ACIT (TDS), Dehradun V. State Bank of India, Dehradun

ITA 4911/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97442 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 30-09-2015
• Assessment Year: misc
• Appeal Filed On: 19-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Time period of passing order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. G. C. GUPTA, HONBLE VICE PRESIDENT AND SH. O.P.KANT , ACCOUNTANT M EMBER ITA NO.4911/DEL./2013 ASSTT. YEAR : 2007 - 08 ACIT(TDS) 13 - A, SUBHASH ROAD, DEHRADUN VS STATE BANK OF INDIA, TEL BHAWAN, DEHRADUN (APPELLANT) (RESPONDENT) PAN NO. MRTSO2193C APPELLANT BY : SH. SUJIT KUMAR, SR. DR RESPONDENT BY : SH. O.P. SAPRA, SR. ADV. SH. BISHWAJEET BHATTACHARYA, ADV SH. JEETAN NAGPAL, CA DATE OF HEARING : 30.09.2015 DATE O F PRONOUNCEMENT : 06 .10.2015 ORDER PER O.P.KANT , A.M. THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE L EARNED COMMISSIONER OF INCOME - TAX (APPEALS) - I, DEHRADUN DATED 31.05.2013 IN RESPECT OF ASSESSMENT YEAR 2007 - 08. THE REVENUE HAS RAISED FOLLOWING GROUNDS: - 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THE ORDER OF THE AO AS BARRED BY LIMITATION IGNORIN G THE FACTS THAT THE ASSESSEE HAD NOT RAISED THIS ISSUE BEFORE THE AO AND THEREFORE THE LD CIT(A) SHOULD HAVE BEEN GIVEN AN OPPORTUNITY TO THE AO BEFORE DECIDING THE ISSUE. ITA NO. 4911 /DEL/2013 2 2. THE LD CIT(A) HAS ERRED IN LAW AND FACTS IN HOLDING THE ORDER OF THE AO AS BARR ED BY LIMITATION BY TREATING THE ORDER OF AO TO BE COVERED U/S 201(3)(I) OF THE IT ACT IGNORING THE FACT THAT THE ASSESSEE HAS NOT FILED ANY TDS STATEMENT IN RESPECT OF IMPUGNED TRANSACTION AND THEREFORE THE CASE CANNOT BE SAID TO BE COVERED U/S 201(3)(I) OF THE IT ACT. THE TDS VERIFICATION WAS CONDUCTED ON 19.02.2013 AND ORDER OF THE AO PASSED ON 22.03.2013 AND THEREFORE THE ORDER OF THE AO WAS WELL WITHIN LIMITATION PERIOD. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A SCHEDULED COMMERCIAL BANK AND A VERIFICATION OF TAX DEDUCTED AT SOURCE ( TDS ) WAS CARRIED OUT BY THE INCOME - TAX DEPARTMENT ON 19/02/2013 ON THE BRANCH OF THE ASSESSEE BANK LOCATED AT TEL BHAWAN, DEHRADUN. DURING VERIFICATION IT WAS OBSERVED THAT T HE OIL AND NATURAL GAS CORPORATION LTD. ( IN SHORT ONGC ) WAS MAINTAINING AN ACCOUNT CALLED SITE R ESTORATION A CCOUNT (SR A ) WITH TH E ASSESSEE . THE LEARNED A SSESSING OFFICER (IN SHORT A O ) OBSERVED THAT NO TAX WAS DEDUCTED BY THE ASSESSEE BANK ON THE INTEREST WHICH ACCRUED ON THE SAID ACCOUNT TO THE ONGC. BEFORE THE LD AO, THE ASSESSEE SUBMITTED THAT AS PER PROVISIONS OF SECTION 33ABA OF THE INCOME TAX ACT (IN SHORT THE ACT) , THE AMOUNT CREDITED BY WAY OF INTEREST IN SPECIAL ACCOUNT OR SRA DOES NOT ATTRACT A TAX LIABILITY PAYABLE BY THE ONGC LIMITED BECAUSE THE INTEREST ON SRA CREDITED BY THE AS SESSEE WAS DEEMED TO BE A DEDUCTIBLE DEPOSIT AND THEREFORE ITA NO. 4911 /DEL/2013 3 EXCLUDED FROM THE TOTAL INCOME CHARGEABLE UNDER THE ACT. FURTHER, THE ASSESSEE CONTENDED THAT THE INTEREST WAS NOT TAXABLE EVEN AT THE TIME OF WITHDRAWAL IF THE SAME WAS UTILIZED FOR THE PURPOSES CONTAINED IN THE SR A SCHEME IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. T HE LD. AO , HOWEVER , DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THE ASSESSEE TO BE IN DEFAULT IN DEDUCTING OF TAX AND RAISED DEMAND U/S 201 AND INTEREST U/S 201(1 A ) OF TH E ACT. AGAINST THE SAID ORDER OF THE LD. AO , THE ASSESSEE FILED APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) [IN SHORT CIT(A) ] , WHO , THEN HELD THAT AS PER CLAUSE (I) OF PROVISIONS OF SECTION 201(3) OF THE ACT, THE AO WAS REQUIRED TO PASS THE ORDER WITHIN 2 YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE STATEMENT AS REFERRED IN SECTION 200 WAS FILED, HOWEVER THE AO FAILED TO COMPLY THE SAID LIMITATION, AND THEREFORE, T HE ORDER OF THE LD. AO WAS HELD INVALID BEING BARRED BY LIMITATION. ACCORDINGLY, THE LD CIT (A) DID NOT ADJUDICATE MATTER ON MERIT. AGGRIEVED , THE R EVENUE HAS FILED AN APPEAL BEFORE US. 3. AT THE OUTSET , THE L EARNED AUTHORISED REPRESENTATIVE (IN SHORT AR) OF THE ASSESSEE SUBMITTED THAT ON MERIT, THE DECISION OF THE CO - ORDINATE BENCH OF THE INCOME - TAX APPELLATE TRIBUNAL ( ITAT) IN ITA NO.3936, 3937 AND 3938/DEL/2013, FOR THE ASSESSMENT YEAR 2010 - 11, 2011 - 12 ITA NO. 4911 /DEL/2013 4 AND 2012 - 13, IN THE CASE OF THE ASSESSEE , IS IN FAVOUR OF THE ASSESSEE . IN THE ABOVE APPEAL , THE COORDINATE BENCH IN PARA 17.11 OF THE DECISION , HAS HELD THA T SITE RESTORATION ACCOUNT DEPOSIT IS NOT A TERM DEPOSIT FOR A FIXED PERIOD AND THEREFORE IN VIEW OF CLAUSE (VII) TO SECTION 194A(3) , THE PROVISION OF SECTION 194A ARE NOT ATTRACTED. A COPY OF THE SAID ORDER WAS ALSO PROVIDED TO THE LEARNED COMMISSIONER (DEPARTMENT REPRESENTATIVE) [IN SHORT CIT(DR)] , WHO WAS DIRECTED TO FILE OBJECTIONS IF ANY TO WHETHER ISSUE IS COVERED BY THE ABOVE DECISION , HOWEVER , S HE COULD NOT CONTROVERT THE SUBMISSION OF THE LD AR . WE HAVE GONE THOUGH THE ABOVE DECISION AND FIND THAT THE IDENTICAL ISSUE IS INVOLVED IN APPEAL IN HAND AND T HE DECISION OF THE ITAT BEING A PRECEDENT, WE ARE BOUND TO FOLLOW. ACCORDINGLY, FOLLOWING THE DECISION OF COORDINATE BENCH OF THE ITAT IN THE CASE OF THE ASSESSEE ITSELF, WE HOLD THAT SITE RESTORATION ACCOUNT IS NOT A TERM DEPOSIT FOR A FIXED PERIOD AND THEREFORE IN VIEW OF CLAUSE (VII) TO SECTION 194A(3) , PROVISION OF SECTION 194A ARE NOT APPLICA BLE AND THE ASSESSEE WAS NOT LIABLE FOR DEDUCTING TAX AT SOURCE ON THE INTEREST CREDITED IN SRA . 4. I N VIEW OF THE OUR FINDING AS ABOVE , THE GROUND OF THE REVENUE THAT THE LD CIT(A) ERRED IN HOLDING THAT THE ORDERS OF THE AO WAS BARRED BY THE LIMITATION , IS RENDERED MERELY ACADEMIC AND HAVE BECOME INFRACTUOUS , HENCE NO ITA NO. 4911 /DEL/2013 5 ADJUDICATION IS REQUIRED. ACCORDINGLY, GROUND OF THE REVENUE IS DISMISSED. 5 . IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 06 / 10 /2015. - SD/ - - SD/ - (G.C. GUPTA) ( O.P.KANT ) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 06 / 10/2015 *AJAY * COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR