THE STATE BANK OF PATIYALA, Ujjain V. THE DCIT Centralised Processing Cell-TDS, Gaziabad

ITA 563/IND/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4392 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 23-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Revised return
• Section: 206AA

Judgement Text

ITANO.563/IND/2016: AY:2013-14 STATE BANK OF PATIYALA PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER STATE BANK OF PATIALA UJJAIN TAN BPLS03866C VS. DCIT(TDS) CPC, GHAZIABAD APPELLANT RESPONDENT APPELLANT BY SHRI SHARAD JAIN RESPONDENT BY SHRI MOHD. JAVED DATE OF HEARING 3.8.2016 DATE OF PRONOUNCEMENT 3.8.2016 O R D E R PER O.P. MEENA ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS), UJJAIN, [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 4.2.2 016 AND PERTAINS TO ASSESSMENT YEAR 2013-14 AS AGAINST APPE AL DECIDED IN ORDER U/S. 200A OF INCOME TAX ACT,1961( HEREIN AFTER REFERRED TO AS 'THE ACT) DATED 25.12.2013 OF DCIT(TDS),CPC, GHAZIABAD [HEREINAFTER REFERRED TO A S THE AO]. I.T.A. NO. 563/IND/2016 ASSESSMENT YEAR: 2013-14 ITANO.563/IND/2016: AY:2013-14 STATE BANK OF PATIYALA PAGE 2 OF 8 2. GROUND NO. 1 OF THE APPEAL OF THE ASSESSEE READS AS UNDER :- THAT, ON THE FACTS AND THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN HOLDING THAT THE APPELLANT WAS LIABLE TO DEDUCT TDS ON INTEREST PAYMENT @ 20% AS P ER SECTION 206AA (FOR NON AVAILABILITY OF PAN), INSTEA D OF NORMAL TDS RATE ON INTEREST AT 10% TO NAME OF PAYEE PAN INTEREST PAYMENT(RS.) UJJAIN NAGRIK SAHKARI BANK AAAU0360J 12,17,291 PRAFULL KUMAR JAIN ABMPJ1794K 17,328 SHELAV SHARMA CPJPS1758B 14,605 THE SUM AND SUBSTANCE OF THE GROUNDS OF APPEAL IS T HAT THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE ASSESS EE WAS LIABLE TO DEDUCT TDS U/S 194A READ WITH SECTION 206 AA OF THE ACT AT RS.1,26,502/- AND ALSO ERRED IN CONFIRMI NG INTEREST OF RS.14,093/- LEVIED U/S 201(1A) OF THE A CT ON THE GROUND THAT THE ASSESSEE WAS LIABLE TO DEDUCT TDS O N INTEREST PAYMENT @ 20% AS PER SECTION 206AA (FOR NO N- AVAILABILITY OF PAN) INSTEAD OF NORMAL RATE OF TDS AT 10%. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A NATIONALISED BANK WHICH WAS REQUIRED TO DEDUCT TDS ON THE STIPULATED RATE AND DEPOSIT THE SAME IN THE GOVT. A CCOUNT. THE ASSESSEE HAS DEDUCTED TDS @ 10% IN THE CASE OF UJJAIN ITANO.563/IND/2016: AY:2013-14 STATE BANK OF PATIYALA PAGE 3 OF 8 NAGRIK SAHKARI BANK, SHRI PRAFULL KUMAR JAIN, SHRI SHELAV SHARMA AND SHRI SUBHASH SONI. THE PANS OF THESE PER SONS WERE QUOTED WRONGLY, HENCE, THE ASSESSEE WAS REQUIR ED TO DEDUCT TDS @ 20%. THEREFORE, THE ASSESSING OFFICER RAISED THE DEMAND OF RS.1,26,502/- ON ACCOUNT OF SHORT DED UCTION OF TDS AND INTEREST OF RS.14,093/- ON SHORT DEDUCTI ON. AGAINST THIS, THE ASSESSEE FILED APPEAL BEFORE THE LEARNED CIT(A) WHO ALSO CONFIRMED THE ACTION OF THE ASSESSI NG OFFICER. 4. AGGRIEVED WITH THE ABOVE ORDER OF THE LEARNED CI T(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT CORRECT PAN OF THE PAYEES ARE AVAILABLE WITH THE AS SESSEE, THEREFORE, TDS LIABILITY IS 10% INSTEAD OF 20%. TH E CORRECT PAN OF PAYEES HAS ALSO BEEN MENTIONED AT PAGE 4 PAR A 4 OF THE ORDER OF THE LEARNED CIT(A). HOWEVER, DUE TO TY PING ERROR ON ACCOUNT OF LARGE VOLUME OF ENTRIES IN TDS RETURN , WRONG PAN ONLY OF THESE FOUR PAYEES WAS MENTIONED IN THE ORIGINAL RETURN. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT LATER ON CORRECT PAN OF THESE PAYEES WAS MENTIONED IN THE REVISED TDS RETURN AND THE SAME WAS ACCEPTED BY THE ITANO.563/IND/2016: AY:2013-14 STATE BANK OF PATIYALA PAGE 4 OF 8 DEPARTMENT AND THE CREDIT HAS ALSO BEEN GIVEN TO TH ESE PAYEES BUT THE DEMAND FROM THE ASSESSEE FOR SHORT DEDUCTION OF TDS REMAINED TO BE THERE DUE TO NON-UP DATION. IT WAS CONTENDED THAT THE FINDING GIVEN IN PARA 4.2 AT PAGE 7 IS WRONG APPLICATION OF LAW. THE LEARNED CIT(A) HAS CONFIRMED SHORT DEDUCTION FOR WRONG FURNISHING OF P AN IN TDS RETURN (THAT TOO DUE TO TYPOGRAPHICAL MISTAKE O N THE PART OF THE BANK DUE TO VOLUME OF ENTRIES TO BE MAD E) WHEREAS SECTION 206AA IS APPLICABLE FOR NOT HAVING PAN. IT WAS ALSO SUBMITTED THAT PRAFUL KUMAR JAIN AND UJJAI N NAGRIK BANK ARE OLD ASSESSEES AND ARE FILING REGULA R INCOME TAX RETURNS AND HAVE FILED THE RETURN OF THE CONCER NED ASSESSMENT YEAR I.E. 2013-14. THUS, IT IS NOT A CA SE THAT PAN WAS NOT AVAILABLE AT THE TIME OF DEDUCTION OF T DS AND WAS OBTAINED LATERON. IT WAS ALSO SUBMITTED THAT TH E ASSESSEE DULY SUBMITTED ITS REVISED RETURN ON 8.6.2 013 WHEREIN THE CORRECT PAN WAS MENTIONED. COPIES OF RE VISED TDS RETURNS ARE PLACED AT PAGES 45 TO 52 OF THE PAP ER BOOK. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANC E ON THE DECISION IN THE CASE OF ONGC LTD., ITA NOS.1984 TO 1986/AHD/2016 DATED 22.9.2015, CIT VS. SUPERINTENDE NT OF ITANO.563/IND/2016: AY:2013-14 STATE BANK OF PATIYALA PAGE 5 OF 8 POLICE (2012) 349 ITR 0550) (P&H) WHEREIN IT WAS HE LD THAT DEFAULT IS ONLY WITH REGARD TO WRONG QUOTING OF PAN S OF 196 DEDUCTEES, SUCH DEDUCTEES QUOTED WRONG PAN. HOWEVER , CORRECT PAN WAS GIVEN AS SOON AS THE DEFAULT WAS BR OUGHT TO THE NOTICE OF THE ASSESSEE. HENCE, PENALTY ON THE G ROUND THAT THE ASSESSEE DEDUCTED TDS CORRECTLY AND REVISE D RETURN WAS FILED CORRECTLY IN COMPLIANCE WITH THE STATUTOR Y PROVISIONS, THERE WAS SUFFICIENT COMPLIANCE OF PROV ISIONS OF SECTION 139A REGARDING PAN. THE LEARNED COUNSEL FO R THE ASSESSEE ALSO RELIED UPON THE CASE OF VIJAY SIDDHRA J BASHTE; (2014) 66 SOT 0068 (PUNE). THE LEARNED COUNSEL FOR THE ASSESSEE ALSO TOOK SHELTER UNDER CIRCULAR NO. 75/20 10 OF CBDT WHICH SAYS THAT NON-QUOTING OF PAN BY THE DEDU CTEE IS CREATING PROBLEMS IN PROCESSING OF RETURNS OF IN COME AND IN GRANTING CREDIT FOR TAX DEDUCTED AT SOURCE LEADI NG TO DELAY IN ISSUING THE REFUNDS. 6. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PARTIES. IT IS THE CASE OF THE REVENUE THAT THE ASS ESSEE HAS NOT FURNISHED CORRECT PAN OF UJJAIN NAGRIK SAHKARI BANK, ITANO.563/IND/2016: AY:2013-14 STATE BANK OF PATIYALA PAGE 6 OF 8 PRAFULL KUMAR JAIN, SHELAV SHARMA AND SUBHASH SONI. PAN MENTIONED IN THE ORIGINAL TDS RETURN IN RESPECT OF THE ABOVE DEDUCTEES WAS NOT VALID/CORRECT. THEREFORE, THE AS SESSING OFFICER WAS JUSTIFIED IN ADOPTING THE TDS RATE OF 2 0% AS AGAINST 10%. HOWEVER, IT IS SEEN THAT THE ASSESSEE HAS FILED THE REVISED TDS RETURN BY QUOTING THE CORRECT PAN W HICH WAS ACCEPTED BY THE DEPARTMENT. WE FIND THAT IT IS NOT A CASE THAT PANS OF PAYEES AVAILABLE WITH THE ASSESSE E WERE NOT CORRECT BUT THIS IS A CASE WHERE DUE TO TYPOGRA PHICAL ERROR OR MUCH VOLUME OF ENTRIES IN TDS RETURN, WRON G PANS OF ONLY FOUR PAYEES WERE MENTIONED IN THE ORIGINAL TDS RETURN THOUGH THE PAYEES APPEAR TO HAVE SUPPLIED CO RRECT PANS TO THE ASSESSEE. IT IS ALSO NOTICED THAT UJJA IN NAGRIK SAHKARI BANK IS A COOPERATIVE BANK WHICH IS NOT EXP ECTED TO FURNISH WRONG PAN. SIMILARLY PRAFULL KUMAR JAIN AND SHELAV SHARMA ARE OLD ASSESSEES. THEREFORE, IT IS A CLERICAL AND TYPOGRAPHICAL ERROR WHILE FEEDING DATA IN TDS R ETURN WHICH LED TO WRONG APPLICATION OF TAX RATE OF 20% I N THE CASE OF FOUR DEDUCTEES WHEREAS THE ASSESSEE MIGHT HAVE P AID INTEREST TO A LARGE NUMBER OF PERSONS, THE ASSESSEE BEING A PUBLIC SECTOR BANK. SINCE THE MISTAKE OF QUOTING W RONG PAN ITANO.563/IND/2016: AY:2013-14 STATE BANK OF PATIYALA PAGE 7 OF 8 HAS BEEN RECTIFIED IN THE REVISED TDS RETURN FILED BY THE ASSESSEE WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT, THEREFORE, THERE IS NO JUSTIFICATION IN RAISING A D EMAND ON ACCOUNT OF SHORT DEDUCTION OF TDS. THE CASE LAWS CI TED (SUPRA) AS RELIED UPON BY THE LEARNED COUNSEL FOR T HE ASSESSEE ALSO SUPPORT THE CASE OF THE ASSESSEE. CON SIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ADO PTING THE RATE OF 20% AS AGAINST 10%. WE, THEREFORE, DELETE T HE DEMAND OF RS.1,26,502/- AND INTEREST THEREON OF RS.14,093/- AS MADE BY THE AUTHORITIES BELOW. 8. IN THE RESULT, THE APPEAL OF THE ASSESSE E IS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 3 RD AUGUST, 2016. SD/- SD/- (D.T.GARASIA) JUDICIAL MEMBER (O.P.MEENA) ACCOUNTANT MEMBER DATED : 3 R D AUGUST, 2016 COPY FORWARDED TO:- 1. THE ASSESSEE/2. THE AO CONCERNED/3. THE LD. PCIT CONCERNED 4. THE LD. CIT(A)/5. THE LD. DR, INDORE/6. THE GUAR D FILE ITANO.563/IND/2016: AY:2013-14 STATE BANK OF PATIYALA PAGE 8 OF 8 BY ORDER A.R. ITAT, INDORE