Appeal details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 8990 (ITAT-VISAKHAPATNAM)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 22 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
07-04-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2012-2013
Appeal Filed On
15-11-2016
Judgement Text
ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.444/VIZAG/2016 ( / ASSESSMENT YEAR: 2012-13) STATE BANK OF INDIA, REP. BY ITS CHIEF MANAGER SHRI A. SATISH BABU, ONGOLE ITO(TDS), WARD - 3(3), GUNTUR [PAN NO. AAACS8577K ] ( % / APPELLANT) ( &'% / RESPONDENT) S.P.NO.12/VIZAG/2016 (ARISING OUT OF I.T.A.NO.444/VIZAG/2016) ( / ASSESSMENT YEAR: 2012-13) STATE BANK OF INDIA, REP. BY ITS CHIEF MANAGER SHRI A. SATISH BABU, ONGOLE ITO(TDS), WARD - 3(3), GUNTUR ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI A.V. RAGHURAM, AR / RESPONDENT BY : SHRI M. BHUPAL REDDY & SHRI T. SATYANANDAM, DRS / DATE OF HEARING : 10.03.2017 / DATE OF PRONOUNCEMENT : 07.04.2017 ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 2 / O R D E R PER SHRI MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE CIT(A)-2, GUNTUR DATED 8.9.2016 AND IT PERTAINS TO THE ASSESSMENT YEAR 2012-13. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PUBLIC SECTOR BANK. A SURVEY OPERATION U/S 133A OF THE INCOME TA X ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WAS CONDUCTED ON 24.3.2012 IN THE OFFICE PREMISES OF CHIEF MANAGER, STATE BANK OF INDIA, TOW N BRANCH, ONGOLE, PRAKASAM DISTRICT TO VERIFY THE TDS COMPLIANCES. D URING THE COURSE OF SURVEY, IT WAS NOTICED THAT THE ASSESSEE WAS NOT FI LING QUARTERLY TDS STATEMENTS REGULARLY FOR THE FINANCIAL YEARS 2008-0 9 TO 2011-12. IT WAS FURTHER OBSERVED THAT THE ASSESSEE HAS REMITTED TAX DEDUCTED AT SOURCE INTO THE CENTRAL GOVERNMENT ACCOUNT BELATEDLY. CON SEQUENT TO SURVEY, PROCEEDINGS HAS BEEN INITIATED U/S 201(1) OF THE AC T. DURING THE COURSE OF PROCEEDINGS, THE ASSESSING OFFICER REQUESTED THE ASSESSEE TO FURNISH COMPLETE DETAILS OF DEPOSITS, MONTHWISE INTEREST PA YMENTS TO DEPOSITORS AND PARTICULARS OF TAX DEDUCTED AT SOURCE INCLUDING PAYMENT OF TDS INTO ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 3 THE CENTRAL GOVERNMENT ACCOUNT. IN RESPONSE, THE A SSESSEE HAS FILED NECESSARY DETAILS. 3. THE A.O. OBSERVED THAT ON VERIFICATION OF INFORM ATION FURNISHED BY THE ASSESSEE, IT WAS NOTICED THAT THE ASSESSEE IS R EMITTING TDS DEDUCTED ON INTEREST PAYMENTS INTO THE CENTRAL GOVERNMENT AC COUNT IN FEW CASES, HOWEVER IN MAJORITY OF THE CASES, TAX DEDUCTED AT S OURCE HAS BEEN REFUNDED TO THE DEPOSITORS ON SUBMISSION OF FORM 15 G/15H. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE BELATEDLY REMITT ED TDS RECOVERED FROM INTEREST PAYMENTS AND ACCORDINGLY WORKED OUT S HORT DEDUCTION OF TDS, TDS DEDUCTED BUT NOT REMITTED INTO CENTRAL GOV ERNMENT ACCOUNT, INTEREST ON SHORT DEDUCTION OF TDS AND INTEREST ON DELAY IN REMITTANCE OF TDS INTO GOVERNMENT ACCOUNT AND ISSUED A SHOW CAUSE NOTICE DATED 25.2.2013 AND ASKED TO EXPLAIN AS TO WHY THE ASSESS EE SHALL NOT BE TREATED AS ASSESSEE IN DEFAULT FOR NON-COMPLIANCE O F TDS PROVISIONS. 4. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE H AS FILED LETTER DATED 13.3.2013 AND SUBMITTED ITS REPLY ON EACH ITE M OF DISCREPANCIES NOTICED BY THE ASSESSING OFFICER. THE ASSESSEE FUR THER SUBMITTED THAT IN RESPECT OF SHORT DEDUCTION OF TDS, SOME OF THE DEPO SITORS HAVE NOT FURNISHED PAN NUMBERS BECAUSE OF WHICH THE CORE BAN KING SYSTEM HAS APPLIED 20% TAX ON TOTAL INTEREST PAYMENT. THE BAN K IS IN THE PROCESS OF COLLECTING PAN NUMBERS, AND WHEREVER THE DEPOSIT ORS HAVE NOT ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 4 FURNISHED PAN NUMBERS AND IN CASE THE DEPOSITORS FA ILED TO FURNISH PAN NUMBERS WITHIN THE STIPULATED TIME, TDS SHALL BE DE DUCTED AT APPROPRIATE RATES AND REMITTED TO THE GOVERNMENT AC COUNT. IN SO FAR AS SHORT DEDUCTION OF TAX AT SOURCE, THE ASSESSEE SUBM ITTED THAT THE CORE BANKING SYSTEM WILL AUTOMATICALLY RECOVER TAX AS AN D WHEN INTEREST IS CREDITED/PAID TO THE DEPOSITORS ACCOUNT AND KEPT I N A SEPARATE ACCOUNT TILL THE SAME IS REMITTED TO THE GOVERNMENT ACCOUNT . MEANTIME, ANY DEPOSITOR FURNISHES FORM 15H/15G, THE CORE BANKING SYSTEM AUTOMATICALLY REVERSES THE TDS DEDUCTED ON INTEREST PAYMENTS AND THE NET BALANCE, IF ANY WILL BE REMITTED TO THE GOVERNM ENT ACCOUNT WITHIN THE DUE DATE SPECIFIED UNDER THE ACT. IN FEW CASES , THE DEPOSITORS HAVE FURNISHED FORM 15H/15G BELATEDLY BECAUSE OF THIS IN FORMATION IN THE SYSTEM IS NOT UPDATED, WHICH WILL BE RECTIFIED. AS REGARDS INTEREST ON SHORT DEDUCTION OF TDS AS WELL AS DELAY IN REMITTAN CE OF TDS, THE ASSESSEE SUBMITTED THAT BECAUSE OF SHORTAGE OF STAF F DUE TO TRANSFERS AND PROMOTIONS/RETIREMENT, THE BRANCH IS NOT ABLE T O COMPILE THE TDS AMOUNT DEDUCTED FROM INTEREST PAYMENTS AND HENCE TH ERE IS A SLIGHT DELAY IN REMITTANCE OF TDS, WHICH WILL BE RECTIFIED IN THE COMING DAYS. 5. THE A.O. AFTER CONSIDERING THE EXPLANATIONS OF T HE ASSESSEE, HELD THAT THE ASSESSEE IS IN THE PRACTICE OF DEDUCTING T AX AT SOURCE IN ALL THE CASES PERIODICALLY AND LATER ON OBTAINING FORM 15G/ 15H FROM THE ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 5 CUSTOMERS NOT REMITTING TAX DEDUCTED INTO THE CENTR AL GOVERNMENT ACCOUNT. HOWEVER, THE ASSESSEE FAILED TO FURNISH R ELEVANT FORM 15G/15H AT THE TIME OF SURVEY AND ONLY FURNISHED SUCH FORMS AFTER INITIATION OF PROCEEDINGS U/S 201(1) OF THE ACT. THEREFORE, HELD THE ASSESSEE AS AN ASSESSEE IN DEFAULT U/S 201(1) & 201(1A) OF THE ACT , AND COMPUTED SHORT DEDUCTION OF TAX AT SOURCE, TDS DEDUCTED BUT NOT REMITTED INTO GOVERNMENT ACCOUNT, INTEREST ON SHORT DEDUCTION OF TDS AND INTEREST ON DELAY IN REMITTANCE OF TDS TO GOVERNMENT ACCOUNT. 6. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) POSTED THE CA SE FOR HEARING ON NUMBER OF OCCASIONS AS NOTED IN HIS ORDER. THE ASS ESSEE NEITHER APPEARED NOR FURNISHED ANY DETAILS TO JUSTIFY ITS C ASE. THEREFORE, THE CIT(A) SUSTAINED THE ADDITIONS MADE BY THE A.O. TOW ARDS SHORT DEDUCTION OF TAX AND INTEREST U/S 201(1) & 201(1A) OF THE ACT. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE IS IN A PPEAL BEFORE US. 7. THE LD. A.R. FOR THE ASSESSEE, SUBMITTED THAT TH E LD. CIT(A) WAS ERRED IN CONFIRMING THE ORDERS OF THE A.O. DETERMIN ING THE DEMAND U/S 201(1) & 201(1A) OF THE ACT. THE LD. CIT(A) FAILED TO APPRECIATE THE ENTIRE FACTS RELATING TO RAISING OF DEMAND IN RESPE CT OF SHORT DEDUCTION OF TAX AT SOURCE, TDS DEDUCTED BUT NOT REMITTED INTO C ENTRAL GOVERNMENT ACCOUNT AND INTEREST ON SHORT DEDUCTION OF TDS, DES PITE ALL DETAILS WERE ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 6 BROUGHT BEFORE THE A.O. AND WERE PRODUCED BEFORE TH E CIT(A) AND THEREBY ERRED IN CONFIRMING THE DEMAND ON THE GROUN D THAT THE ASSESSEE HAS FAILED TO FURNISH THE DETAILS CALLED FOR, WHICH ARE NOT AT ALL RELEVANT TO DECIDE THE ISSUE. THE LD. CIT(A) FAILED TO APPRECI ATE THAT ONCE DECLARATION IN FORM 15G OR 15H IS FILED, ANY DEDUCT ION OF TAX BY THE ASSESSEE WOULD BE ILLEGAL AND MERE NON-FILING OF SU CH FORMS BEFORE THE COMMISSIONER CANNOT BE A REASON TO HOLD THAT THERE IS FAILURE TO DEDUCT TAX AT SOURCE. THE A.R. FURTHER SUBMITTED THAT THE TDS ASPECT OF THE BANK HAS BEEN TAKEN CARE BY THE CORE BANKING SYSTEM , WHICH IS MANAGED BY THE HEAD OFFICE AND TDS WILL BE AUTOMATI CALLY DEDUCTED AS AND WHEN INTEREST IS CREDITED/PAID TO THE DEPOSITOR S ACCOUNT AND HENCE, THE QUESTION OF SHORT DEDUCTION OF TAX AT SOURCE DO ES NOT ARISE. THE A.R. REFERRING TO THE PAPER BOOK FILED, SUBMITTED T HAT THE ASSESSEE HAS COMPILED ALL THE DETAILS AND EXPLAINED THE REASONS FOR SHORT DEDUCTION, TAX DEDUCTED BUT NOT REMITTED IN TO THE GOVERNMENT ACCOUNT AND INTEREST ON SHORT DEDUCTION OF TAX AND DELAY IN REMITTANCE O F TAX, THEREFORE, REQUESTED TO GIVE ONE MORE OPPORTUNITY TO FURNISH T HE DETAILS BEFORE THE A.O. 8. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORT ING THE ORDER OF THE CIT(A), SUBMITTED THAT THE ASSESSEE FAILED TO U TILIZE THE NUMBER OF OPPORTUNITIES OF HEARING GIVEN BY THE CIT(A) TO JUS TIFY ITS CASE. ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 7 THEREFORE, IN THE ABSENCE OF ANY DETAILS, THE CIT(A ) HAS SUSTAINED THE ADDITIONS MADE BY THE A.O. AND HIS ORDER SHOULD BE UPHELD. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. COMPUTED SHORT DEDUCTION OF TAX, TDS DEDUCTED BUT NOT REMITTED INTO GOVERNMENT ACCOUNT AND INTEREST ON SHORT DEDUC TION OF TAX AND INTEREST ON DELAY IN REMITTANCE OF TAX INTO GOVERNM ENT ACCOUNT BASED ON THE INFORMATION SUBMITTED BY THE ASSESSEE. ACCORDI NG TO THE A.O., THE ASSESSEE IS HAVING A PRACTICE OF DEDUCTING TAX AT S OURCE ON INTEREST PAYMENTS PERIODICALLY, BUT NOT REMITTING THE TDS DE DUCTED FROM INTEREST ACCOUNT AFTER COLLECTING FORM 15G/15H FROM THE DEPO SITORS. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS DEDUCTED TAX AT SOURCE AS AND WHEN INTEREST IS CREDITED OR PAID TO THE RESPECTIVE DEPOSITORS ACCOUNT, BUT NOT PAID THE AMOUNT WITHIN THE DUE DATE SPECIFI ED UNDER THE ACT. THE ASSESSEE ALSO FAILED TO FURNISH NECESSARY FORM NO.15G/15H AT THE TIME OF SURVEY, AND THE SAME WERE FURNISHED AFTER I NITIATION OF PROCEEDINGS U/S 201(1) OF THE ACT. THEREFORE, HELD THAT THE ASSESSEE AS AN ASSESSEE IN DEFAULT U/S 201(1) & 201(1A) OF THE ACT. IT IS THE CONTENTION OF THE ASSESSEE THAT ITS TDS ASPECT HAS BEEN TAKEN CARE BY THE CORE BANKING SYSTEM, WHICH IS MONITORED BY THE COMPUTER DEPARTMENT AT HEAD OFFICE, WHICH WILL AUTOMATICALLY DEDUCT TDS AS PER ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 8 THE PROVISIONS OF THE ACT, HENCE, QUESTION OF SHORT DEDUCTION OF TAX AT SOURCE DOES NOT ARISE. THE ASSESSEE FURTHER CONTEN DED THAT FEW CUSTOMERS SUBMITTED DECLARATION IN FORM 15H/15G BEL ATEDLY, BECAUSE OF WHICH THE SYSTEM HAS TAKEN 20% RATE, HOWEVER, THE S AME HAS BEEN REVERSED AFTER OBTAINING THE RELEVANT FORMS FROM TH E CUSTOMERS, THEREFORE, FOR BELATED REMITTANCE OF DECLARATION FO RMS, SHORT DEDUCTION OF TAX CANNOT BE COMPUTED. THE ASSESSEE FURTHER CL AIMS THAT IT HAS RECONCILED ALL THE DISCREPANCIES LISTED OUT BY THE A.O. IN HIS ORDER IN RESPECT OF SHORT DEDUCTION OF TAX AND TDS DEDUCTED BUT NOT REMITTED INTO GOVERNMENT ACCOUNT WITH NECESSARY EVIDENCES AN D HENCE, REQUESTED TO GIVE ONE MORE OPPORTUNITY OF HEARING T O EXPLAIN ITS CASE. THE ASSESSEE ALSO EXPLAINS THE REASONS FOR NON-FURN ISHING DETAILS BEFORE THE CIT(A). AS PER THE ASSESSEE, IT IS HAVING MORE THAN 8000 DEPOSITORS AND COLLECTION OF VOLUMINOUS DATA, LIKE PAN NUMBERS AND DECLARATION FORMS IS THE REASON FOR NON-FURNISHING OF INFORMATI ON BEFORE THE AUTHORITIES AT THE TIME OF PROCEEDINGS. THE ASSESS EE FURTHER CLAIMS THAT IT HAS FULLY COMPLIED WITH TDS PROVISIONS AND MEREL Y BECAUSE THERE IS SOME TECHNICAL DEFECTS, THE ASSESSEE CANNOT BE HELD AS THE ASSESSEE IN DEFAULT. 10. HAVING HEARD BOTH SIDES, WE FIND FORCE IN THE A RGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE BEING A P UBLIC SECTOR BANK ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 9 NORMALLY COMPLY WITH TDS AS PER THE PROVISIONS OF T HE ACT. AS CLAIMED BY THE ASSESSEE, ITS TDS ASPECT HAS BEEN TAKEN CARE BY CENTRALISED CORE BANKING SYSTEM, WHICH WILL AUTOMATICALLY DEDUCT TDS AS PER THE PROVISIONS OF THE ACT. THOUGH, THERE ARE FEW TECHN ICAL ISSUES, LIKE NON- SUBMISSION OF DECLARATION FORMS WITHIN DUE DATE, TH E SAME CANNOT BE A VALID REASON FOR TREATING THE ASSESSEE AS AN ASSESS EE IN DEFAULT U/S 201(1) OF THE ACT, PARTICULARLY WHEN ASSESSEE EXPLA INS THE REASONS FOR SUCH MISTAKES. WE FURTHER OBSERVE THAT THE ASSESSE E HAS FURNISHED ALL DETAILS AND REQUESTED FOR ONE MORE OPPORTUNITY TO E XPLAIN ITS CASE. THEREFORE, KEEPING IN VIEW OVERALL FACTS AND CIRCUM STANCES OF THE CASE, WE DEEM IT APPROPRIATE TO REMIT THE ISSUE BACK TO T HE FILE OF THE A.O. AND DIRECT THE A.O. TO EXAMINE THE CASE WITH REFERE NCE TO THE DETAILS FURNISHED BY THE ASSESSEE AND RE-COMPUTE THE SHORT DEDUCTION OF TAX, TDS DEDUCTED BUT NOT REMITTED INTO GOVERNMENT ACCOU NT AND INTEREST AS PER THE PROVISIONS OF THE ACT. NEEDLESS TO SAY, TH E ASSESSEE IS DIRECTED TO FURNISH THE NECESSARY INFORMATION WITHOUT SEEKIN G ANY ADJOURNMENTS. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. THE ASSESSEE HAS FILED STAY APPLICATION, SEEKI NG STAY OF OUTSTANDING DEMAND FOR THE ASSESSMENT YEAR 2012-13. SINCE, THE APPEAL FILED FOR THE ABOVE PERIOD HAS BEEN DISPOSED OFF, THE STAY PETITION ITA NO.444/VIZAG/2016 STATE BANK OF INDIA, REP. BY A. SATISH BABU, ONGOLE 10 FILED BY THE ASSESSEE BECOMES INFRUCTUOUS AND HENCE , THE SAME IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 7 TH APR17. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 07.04.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT STATE BANK OF INDIA, REPRESENTED BY ITS CHIEF MANAGER SRI A. SATISH BABU, TOWN BRANCH, ONGOLE, PRAKASAM D ISTRICT. 2. / THE RESPONDENT THE ITO (TDS), WARD-3(3), GUNTU R 3. + / THE CIT, GUNTUR 4. + ( ) / THE CIT (A)-2, GUNTUR 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM
