State Bank of India, sme Branch., Belagavi V. The Income Tax Officer (TDS), Ward-1, Belagavi., Belagavi

ITA 290/PAN/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7531 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 13-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAVIRAJ Y V LD
• Assessee Lawyers: SHIVPRASAD S PARNATTI
• Keywords: Charitable institution; Principle of natural justice; Bonafide belief; Reasonable cause; Benefit of exemption; Condonation of delay
• Section: 234B; 80G; 12A; 12AA; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI SINGLE MEMBER CASE BEFORE SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 290 /P A N/201 6 (ASST. YEAR : 201 4 1 5 ) STATE BANK OF INDIA SME BRANCH, CONGRESS ROAD , TILAKWADI BELAGAVI 590 00 6 V. THE INCOME - TAX OFFICER (TDS) FK COMMERCIAL COMPLEX, OPP.DISTRICT HOSPITAL, DR B.R. AMBEDKAR ROAD, BELAGAVI 59 0 001 PAN NO. AA ACS 8577 K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHIVPRASAD S PARNATTI CA . DEPARTMENT BY : SHRI RAVIRAJ Y.V . LD. DR DATE OF HEARING : 1 7 /02/2017 DATE OF PRONOUNCEMENT : 1 7 /02/2017 . O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER 1 . THE APPEAL ITA NO. 290/ PAN/2016 IS FILED BY THE ASSESSEE STATE BANK OF INDIA, SME BRANCH, BELAGAVI AGAINST THE ORDER OF LEARNED CIT( A) BELAGAVI IN APPEAL NO . ITA NO. 5 82 /BGM/2014 15 DATED 2 9 /0 8/2016 FOR THE ASSESSMENT YEAR 2014 15 . 2 . IT WAS THE SUBMISSION THAT THE APPEAL IS FILED AGAINST THE CONFIRMATION OF THE LEVY OF INTEREST UNDER SECTION 201(1A) OF THE ACT. SHRI RAVIRAJ REPRESENTED ON BEHALF OF THE REVENUE AND SHRI SHIVPRASAD S PARNATTI, CA REPRESENTED ON BEHALF OF THE ASSESSEE. 3 . IT WAS SUBMITTED BY THE LEARNED AR THAT THERE I S A DELAY OF 24 DAYS , AS THESE APPEALS WERE FILED AFTER GETTING THE DEFECT MEMO FROM THE TRIBUNAL. THE ASSESSEE HAS GIVEN THE NECESSARY REASONS FOR THE ITA.NO. 290 /PAN/2016 STATE BANK OF INDIA, SME BRANCH, BELAGAVI 2 CONDONATION OF DELAY AND THE DELAY IS FOUND TO BE ON ACCOUNT OF REASONABLE CAUSE. THE LEARNED DR HAS N OT RAISED ANY SERIOUS OBJECTION TO THE CONDONATION OF DELAY. CONSEQUENTLY THE DELAY IN FILING ALL THESE APPEALS STANDS CONDONED AND THE APPEALS ARE DISPOSED OF ON MERITS. 4 . IT WAS SUBMITTED BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT M/S VISHVESHVARAYA TECHNOLOGICAL UNIVERSITY (HEREINAFTER IN SHORT VTU) BEING AN UNIVERSITY ESTA BLISHED IN 1998 TH ROUGH THE STATUTE OF THE KARNATAKA GOVERNMENT HAD MAINTAINED CERTAIN DEPOSITS WITH THE ASSESSEE BANK AND ITS OTHER BRANCHES. IT WAS SUBMITTED THAT VTU WAS NOT FILLING ITS RETURN OF INCOME AND WAS NOT PAYING ANY TAX IN SO FAR AS IT WAS CLAIMING EXEMPTION UNDER SECTION 10(23) OF THE ACT . DURING THE YEAR 2011 THE ASSESSMENT S OF VTU WAS REOPENED FOR THE ASSESSMENT YEARS 2004 05 TO 2009 10 WHEREIN IT WAS HELD THAT IT WA S NOT ENTITLED TO BENEFIT OF EXEMPTION UNDER SECTION 10 (23C) OF THE ACT. THE MATTER WAS CARRIED BY V TU TILL THE HONBLE SUPREME COURT AND IN 2016 THE HONBLE SUPREME COURT HAD UPH E LD THE FINDING THAT VTU WAS NOT ELIGIBLE FOR THE EXEMPTION UNDER SECTION 10(23 C) OF THE ACT. FOR THE ASSESSMENT YEAR 2016 - 17 VTU APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT AND THE SAME WAS GRA N TED THE REGISTRATION AS A CHARITABLE TRUST / SOCIETY . CONSEQUEN TLY VTU HAD FILED AN APPLICATION UNDER SECTION 119(2)(B) OF THE ACT TO THE CBDT PRAYING FOR RETROSPECTIVE RECOGNITION OF THE REGISTRATION UNDER SECTION 12AA OF THE ACT. VTU HAD BEEN GRANTED THE REGISTRATION UNDER SECTION 12A A AND 80G VIDE ORDER DATED 08.12.2015. THE APPLICATION BEFORE THE CBDT IS PENDING TILL DATE. 5 . IT WAS SUBMITTED THAT CONSEQUENT TO VTU BEING DENIED THE EXEMPTION UNDER SECTION 10(23 C) OF THE ACT, T HE ASSESSEES WERE HELD LIABLE UNDER SECTION 201 (1) AND 201(A) OF THE ACT ON ACCOUNT OF THE NON DEDUCTION OF TDS UNDER SECTION 194A ( 3) IN RESPECT OF THE INTEREST ON THE DEPOSITS . IT WAS A SUBMISSION THAT VTU HAS PAID THE 100% OF THE TAX LIABILITY AND FOR THOSE ASSESSMENT YEARS THE LEARNED CIT( A) HAD DELETED ITA.NO. 290 /PAN/2016 STATE BANK OF INDIA, SME BRANCH, BELAGAVI 3 THE LIABILITY UNDER SECTION 201(1) BY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COC A COLA BEVERAGE (P) LTD. V. CIT 293 ITR 0226 . FURTHER IT WAS SUBMITTED BY THE LEARNED AR THAT THE IMPACT BY THE FILING OF THE CERTIFICATE AS ISSUED BY THE DEDUCTEE IN FORM 26A WAS ALSO LIABLE TO BE CONSIDERED. IT WAS SUBMISSION THAT WHERE VTU HAD NOT PAID THE 100% TAX THE CIT(A) HAD UPH E LD THE LEVY UNDER SECTION 201 (1) . IT WAS FURTHER SUBMITTED THAT THE INTEREST LEVIED UNDER SECTION 201(1A) HAD BEEN CONFIRMED BY THE LEARNED CIT(A) FOR ALL THE ASSESSMENT YEARS. IT WAS A SUBMISSION THAT THE ASSESSEE WAS UNDER THE BONAFIDE BELIEF THAT TDS WAS NOT REQUIRED TO BE DONE AND IN FACT THE ASSE SS EE HAD ALSO BEEN GIVEN THE FORM 26A BY M/S VTU FOR THE NON DEDUCTION OF TAX. IT WAS FURTHER SUBMIT TED THAT VTU HAS PAID NOT ONLY THE TAX BUT ALSO THE INTEREST IN RESPECT OF THE TAX LIABILITY. IT WAS SUBMITTED THAT THE INTEREST UNDER SECTION 201(1 A) WAS COMPENS ATORY IN NATURE AND M/S VTU HAVING ALREADY PAID THE INTEREST ON THE TAX LIABILITY , T HE LEVY OF INTEREST ON THE ASSESSEE BANK WAS LIABLE TO BE DELETED. 6 . IN REPLY THE LEARNED DR SUBMITTED THAT FOR THE ASSESSMENT YEARS 2013 14, 2014 15, 2015 16 THE TAX HAVING NOT BEEN PAID IN ITS ENTIRETY BY M/S VTU, T HE ASSE SSEE WAS LIABLE AS AN ASSESSEE IN DEFAULT IN RESPECT OF THE LEVY UNDER SECTION 201(1 ) OF THE ACT. IT WAS FURTHER SUBMITTED THAT IN RESPECT OF THE LEVY OF INTEREST UNDER SECTION 201(1A) THE INTEREST IS COMPENSATORY IN NATURE AS HAS BEEN HELD BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE (P) LTD. REFER TO (SUPRA). IT WAS SUBMITTED THAT THE BONAFIDE BELIEF COULD NOT REMOVE THE LIABILITY FOR PAYMENT OF INTEREST UNDER SECTION 201(1A) OF THE A CT. IN REGARD TO THE QUANTIFICATION OF LEVY OF INTEREST UNDER SECTION 201(1A) THE ISSUE COULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER TO RE - ADJU DI CATE THE ISSUE AFTER CONSIDERING THE FACT WITH FORM 26A. 7 . IN REPLY LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HE HAD NO OBJECTION IN RESTORING THE ISSUES TO THE FILE OF ITA.NO. 290 /PAN/2016 STATE BANK OF INDIA, SME BRANCH, BELAGAVI 4 THE ASSESSING OFFICER FOR RE - ADJUDICATION IN RESPECT OF LEVY UNDER SECTION 201(1). IT WAS ALSO SUBMITTED THE LEVY OF INTEREST UNDER SECTION 201(1A) MUST ALSO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER , I N SO FAR AS THE COMPUTATION OF THE INTEREST HAS BEEN WRONGLY DONE . AS PER THE PROVISO OF THE SECTION 201(1A) THE SAME WAS L EVYABLE ONLY FROM THE DATE FROM WHICH THE TAX WAS DEDUCTABLE T O THE DATE OF F U R NISHING OF RETURN OF INCOME BEING THE DUE D ATE FOR THE FILING OF THE RETUR N UNDER SECTION 139(1) OF THE ACT. LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY SERIOUS OBJECTION. 8 . I HAVE HEARD THE RIVAL SUBMISSIONS. FACTS IN THE PRESENT CASE CLEARLY SHOW THAT M/S VTU HAS FILED AN APPLICATION FOR RETROSPECTIVE RE COGNITION UNDER SECTION 12AA OF THE ACT TO THE CBDT UNDER SECTION 119(2B) OF THE ACT. IN THE EVENT THE CBDT ACCEPTS THE C LAIM OF THE ASSESSEE , THEN THE LIABILITY OF THE ASSESSEE UNDER SECTION 201(1) AND 201(1A) OF THE ACT WOULD EF FACE. THIS BEING SO IN THE INTEREST OF NATURAL JUSTICE THE ISSUE S IN THESE APPEAL ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH THE FOLLOW ING DIRECTIONS: - THE LEARNED ASSESSING OFFICER IS TO AWAIT THE DECISION OF THE CBDT IN RESPECT OF THE PETITION FILED BY THE VTU IN RESPECT OF THE RETROSP ECTIVE GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. IN THE EVENT THE APPLICATION FILED BY THE VTU IS NOT CONSIDERED FAVOURABLY BY THE CBDT THEN I N RESPECT OF LEVY OF INTEREST UNDER SECTION 201(1A) OF THE ACT THE INTEREST IS TO BE COMPUTED FOR THE PERIOD FROM THE DATE FROM WHICH THE TAX WAS DEDUCTABLE TO THE DATE OF FILING OF THE RETURN BY THE DEDUCTEE (VTU). THIS IS BECAUSE ONCE ANY INCOME IS LIABLE FOR TDS THEN IN THE HANDS OF THE DEDUCTEE NO INTEREST UNDER SECTION 234A, 234B & 234C CAN BE LEVIED IN RES PECT OF SUCH INCOME. THEREFORE TILL SUCH INCOME IS DISCLOSED BY THE DEDUCTEE IN ITS RETURN THE LIABILITY OF THE TAX RESTS ON THE DEDUCTOR. ONCE THE DEDUCTEE HAS FILED HIS RETURN DISCLOSING SUCH INCOME THEN FOR SUCH RETURN TO BECOME VALID THE TAXES OF SUC H RETURN SHOULD HAVE BEEN PAID ITA.NO. 290 /PAN/2016 STATE BANK OF INDIA, SME BRANCH, BELAGAVI 5 AND THE LIABILITY IN RESPECT OF SUCH TAXES AND THE CREDIT FOR SUCH TAXES GOES TO THE DEDUCTEE ONLY. 9 . IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON FRI DAY , THE 1 7 TH DAY OF FEBRUARY, 2017 AT GOA. SD/ - (GEORGE MATHAN) JUDICIAL MEMBER DATED : 1 7 TH FEBRUARY, 2017. VSSGB / - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A), 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI