINAL TDS RETURN IN RESPECT OF THE ABOVE STATE BANK OF PATIYALA,UJJAIN I.T.A.NO. 211/IND/2 016 A.Y. 2013-14 ( QTR.3) PAGE 6 OF 7 6 DEDUCTEE WAS NOT VALID/CORRECT. THEREFORE, THE ASSE SSING OFFICER WAS JUSTIFIED IN ADOPTING THE TDS RATE OF 20 % AS AGAINST 10%. HOWEVER, IT IS SEEN THAT THE ASSESSEE HAS FILED THE REVISED TDS RETURN BY QUOTING THE CORRECT PAN WH ICH WAS ACCEPTED BY THE DEPARTMENT. WE FIND THAT IT IS NOT A CASE THAT PAN OF PAYEES AVAILABLE WITH THE ASSESSEE WAS NOT CO RRECT BUT THIS IS A CASE WHERE DUE TO TYPOGRAPHICAL ERROR OR M UCH VOLUME OF ENTRIES IN TDS RETURN, WRONG PAN OF ONLY ONE PAYEE WAS MENTIONED IN THE ORIGINAL TDS RETURN THOUGH THE PAYEE APPEARS TO HAVE SUPPLIED CORRECT PAN TO THE ASSESSE E. SIMILARLY, SHRI PRAFULL KUMAR JAIN IS OLD ASSESSEE. THEREFORE, IT IS A CLERICAL AND TYPOGRAPHICAL ERROR WHILE FEEDING DATA IN TDS RETURN WHICH LED TO WRONG APPLICATION OF TAX RATE OF 20% IN THE CASE OF ONE DEDUCTEE WHEREAS THE ASSESSEE MIGHT HAVE PAID INTEREST TO A LARGE NUMBER OF PERSONS, THE ASSESSEE BEING A PUBLIC SECTOR BANK. SINCE THE MISTAKE OF QUOTING WR ONG PAN HAS BEEN RECTIFIED IN THE REVISED TDS RETURN FILED BY THE ASSESSEE WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT, THEREFORE, THERE IS NO JUSTIFICATION IN RAISING A D EMAND ON ACCOUNT OF SHORT DEDUCTION OF TDS. THE CASE LAWS CIT ED (SUPRA) STATE BANK OF PATIYALA,UJJAIN I.T.A.NO. 211/IND/2 016 A.Y. 2013-14 ( QTR.3) PAGE 7 OF 7 7 AS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSES SEE ALSO SUPPORT THE CASE OF THE ASSESSEE. CONSIDERING THE F ACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADOPTING THE RATE OF 20% AS AGAINST 10%. WE, THEREFORE, DELETE THE DEMAND OF RS. 8,780/- AND INTEREST THEREON OF RS. 1,025/- AS MADE BY THE AUTHORITIES BELOW. 8. IN THE RESULT, THE APPEAL OF THE ASSESSE E IS ALLOWED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 18 TH AUGUST, 2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED :18 TH AUGUST, 2016. CPU* COPY OF THE ORDER FORWARDED TO : THE ASSESSEE/ PCIT- INDORE/ CIT(A)-I, INDORE, AO/ D R- INDORE BENCH/ GUARD FILE BY ORDER ASSISTANT REGISTRAR OF ITAT, INDORE BENCH