RBL Bank Limited (Formerly known as Ratnakar Bank Limited), Belgaum V. The Income Tax Officer,TDS Ward-1, Panaji., Belgaum

ITA 330/PAN/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2236 (ITAT-PANAJI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-11-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 10-08-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KESHAV M DIXIT
• Assessee Lawyers: S V PADHYE
• Keywords: Additional evidence
• Section: 133(6); 201(1); 148; 12; 2; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO S . 329 TO 331 /PNJ/201 5 (ASST. YEAR S : 20 11 - 1 2 TO 2013 - 14 ) RBL BANK LIMITED , (FORMERLY KNOWN AS RATNAKAR BANK LTD.) , BHARATI 39/1, CLUB ROAD BRANCH, BELGAUM. VS. ITO (TDS), WARD - 1, BELGAUM. PAN NO. AABCT 3335 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.V. PADHYE C A DEPARTMENT BY : SHRI KESHAV M. DIXIT - D R DATE OF HEARING : 24 / 1 1 /2015 . DATE OF PRONOUNCEMENT : 24 / 1 1 /201 5 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER TH E S E ARE THE APPEAL S FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) , BELGAUM , EACH DATED 15 /0 6 /201 5 PASSED IN ASSESSMENT YEARS 2011 - 12, 2012 - 13 & 2013 - 14. 2. THE COMMON ISSUE INVOLVED IN ALL THE YEARS UNDER CONSIDERATION IS TH A T THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER HOLDING THE ASSESSEE BANK AS A SSESSEE I N D EFAULT UNDER SEC. 201(1) AND RA I SING DEMAND OF 2,38,735/ - IN THE ASSESSMENT YEAR 2011 - 12, 2,81,260/ - IN THE ASSESSMENT YEAR 2012 - 13 AND 3,11,602/ - IN THE ASSESSMENT YEAR 2013 - 14 INCLUDING INTEREST UNDER SEC. 201(1A) OF THE ACT. 2 ITA NO S . 329 - 331 /PNJ/201 5 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A BANKING COMPANY ENGAGED IN THE BUSINESS OF BANKING . ON VERIFICATION OF INFORMATION OBTAINED UNDER SEC. 133(6) OF THE INCOME TAX ACT, 1961 , THE ITO (TDS), WARD - 1, BELAGAVI FOUND THAT DURING THE YEARS UNDER CONSIDERATION, THE ASSESSEE HAS PAID AN INTEREST OF 16,24,072/ - IN THE ASSESSMENT YEAR 2011 - 12, 20,83,546/ - IN THE ASSESSMENT YEAR 2012 - 13 & 25,33,431/ - IN THE ASSESSMENT YEAR 2013 - 14 WHICH I S IN EXCESS OF 10,000/ - AND HENCE, THE ASSESSEE BANK SHOULD HAVE DEDUCTED TAX AT SOURCE IN ACCORDANCE WITH THE PROVISIONS OF SEC. 194A(3)(I)(B) OF THE ACT @ 10%, WHICH IT HAD FAILED TO COMPLY WITH . THE ASSESSEE CONTENDED BEFORE THE ASSESSING OFFICER THAT TAX WAS NOT DEDUCTED IN RESPECT OF PAYMENT TO VISVESVARAYA TECHNOLOGICAL UNIVERSITY AS IT WAS EXISTING SOLELY FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT AND WHOLLY AND SUBSTANTIAL FINA N C ED BY THE GOVERNMENT AND IS EXEMPT FROM INCOME TAX UNDER THE PROVISIONS OF SEC. 10(23)(IIIAB) OF THE ACT AND THEREFORE, NO LIABILITY TO TAX AROSE AND NO TAX WAS DEDUCTIBLE UNDER SEC. 194A. THE ASSESSEE ALSO PRODUCED BEFORE THE ASSESSING OFFICER A LETTER OF VISVESVARAYA TECHNOLOGICAL UNIVERSITY BEARING NO. VTU/REGISTERED./IT/2014/997 DATED 03/09/2014 WHEREIN IT WAS MENTIONED THAT VISVESVARAYA TECHNOLOGICAL UNIVERSITY IS EXEMPTED FROM FILING THE RETURN S UNDER SEC. 139 OF THE INCOME TAX ACT, 1961 AS ITS INCOME WAS EXEMPT UNDER SEC. 10(23)(IIIAB) OF THE INCOME TAX ACT, 1961 AND IT HAD REQUESTED THE ASSESSEE BANK NOT TO DEDUCT TAX FROM DEPOSITS . 4 . THE ASSESSING OFFICER OBSERVED IN HIS ORDER THAT HONBLE KARNATAKA HIGH COURT, DH ARWAD BENCH VIDE ITS ORDER DATED 20/12/2013 IN THE CASE OF VISVESVARAYA TECHNOLOGICAL UNIVERSITY VS. ACIT (2014) 362 ITR 279 (KARN.) UPHOLDING THE ORDER OF THE TRIBUNAL , HAS CATEGORICALLY STATED THAT VISVESVARAYA TECHNOLOGICAL UNIVERSITY WAS NOT ENTITLED TO EXEMPT UNDER SEC. 10(23)(IIIAB) OF THE INCOME TAX ACT, 1961 . ACCORDING TO THE ASSESSING OFFICER, AS THE HONBLE HIGH COURT HAS 3 ITA NO S . 329 - 331 /PNJ/201 5 HELD THAT INCOME OF VISVESVARAYA TECHNOLOGICAL UNIVERSITY WAS NOT EXEMPT UNDER SEC. 10(23)(IIIAB) OF THE AC T THE CLAIM OF THE DEDUCTOR WAS NOT IN ORDER. THE ASSESSING OFFICER FURTHER OBSERVED THAT VISVESVARAYA TECHNOLOGICAL UNIVERSITY HAS NEITHER FURNISHED TO THE ASSESSEE A CERTIFICATE FROM THE INCOME TAX DEPARTMENT FOR LOW DEDUCTION /NO DEDUCTION OF TAX IN RESPECT OF VISVESVARAYA TECHNOLOGICAL UNIVERSITY NOR FORM NO. 15G AND THEREFORE, HE HELD THAT THE ASSESSEE BANK WAS UNDER STATUTORY OBLIGATION TO DEDUCT TAX FROM INTEREST PAID ON TERM DEPOSIT S TO VISVESVARAYA TECHNOLOGICAL UNIVERSIT Y AND THE ASSESSING OFFICER BY PASSING AN ORDER UNDER SEC. 201(1) AND 201(1A) , DETERMINED THE AMOUNT S PAYABLE UNDER SEC. 201(1)/(1A) AMOUNTING TO 1,62,407/ - AND 76,328/ - RESPECTIVELY, TOTALLING TO 2,38,735/ - IN THE ASSESSMENT YEAR 2011 - 12 ; 2,08,355/ - AND 72,905/ - RESPECTIVELY, TOTALLING TO 2,81,260/ - IN THE ASSESSMENT YEAR 2012 - 13 AND 2,53,343/ - AND 58,259/ - RESPECTIVELY, TOTALLING TO 3,11,602/ - IN THE ASSESSMENT YEAR 2013 - 14 . 5. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND ARGUED THAT W.E.F. 01/07/2012, A PERSON WHO HAS NOT DEDUCTED TDS WILL NOT BE DEEMED TO BE A PERSON IN DEFAULT IF HE FURNISHES A CERTIFICATE TO THE EFFECT THAT THE PERSON IN RESPECT OF WHOM DEDUCTION WAS NOT MADE HAS FURNISHED HIS RETURN OF INCOME UNDER SEC. 139, HAS TAKEN INTO ACCOUNT SUCH SUM FOR COMPUTING INCOME IN SUCH RETURN OF INCOME AND HAS PAID THE TAX DUE ON THE INCOME DECLARED BY HIM IN SUCH RETURN OF INCO ME AND THE PERSON FURNISHES A CERTIFICATE TO THIS EFFECT IN FORM 26A . THE ASSESSEE SUBMITTED THAT VISVESVARAYA TECHNOLOGICAL UNIVERSITY HAS CONFIRMED THAT THEY HAVE FILED THE RETURN OF INCOME AND HAS PROVIDED FORM 26A WHICH WAS FILED BEFORE THE COMMISSION ER OF INCOME TAX (APPEALS). 6 . THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE PROVISO TO SEC. 201(1) 4 ITA NO S . 329 - 331 /PNJ/201 5 PROVIDES FOR FOUR CONDITIONS WHICH NEED TO BE SATISFIED FOR CLAIMING RELIEF UNDER THESE PROVISIONS. IN THE CASE OF THE ASSESSEE, NO RETURN OF INCOME FOR THE ASSESSMENT YEARS UNDER CONSIDERATION WAS FILED BY VISVESVARAYA TECHNOLOGICAL UNIVERSITY UNDER SEC. 139 OF THE ACT, BUT WAS SUBSEQUENTLY FILED , IN RESPONSE TO NOTICE UNDER SEC. 14 8 OF THE ACT. FURTHER, THE INCOME SHOWN IN THE RETURN IS NIL AND HENCE, VISVESVARAYA TECHNOLOGICAL UNIVERSITY HAD NOT TAKEN INTO ACCOUNT THE S U M FOR COMPUTING ITS INCOME FOR THE RELEVANT ASSESSMENT YEARS . NO TAX ES HAD BEEN PAID BY THE DEDUCTEE EVEN WHILE F ILING ITS RETURN IN RESPONSE TO NOTICE UNDER SEC. 148. NO CERTIFICATE WAS FURNISHED FROM THE CHARTERED ACCOUNTANT IN FORM NO. 2 6A DURING THE INITI AL STAGE OF THE PROCEEDINGS. THEREFORE, COMMISSIONER OF INCOME TAX (APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE. 7 . BEFORE US, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE IN THE FORM OF FORM NO. 26A FOR A LL THE ASSESSMENT YEARS UNDER CONSIDERATION. IT WAS SUBMITTED THAT ORIGINALLY FORM NO. 26A SIGNED BY THE REGISTRAR OF VISVESVARAYA TECHNOLOGICAL UNIVERSITY INSTEAD OF CHARTERED ACCOUNTANT WAS FILED AND THEREAFTER REALIZING THE MISTAKE, THE ASSESSEE HAS OB TAINED THE REQUIRED FORM 26A SIGNED BY THE CHARTERED ACCOUNTANT. HENCE, IT WAS THE PRAYER TO ADMIT THE ADDITIONAL EVIDENCE. FURTHER, IT WAS SUBMITTED THAT THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COL A BEVERAGE P. LTD. VS CIT REPORTED IN (2007) 293 ITR 226 (SC) HAS HELD THAT SINCE THE ASSESSEE HAD PAID INTEREST UNDER SEC. 201(1A) AND THERE WAS NO DISPUTE THAT THE TAX DUE HAD BEEN PAID BY THE DEDUCTEE , THE APPE LLATE TRIBUNAL CAME TO THE RIGHT CONCLUSION THAT THE TAX COULD NOT BE RECOVERED O NCE AGAIN FROM THE ASSESSEE. IT WAS THE SUBMISSION THAT AS THE VISVESVARAYA TECHNOLOGICAL UNIVERSITY , TO WHOM THE INTEREST WAS PAID BY THE BANK , HAD FILED ITS RETURN OF INCOME AND PAID TAX THEREON , T HE ASSESSEE WAS NO T LIABLE UNDER SEC. 201(1) OF THE ACT. 5 ITA NO S . 329 - 331 /PNJ/201 5 8 . ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD . I N THE INSTANT CASE, THE U NDISPUTED FACTS ARE THAT THE ASSESSEE BANK HAS PAID INTEREST ON TERM DEPOSIT S OF 16,24,072/ - IN THE ASSESSMENT YEAR 2011 - 12, 20,83,546/ - IN THE ASSESSMENT YEAR 2012 - 13 & 25,33,431/ - IN THE ASSESSMENT YEAR 2013 - 14 WITHOUT DEDUCTING TDS THEREON TO VISVESVARAYA TECHNOLOGICAL UNIVERSITY . AS THE TOTAL PAYMENT OF INTEREST EXCEEDED TO 10,000/ - DURING THE YEAR , T HEREFORE, THE ASSESSING OFFICER TREATED THE ASSESSEE AS ASSESSEE IN DEFAULT UNDER SEC. 201(1)/(1A) FOR FAILURE TO DEDUCT TDS UNDER SEC. 194A OF THE ACT AND HELD THE ASSESSEE LIABLE FOR 2,38,735/ - IN THE ASSESSMENT YEAR 2011 - 12, 2,81,260/ - IN THE ASSE SSMENT YEAR 2012 - 13 AND 3,11,602/ - IN THE ASSESSMENT YEAR 2013 - 14 . 10. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 11. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS NOW FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE IN THE FORM OF FORM 26A ON THE GR O UND THAT EARLIER FORM 26A FOR THE YEARS UNDER APPEAL WAS SIGNED BY THE REGISTRAR OF THE VISVESVARAYA TECHNOLOGICAL UNIVERSITY WAS FILED BY MISTAKE BY THE ASSESSEE AND THAT FRESH FORM 26A H AS BEEN FILED DULY CERTIFIED BY THE CHARTERED ACCOUNTANT. FURTHER, IT WAS ALSO THE SUBMISSION THAT THE AS THE DEDUCTEE VISVESVARAYA TECHNOLOGICAL UNIVERSITY HAS PAID TAXES ON THE INTEREST INCOME BY FILING ITS RETURN OF INCOME, THE ASSESSEE WAS NOT LIABLE UNDER SEC. 201(1) IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE P. LTD. (SUPRA) . 6 ITA NO S . 329 - 331 /PNJ/201 5 1 2 . THE CONTENTION OF THE DEPARTMENTAL REPRESENTATIVE BEFORE US IS THAT AS THE FORM NO. 26A IS FILED BY THE ASSESSEE AS ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL, THE TRIBUNAL SHOULD RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR HIS VERIFICATION AND ADJUDICATION THEREUPON. THE DEPARTMENTAL REPRESENTATIVE ALSO POINTED OUT THAT VISVESVARAYA TECHNOLOGICAL UNIVERSITY IN ITS RETURN OF INCOME CLAIMED ENTIRE INCOME AS EXEMPT UNDER SEC. 10(23) INCLUDING THE AMOUNT OF INTEREST INCOME IN QUESTION AND, THEREFORE, NO TAX WAS PAID BY VISVESVARAYA TECHNOLOGICAL UNIVERSITY AND THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR BENEFIT OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE P. LTD. (SUPRA) . 13 . WE FIND THAT IT IS NOT IN DISPUTE THAT THE RECIPIENT OF INTEREST INCOME I.E. VISVESVARAYA TECHNOLOGICAL UNIVERSITY HAS FILED ITS RETURN OF INCOME AND HAS INCLUD ED THE INTEREST PAID BY THE ASSESSEE AS ITS INCOME IN THE SAID RETURN OF INCOME. AS PER SEC. 4 OF THE INCOME TAX ACT, IT IS THE RECIPIENT OF INTEREST WHO IS LIABLE TO PAY TAX . T HE MACHINERY OF TDS PR OVISIONS MADE IN STATUTE IS TO FACILITATE THE COLLECTION OF THAT TAX WHICH IS THE PRINCIPALLY PAYABLE BY THE RECIPIENT OF THE INCOME . T HE TDS IS NOT A SEPARATE OR INDEPENDENT TAX. ONCE THE RECIPIENT OF THE INCOME HAS INCLUDED, THE INCOME PAID BY THE PAYER AND DISCLOSED THE SAME TO THE DEPARTMENT AND PAID TAX THEREON AS PER COMPUTATION MADE BY THE RECIPIENT OR NO TAX WAS PAID BY THE RECIPIENT OF INCOME BECAUSE AS PER THE RECIPIENT , ITS ENTIRE INCOME IS EXEMPT OR ON WHICH NO TAX IS PAYABLE , THEN THE INCOME IS DISCLOSED TO THE DEPARTMENT BY THE PRINCIPAL PERSON WHO IS LIABLE TO PAY TAX THEREON AND IN SUCH CASES, UNLESS IT CAN BE SHOWN THAT THE DUE TAX COULD NOT BE RECOVERED BY THE DEPARTMENT FROM THE PRINCIPAL PERSON, WHO WAS LIABLE TO TDS UNTIL TH EN THE PAYER OF THE INCOME CANNOT BE TREATED AS ASSESSEE IN DEFAULT . 14. WE FIND THAT NO MATERIAL HAS BEEN BROUGHT BEFORE US TO SHOW THAT IN PURSUANCE TO ANY ASSESSMENT MADE IN THE CASE OF VISVESVARAYA 7 ITA NO S . 329 - 331 /PNJ/201 5 TECHNOLOGICAL UNIVERSITY ANY TAX WAS DETERMINED BY THE DEPARTMENT AS PAYABLE BY VISVESVARAYA TECHNOLOGICAL UNIVERSITY AND WHICH HAD BECOME UNRECOVERABLE FROM VISVESVARAYA TECHNOLOGICAL UNIVERSITY. HOWEVER, WE FIND FORCE IN THE ARGUMENT OF THE DEPARTMENTAL REPRESENTATIVE , THE ISSU E REQUIRES TO BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN FORM 26A AND THEREAFTER ADJUDICATE AFRESH AFTER TAKING INTO CONSIDERATION THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGE P. LTD. (SUPRA) AND THE OBSERVATIONS MADE HEREINABOVE AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE FOR ALL THE YEARS UNDER APPEAL . 1 5. IN THE RESULT, ALL THE APPEAL S OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON WEDNESDAY , THE 24 TH DAY OF NOVEMBER , 201 5 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24 TH NOVEMBER , 201 5 . VR/ - 8 ITA NO S . 329 - 331 /PNJ/201 5 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 9 ITA NO S . 329 - 331 /PNJ/201 5 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 24 . 1 1 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 24 . 1 1 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 26 / 1 1 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 26 / 1 1 /2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 26 / 1 1 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 24 / 1 1 /2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 26 / 1 1 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER