Bolangir District Central Co-Operative Bank Ltd., Bolangir V. ITO(TDS), Sambalpur, Sambalpur

ITA 448/CTK/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96878 (ITAT-CUTTACK)
• Duration Of Justice: 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 25-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUVENDU DUTTA
• Assessee Lawyers: P K MISHRA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK . , & , BEFORE S/SHRI B. RAMAKOTAIAH, ACCOUNTA NT MEMBER & PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ! ./ ITA NOS.448, 449 & 450 /CTK/2014 ( ' ' ' ' #$ #$ #$ #$ / ASSESSMENT YEARS :2010-2011, 2011-12 & 2012-13) BOLANGIR DISTRICT CENTRAL CO.OP. BANK LTD., BOLANGIR BRANCH, BHAGIRATHI CHOWK, DIST: BOLANGIR VS. ITO (TDS), SAMBALPUR AINTHAPALI, SAMBALPUR ! ./ %& ! ./PAN/GIR NO. ( ' /APPELLANT ) .. ( ()' / RESPONDENT ) '+ - - - - /ASSESSEE BY : SHRI P.K.MISHRA %# - - - - /REVENUE BY : SHRI SUVENDU DUTTA '#. + / DATE OF HEARING : 5 TH NOV. 2015 /$ + /DATE OF PRONOUNCEMENT 5 TH NOV. 2015 0 0 0 0 / O R D E R PER PARTHA SARATHI CHAUDHURY, JM THESE THREE APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST A COMMON ORDER OF THE LD CIT(A) CUTTACK DATED 29.9.2014 FOR THE ASSESSMENT YEARS 2010-2011 TO 2012-2013, RESPECTIVELY. COMMON GROUNDS TAKEN IN A LL THE APPEALS ARE AS UNDER: 1. FOR THAT, THE IMPUGNED ORDERS PASSED BY THE F ORUMS BELOW U/S.201(1) AND U/S.201(LA) ARE NOT JUST AND PROPER UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND HENCE ARE LIAB LE TO BE QUASHED IN THE INTEREST OF JUSTICE. 2. FOR THAT THE LEARNED C.I.T(A) SHOULD NOT HAVE DI SMISSED THE APPEAL BECAUSE OF NON APPEARANCE OF THE ADVOCATE AND SHOUL D HAVE ALLOWED ITA NO.448,449 & 450/CTK/2014 ASSESSMENT YEAR :2010-2011TO 2012-13 2 FURTHER OPPORTUNITY TO THE ASSESSEE/APPELLANT AS IT WAS INTIMATED THAT THE ARGUING COUNSEL IS ILL AND WAS UNDER MEDICAL TR EATMENT ON THAT DATE. 3. FOR THAT, THE LEARNED I.T.O. (TDS) HAS COMMITTED GROSS ERROR OF FACT AND LAW IN NOT CONSIDERING THE FACT THAT, YOUR ASSE SSEE HAS PAID THE INTEREST TO ITS MEMBERS AND SHARE HOLDERS ON WHICH IT NEED NOT REQUIRE TO DEDUCT TAX AT SOURCE UNDER SECTION 194A OF THE I .T.ACT,1961. 4. FOR THAT, WHILE APPLYING SECTION 201(1)/201(1A) 1 TO THE FACTS OF THE PRESENT CASE, THE LEARNED I.T.O.(TDS) SHOULD NOT HA VE IGNORED THE BASIC FACT THAT, THE ASSESSEE IS NOT REQUIRED TO DEDUCT T AX AT SOURCE ON THE INTEREST PAID/CREDITED ON THE DEPOSITS. 5.FOR THAT, THE LEANED I.T.O. (TDS) AS WELL AS THE LEARNED C.I.T(A) ARE WHOLLY UNJUSTIFIED IN IGNORING THE FACT THAT IN MOS T OF THE CASES, INDIVIDUALLY YOUR ASSESSEE HAS BEEN SERVED WITH FOR M N0.15G/15H AND AFTER RECEIPT OF THE SAID FORMS, YOUR ASSESSEE IS N OT REQUIRED TO DEDUCT TAX AT SOURCE. 6. FOR THAT, THE LEANED I.T.O. (TDS) AS WELL AS THE LEARNED C.I.T(A) ARE WHOLLY UNJUSTIFIED IN IGNORING THE FACT THAT IN MOS T OF THE CASES THE INTEREST AMOUNT HAS NOT EXCEEDED THE BASIC LIMIT OF RS. 10,000.0C ON WHICH NO TAX IS REQUIRED TO BE DEDUCTED AT SOURCE. 7. FOR THAT, THE LEARNED A.O, AS WELL AS THE LEARNED C.I.T(A) HAVE COMMITTED GROSS ERROR OF LAW IN GIVING A CONTRARY F INDING TO THE FACTS ON RECORD FOR WHICH THE IMPUGNED ORDER IS LIABLE TO BE QUASHED IN TOTO. 8. FOR THAT, BEFORE PASSING THE IMPUGNED ORDER THE LEA RNED I.T.O(TDS) SHOULD HAVE ALLOWED SUFFICIENT OPPORTUNITY IN ORDER TO ENABLE THE ASSESSEE TO PRODUCE THE DETAIL BREAK UP OF INTEREST CALCULATION AS IT IS WELL KNOWN TO HIM BECAUSE OF SYSTEM ERROR ONLY ASSE SSEE COULD NOT PRODUCE THE SAME IN TIME. 9. FOR THAT, BEFORE TREATING THE ASSESSEE AS ASSESSEE IN DEFAULT, THE LEARNED I.T.O.(TDS) SHOULD NOT HAVE TURNED DOWN THE PRAYER FOR VERIFICATION FROM THE DEPARTMENTAL RECORD THAT IN A LMOST ALL CASES THE INTEREST PAID/CREDITED WERE DISCLOSED AND TAX HAS B EEN PAID DULY ON THE RETURN FILED BY THE DEPOSITORS. 10. FOR THAT, THE IMPUGNED ORDER PASSED U/S.201(1) AND 201(1A) OF THE I.T ACT, 1961 IS WITHOUT JURISDICTION, WITHOUT AUTHORIT Y OF LAW AND BEING NOT SUSTAINABLE IN THE EYE OF LAW AS SUCH IS LIABLE TO BE QUASHED IN THE INTEREST OF JUSTICE. ITA NO.448,449 & 450/CTK/2014 ASSESSMENT YEAR :2010-2011TO 2012-13 3 2. FACTS IN BRIEF ARE THAT THE ASSESSEE, NAMELY BOL ANGIR DISTRICT CENTRAL CO- OPERATIVE BANK LTD., HAS BEEN CREATED UNDER THE SOC IETIES ACT FOR THE PURPOSE OF DEVELOPMENTS OF ECONOMIC STANDARD BY PROVIDING LOAN S AND THE BENEFITS OF SAVINGS TO ITS MEMBERS, SHAREHOLDERS AND LOCAL PEOPLE OF THAT AREA. DURING THE COURSE OF SURVEY / VERIFICATION OF TDS OF ASSESSEE BANK FOR THE ABOVE THREE ASSESSMENT YEARS, IT WAS FOUND THAT INTEREST PAID/ CREDITED ON FIXED DEPOSIT S AND PADMALAYA DEPOSITS HAVE NOT UNDERGONE TDS U/S. 194 A OF THE ACT AS PER THE PROV ISIONS. THE BRANCH MANAGER OF THE ASSESSEE BANK STATED THAT DEPOSITORS TO WHOM INTERE ST WERE PAID DURING THE FINANCIAL YEARS WERE MEMBERS OF THEIR SOCIETY/ BANK AND CLAIM ED THAT UNDER THE SOCIETY ACT, INTEREST INCOME EARNED BY MEMBERS WERE EXEMPT FROM TAX AND THEREFORE, TDS WERE NOT DEDUCTED. HE ALSO STATED THAT FORM 15 G AND 15 H WAS ALSO RECEIVED FROM THE DEPOSITORS FOR NON-DEDUCTION OF TDS. HOWEVER, INSPI TE OF ADEQUATE OPPORTUNITIES AFFORDED BY THE ITO(TDS), THE ASSESSEE BANK WAS UN ABLE TO PRODUCE ACCOUNT WISE INTEREST PAYMENT DETAILS, EVIDENCE IN SUPPORT OF TH E MEMBERSHIP OBTAINED BY THE RECIPIENTS OF INTEREST AS WELL AS COPIES OF FORM 15 G AND 15 H AS RECEIVED FROM THE DEPOSITORS. IT WAS IN THIS BACKDROP THAT THE ITO (T DS) TREATED THE ASSESSEE BANK AS ASSESSEE IN DEFAULT FOR ALL THE ABOVE THREE ASSESSM ENT YEARS AND CHARGED SHORT DEDUCTION U/S. 201(1) OF THE ACT @ 10% OF THE TOTAL INTEREST PAID AND LEVIED INTEREST U/S. 201(1)(1A) OF THE ACT AS PER THE PROVISION. A GGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION BEFORE THE LD CIT(A). ITA NO.448,449 & 450/CTK/2014 ASSESSMENT YEAR :2010-2011TO 2012-13 4 3. BEFORE THE LD CIT(A), NOBODY WAS PRESENT ON BEH ALF OF THE ASSESSEE TO PUTFORTH THEIR GRIEVANCE. HENCE, LD CIT(A) UPHELD THE DECIS ION OF THE ITO(TDS). HENCE, THE ASSESSEE HAS FILED APPEALS BEFORE US. 4. AT THE TIME OF HEARING, LD COUNSEL FOR THE ASSES SEE SUBMITTED THE ITO(TDS) HAS PASSED THE ORDER U/S.201(1) AND 201(1A) WITHOUT AFF ORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. HE SUBMITTED THAT DUE TO SHORTAGE OF STA FF IN THE BANK, THE BIFURCATION STATEMENTS AS WELL AS EVIDENCE COULD NOT BE COLLECT ED WITHIN THE TIME GIVEN BY THE ITO(TDS) AND, THEREFORE, HE PASSED THE ORDER. HE S UBMITTED THAT DUE TO SUDDEN NEUROLOGICAL PROBLEM OF LD COUNSEL FOR THE ASSESSEE DEALING WITH THE TAX MATTER OF THE BANK, IT WAS NOT POSSIBLE TO APPEAR WITH ALL THE M ATERIAL EVIDENCE IN SUPPORT OF THE CLAIM OF THE ASSESSEE BEFORE THE LD CIT(A). HE PR ODUCED A PAPER BOOK CONTAINING 177 PAGES I.E. COPY OF THE DETAILS OF INTEREST ACCRUED ON FIXED DEPOSITS FOR RS.10,000/- & ABOVE FOR A.Y. 2010-2011, COPY OF INTEREST ACCRUED ON GOVERNMENT DEPOSITS AND COPY OF INTEREST ACCRUED ON FIXED DEPOSITS FOR LESS THAN RS.10,000/-. HE PRAYED BEFORE US TO ADMIT THE ABOVE ADDITIONAL EVIDENCES AND RESTORE TH E MATTER TO THE FILE OF THE AO FOR FRESH CONSIDERATION. 5. ON THE OTHER HAND LD D.R. OPPOSED THE SUBMISSION OF ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US. BEFORE US, LD COUNSEL FOR THE ASSESSEE PRODUCE D ALL DETAILS/EVIDENCE IN SUPPORT OF ITA NO.448,449 & 450/CTK/2014 ASSESSMENT YEAR :2010-2011TO 2012-13 5 THE CLAIM OF THE ASSESSEE IN THE FORM OF PAPER BOOK . WE FIND THAT THE EVIDENCES NOW FILED BEFORE US, WERE NOT FURNISHED EITHER BEFORE T HE AO OR AT THE TIME OF FIRST APPELLATE PROCEEDINGS. HENCE, WE ARE OF THE VIEW THAT NONE O F THE AUTHORITIES HAD ANY OCCASION TO EXAMINE THE EVIDENCES. WE ARE ALSO CONVINCED TH AT DUE TO SUDDEN ILLNESS OF THE TAX COUNSEL OF THE ASSESSEE, PROPER COMPLIANCE WAS NOT MADE BEFORE THE LD CIT(A). THE ASSESSEE CANNOT BE DENIED THE RIGHT TO CLAIM ADJUDI CATION OF THE ISSUE ON THE MERITS WHEN THE SAID ISSUE WAS SPECIFICALLY TAKEN AT THE T IME OF FINAL HEARING OF THE SAID APPEAL AND THE REVENUE HAD NO OCCASION TO DEAL WI TH THE SUBMISSION MADE THEREON. MANY TIMES IT SO HAPPENS THAT FOR SEVERAL REASONS L IKE NOT GETTING PROPER OPPORTUNITY TO SUBMIT THE DETAILS, OR AO NOT INFORMING PROPERLY ON WHAT GROUNDS HE IS NOT SATISFIED WITH THE EXPLANATION FURNISHED OR HE WANTS ADDITION AL INFORMATION AND SUDDENLY WITHOUT INFORMING OR GIVING OPPORTUNITY, HE MAKES ADDITION/ DISALLOWANCES ON DIFFERENT POINTS OR SOMETIMES, THE ASSESSEE IS PREVENTED BY SUFFICIENT CAUSE FOR NOT BEING ABLE TO SUBMIT DETAILS CALLED FOR. IN ALL SUCH CASES, WHEN THE MAT TERS COME UP FOR APPEAL BEFORE THE FIRST APPELLATE AUTHORITY OR SECOND APPELLATE AUTHO RITY, ADDITIONAL EVIDENCE IS REQUIRED TO BE FURNISHED AT THE APPELLATE STAGE. IT ALSO HAP PENS THAT AT THE APPELLATE STAGE, IT IS FELT NECESSARY TO FILE SUPPORTING/ADDITIONAL EVIDEN CE. WE ACCORDINGLY ADMIT THE ADDITIONAL EVIDENCE AND DIRECT THE ASSESSEE TO FURN ISH ALL THOSE EVIDENCES NOW FILED BEFORE THE TRIBUNAL TO FILE BEFORE THE AO. THEREFOR E, WE REMIT THE MATTER BACK TO THE FILE OF THE AO FOR A DENOVO ASSESSMENT AFTER PROVID ING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECT ED TO PRODUCE ALL THE REQUIRED EVIDENCE AS REQUIRED BY THE AO FOR FRESH ASSESSMENT . ITA NO.448,449 & 450/CTK/2014 ASSESSMENT YEAR :2010-2011TO 2012-13 6 7. IN THE RESULT, APPEALS OF THE ASSESSEE ARE TREAT ED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 5 /11/20 15 SD/- SD/- . ,/B.RAMAKOTAIAH , PARTHA SARATHI CHAUDHURY /ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK; '! DATED 5 /11 /2015 B.K.PARIDA, SPS 0 0 0 0 (+ (+ (+ (+ 3$+ 3$+ 3$+ 3$+ / COPY OF THE ORDER FORWARDED TO : 0' 0' 0' 0' / BY ORDER, SR. PRIVATE SECRETARY, , / ITAT, CUTTACK 1. ' / THE APPELLANT : BOLANGIR DISTRICT CENTRAL CO.OP. BANK LTD., BOLANGIR BRANCH, BHAGIRATHI CHOWK , DIST: BOLANGIR 2. ()' / THE RESPONDENT. ITO (TDS), SAMBALPUR AINTHAPALI, SAMBALPUR 3. 4 ( ) / THE CIT(A), SAMBALPUR 4. 4 / CIT ,(TDS) BHUBANESWAR 5. #5 (+' , / DR, ITAT, CUTTACK 6. 7 8. / GUARD FILE. )+ (+ //TRUE COPY//