State Bank of India, Kudithini V. CIT, Gulbarga

ITA 51/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8424 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-02-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 19-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TULAJAPPA KALBURGI
• Section: 201(1)

Judgement Text

ITA.51/BANG/2016 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'A', BENGALURU BEFORE SHRI. VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI. S. JAYARAMAN, ACCOUNTANT MEMBER I.T.A NO.51/BANG/2016 (ASSESSMENT YEAR : 2012-13) STATE BANK OF INDIA, KUDITHINI BRANCH, KUDITHINI .. APPELLANT PAN : BLRS23899B V. INCOME TAX OFFICER, TDS WARD, BELLARY .. RESPONDENT ASSESSEE BY : SHRI. TULAJAPPA KALBURGI, ADVOCATE REVENUE BY : SMT. SWAPNA DAS, JCIT HEARD ON : 06.02.2017 PRONOUNCED ON : 17.03.2017 O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE, AGAINST T HE ORDER OF THE CIT (A), GULBARGA, DT.09.11.2015, FOR THE ASSESSMENT YE AR 2012-13. 02. IN THE ASSESSEES CASE , DURING TDS VERIFICATI ON , IT WAS FOUND THAT THE ASSESSEE BANK DEDUCTED TDS AT RS. 29,77,536/- ON THE INTEREST PAYMENTS TO THE TERM DEPOSITORS . BUT, IT REMITTED RS. 2,54,995/- ONLY TO THE CENTRAL GOVERNMENT ACCOUNT. HENCE, THERE WAS A SHORT REMITTANCE OF TDS DEDUCTED AT RS. 27,22,541/-. A SHOW CAUSE NOTI CE WAS SENT TO THE ASSESSEE ON 11.03.2013 FOR NON REMITTANCE OF TD S AND IT WAS ASKED WHY IT SHOULD NOT BE TREATED AS AN ASSESSEE IN DEFA ULT U/S 201(1) . IN ITA.51/BANG/2016 PAGE - 2 RESPONSE, THE ASSESSEE BANK COULD NOT EXPLAIN RE ASONS FOR NON REMITTANCE OF TDS DEDUCTED INTO GOVERNMENT ACCOUNT AND IT IS STATED IN THE ORDER THAT SRI. L. S. DESAI, BRANCH MANAGER APP EARED AND PRODUCED COPIES OF CHALLANS FOR RS.2,54,995/- ONLY. THUS, TH E ACIT, TDS CIRCLE, BELLARY PASSED AN ORDER U/S.201(1) / 201(1A) DT. 27.03.2014 FOR THE ASSESSMENT YEAR 2012-13 DETERMINING RS.37,02,641/ -, AS THE TDS LIABILITY ALONG WITH RS.9,80,100/-, THE INTEREST PAYABLE U/S .201(1A) . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A), GULBARGA, AND THE CIT (A ) DISMISSED THE APPEAL IN HIS ORDER DT.09.11.2015. AGGRIEVED , THE ASSESSEE FILED THIS APPEAL WITH FOLLOWING GROUNDS: ITA.51/BANG/2016 PAGE - 3 ITA.51/BANG/2016 PAGE - 4 ITA.51/BANG/2016 PAGE - 5 ITA.51/BANG/2016 PAGE - 6 ITA.51/BANG/2016 PAGE - 7 A DEMAND NOTICE UNDER SECTION 156 HAD BEEN GIVEN TO HIM. ACCORDING TO SECTION 156 ITA.51/BANG/2016 PAGE - 8 03. WE HEARD THE RIVAL SUBMISSIONS ON THE CONDONATI ON PRAYER AND CONDONE THE DELAY. THE AR SUBMITTED THAT IN THE C ASE OF BANKS USING CBS SOFTWARE, INTEREST PAYABLE ON TIME DEPOSITS IS CALC ULATED GENERALLY ON DAILY BASIS OR MONTHLY BASIS AND IS SWEPT & PARKED ACCORD INGLY IN THE PROVISIONING ACCOUNT FOR THE PURPOSE OF MACRO MONITORING ONLY BU T CONSTRUCTIVE CREDIT IS GIVEN TO THE DEPOSITORS/PAYEES ACCOUNT EITHER AT T HE END OF THE FINANCIAL YEAR OR AT PERIODIC INTERVALS AS PER PRACTICE OF TH E BANK OR AS PER THE DEPOSITORS/PAYEES REQUIREMENT OR ON MATURITY OR O N ENCASHMENT OF TIME DEPOSITORS WHICHEVER IS EARLIER. HE FURTHER SUBMITT ED THAT THE ASSESSEE WAS NOT GIVEN ADEQUATE OPPORTUNITY TO PRODUCE FORM 15H/ G ETC AND RELIED ON THIS TRIBUNAL DECISION IN THE CASE OF STATE BANK O F INDIA , HOSEPET CITY BRANCH, HOSEPET VS CIT(A) GULBURGA IN ITA NO.2 TO 5 (BANG) 2016 DT 16.9.206. PER CONTRA, THE DR RELIED ON THE CIT (A) AND POINTED OUT THE CIT ITA.51/BANG/2016 PAGE - 9 (A) HAS FOUND THAT THE ASSESSEE DID NOT HAVE VALID FORM 15H/GS AND AT BEST THEY WERE DEFECTIVE AND QUOTED THE CS IT(A) FINDING THAT THE CONTENTION OF THE APPELLANT BANK IN THE GROUND NO.7 IS THAT THE PAYER CANNOT BE BLAMED BECAUSE AT THE TIME OF PAYING THE AMOUNT, PAYER HAS TO RELY UPON THE DECLARATION FILED BY THE PAYEE EVE N THOUGH IT IS INCOMPLETE AND EVEN THOUGH THE PAYER HAS FAILED TO SUBMIT THE COPY OF SAME TO THE CIT. THIS CONTENTION IS NOT ACCEPTAB LE. THE DUE WEIGHT SHOULD BE GIVEN TO THE PROVISIONS OF THE ACT AND TH E BANK SHOULD FOLLOW THE PROVISIONS. IF ANY DEPOSITORS FILED INCOMPLETE/ DEF ECTIVE FORM 15G/H, THE BANK SHOULD TREAT IT AS DEFECTIVE AND REJECTED EXEMPTION CLAIMED BY THE DEPOSITOR & DEDUCT TDS. EVEN THE DEPOSITOR C AN BE ASKED TO RECTIFY THE DEFECT BEFORE IT IS COLLECTED OR ACCEPT ED. FOR E.G., IF ANYONE OPENING THE ACCOUNT DOES NOT FILL THE FORM CORRECTL Y OR DOES NOT FOLLOW RBI GUIDELINES FOR OPENING ACCOUNT, BANKS REFUSE TO OPE N AND OPERATE THAT ACCOUNT. SIMILARLY CAUTION AND ADHERENCE SHOULD BE OBSERVED IN RELATION TO PROVISIONS OF INCOME TAX ACT. AS CONTESTED BY THE A PPELLANT BANK IN GROUND NO.8 TO CONSIDER THE DELAYED SUBMISSION OF FORM 15G /H, THERE IS NO EVIDENCE PRODUCED THAT THE COPIES OF FORM 15G/H WER E PRODUCED BEFORE JURISDICTIONAL CCIT / CIT. 04. WE HAVE HEARD THE RIVAL SUBMISSIONS. THIS TRIB UNAL , IN THE CASE CITED, SUPRA, HAS SET ASIDE THE MATTER TO THE AO AS UNDER : ITA.51/BANG/2016 PAGE - 10 7. AS PER THE ABOVE PARA REPRODUCED FROM THE ORDER OF THE TRIBUNAL, IT IS SEEN THAT IN THAT CASE, THE TRIBUNAL HAS GIVEN A FI NDING THAT AS IS EVIDENT FROM THE RECORD, THE ENTRY WAS REVERSED ON THE NEXT WORKING DAY AND THEREFORE, THE AMOUNT SO CREDITED HAS NEVER ACCRUED TO THE PAYEE. IN THE PRESENT CASE, NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD HAT INTEREST CREDITED AS PER THIS SOFTWARE WAS ONLY A NOTIONAL P ROVISION AND THE SAME WAS REVERSED AFTERWARDS. BUT THIS IS ALSO AN UNDISPUTED FACT THAT THE BANK IS USING CBS SOFTWARE AS IN THAT CASE. HENCE, WE FEEL IT PROPER THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO FOR A FRESH DECISION IN THE LIGHT OF THIS TRIBUNAL ORDER RENDERED IN THE CASE OF BANK OF MAHARASHTRA (SUPRA) AND IF THE ASSESSEE IS ABLE TO ESTABLISH THAT IT WAS ONLY A NOTIONAL PROVISION WHICH WAS REVERSED AFTERWARDS THEN NO TDS LIABILITY CAN BE IMPOSED ON THE ASSESSEE. WE ORDER ACCORDINGLY . FOLLOWING IT, THIS ISSUE IS REMITTED BACK TO THE FI LE OF THE AO FOR A FRESH DECISION. IF THE ASSESSEE IS ABLE TO ESTABLISH THA T IT WAS ONLY A NOTIONAL PROVISION WHICH WAS REVERSED AFTERWARDS, THEN NO TD S LIABILITY CAN BE IMPOSED ON THE ASSESSEE. WE ORDER ACCORDINGLY. FOR STATISTICAL PURPOSES, THE APPEAL IS TREATED AS ALLOWED. 05. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH DAY OF MARCH, 2017. SD/- SD/- ITA.51/BANG/2016 PAGE - 11