ITO (TDS), Gurgaon V. M/s The Gurgaon Central Coop. Bank, Vill. Wazirabad, Gurgaon

ITA 6706/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4426 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: PRASHANT SHARMA
• Section: 201(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'G', NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 6706/DEL/2015 ASSESSMENT YEAR: 2012-13 ITO (TDS), VS. THE GURGAON CENTRAL COOP. BA NK, 5 TH FLOOR, UDYOG VIHAR, VILL. WAZIRABAD, GURGAON PHASE-V, GURGAON (PAN:AAALT0271A) (APPELLANT) (RESPONDENT) ITA NO. 6708/DEL/2015 ASSESSMENT YEAR: 2012-13 ITO (TDS), VS. THE GURGAON CENTRA L COOP. BANK, 5 TH FLOOR, UDYOG VIHAR, VILL. BADASHPUR, GURGAON PHASE-V, GURGAON PAN:AAALT0271A) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. KAUSHLENDRA TI WARI, SR. DR ASSESSEE BY : SH. PRASHANT SHARMA, CA ORDER PER H.S. SIDHU, JM THE DEPARTMENT HAS FILED THESE 02 APPEALS WHICH AR E EMANATE FROM THE COMMON ORDER DATED 14.10.2015 OF THE LD. CIT(A )-2, GURGAON BOTH PERTAINING TO A.Y. 2012-13. SINCE THE ISSUES INVO LVED IN THESE APPEALS ARE COMMON AND IDENTICAL, HENCE, THE APPEALS WERE H EARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 2. WE DEAL WITH ITA NO. 6706/DEL/2015 (AY 2012-13) WHEREIN THE FOLLOWING IDENTICAL AND COMMON GROUNDS HAVE BEEN R AISED. THE LD. CIT(A) ERRED IN LAW AND FACTS BY CONSIDER ING THE APPELLANT HAS COOPERATIVE SOCIETY AND NOT LIABLE TO DEDUCT TDS IN ACCORDANCE TO SECTION 194(3)(V) OF THE I.T. ACT , 1961. 1. THE LD. CIT(A) ERRED IN LAW AND FACTS BY IGNORING T HE FACT THAT THOUGH APPELLANT IS CO-OP SOCIETY BUT ENG AGED IN THE BUSINESS OF BANKING AND THEREFORE NOT EXEMPT U/S. 1 94(3)(V) AND THUS THE LD. CIT(A), GURGAON HAS ERRED IN DELET ING THE DEMAND RAISED ON ACCOUNT OF SHORT DEDUCTION OF TDS OF RS. 88,83,288/- AND INTEREST THEREON OF RS. 27,09,403/- . 2. THE LD. CIT(A), GURGAON HAS ERRED IN DELETING THE DEMAND RAISED ON ACCOUNT OF SHORT DEDUCTION OF TD S OF RS. 16,686/- AND INTEREST THEREON OF RS. 5,006/- WITH R ESPECT TO CASES WHERE FROM NO. 15G/15H WERE NOT SUBMITTED TO THE CIT(TDS), CHANDIGARH ON OR BEFORE 7 TH DAY OF WEEK, NEXT FOLLOWING THE MONTH IN WHICH DECLARATION IS FURNISH ED HIM (SEC. 197A AND NOTE 28C). 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND / OR, MODIFY ANY OF THE GROUNDS OF APPEAL AT OR BEFOR E THE HEARING OF THE APPEAL. 3 2.1 IN ANTHER APPEAL, IDENTICAL ISSUES ARE INVOLVE D AND SIMILAR GROUNDS HAVE BEEN RAISED, THE ONLY DIFFERENCE IS IN THE FIG URES INVOLVED, HENCE, THE GROUNDS ARE NOT REPRODUCED HERE FOR THE SAKE OF BREVITY. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE BA NK HAS FILED ITS TDS RETURNS UNDER TAN: RTKT01337A. THE TDS INSPECTION W AS CONDUCTED AT THE HEAD OFFICE OF THE GURGAON CENTRAL COOP. BANK, GURGAON ON 07.11.2013. DURING THE COURSE OF INSPECTION, IT WAS FOUND THAT VARIOUS BRANCHES OF THIS BANK HAVE NOT DEDUCTED TDS U/S 194 A ON THE AMOUNT OF INTEREST PAID ON TERM DEPOSITS WHICH WAS REQUIRED T O BE MADE. DURING INSPECTION IT WAS ALSO NOTICED THAT THE DEDUCTORS H AD ALLOWED SUBSTANTIAL AMOUNT OF INTEREST TO PRIMARY AGRICULTURAL SOCIETI ES (PACS) AND OTHER SOCIETIES/INSTITUTION DURING THE F.Y. 2011-12 AND S UBSEQUENT YEARS BUT DID NOT MAKE TDS ON SUCH PAYMENTS. THEREFORE, A SHO W CAUSE NOTICE U/S 201(1)/201(1A) OF THE ACT WAS ISSUED ON 29.11.2013 AND IT WAS ASKED TO FILE LEDGERS/DETAILS OF ALL EXPENSES DEBITED FOR F. Y. 2011-12 ALONGWITH DETAILS/EVIDENCES OF TDS MADE/DEPOSITED ON SUCH EXP ENSES. IN RESPONSE TO THIS NOTICE DEDUCTOR DID NOT FILE ANY REPLY/SUBM ISSION. AGAIN FRESH NOTICE VIDE LETTER F.NO. ITO/(TDS)/GGN/2013-14/774 DATED 21.1.2014 WAS ISSUED AND ASKED TO FILE THE REQUIRED INFORMATI ON AND FIXED THE CASE FOR 27.01.2014. IN RESPONSE TO THIS NOTICE, THE A.R . OF THE ASSESSEE APPEARED AND FILED POWER OF ATTORNEY AND CERTAIN IN FORMATION. AFTER EXAMINATION OF THE SAME, VIDE AOS LETTER F.NO. ITO /(TDS)/GGN/2013- 14/814 DATED 31.01.2014, A FURTHER NOTICE WAS ISSUE D TO FURNISH THE DETAILS OF VARIOUS EXPENSES DEBITED / PAID DURING T HE YEAR TOTAL AMOUNT 4 DEBITED/PAID DURING THE YEAR. IN RESPONSE TO THE SA ID NOTICE, ASSESSEE BANK FILED INFORMATION VIDE ITS LETTER DATED 5.2.20 14 AND AFTER PERUSING THE SAME, IT WAS FOUND BY THE AO THAT ASSESSEE BAN K HAS PAID TOTAL INTEREST OF RS. 5,83,00,389/- DURING THE FY 2011-1 2 AND IT WAS FURTHER NOTICED THAT INTEREST OF RS. 4,44,16,410/- WAS SHOW N PAID TO PACS WHEREUPON NO TDS WAS MADE, AS A RESULT, THE ASSESSE E BANK FAILED TO DEDUCT THE TAX AT SOURCE U/S. 194A ON PAYMENT OF IN TEREST ON DEPOSITS FROM PACS AND OTHER SOCIETIES AND ALSO FAILED TO D EPOSIT IN THE CENTRAL GOVERNMENT ACCOUNT SO FAR. THE BANK WAS REQUIRED T O SHOW CAUSE AS TO WHY NOT THE ASSESSEE BANK BE TREATED AS PERSON IN D EFAULT U/S. 201(1)/201(1A) OF THE I.T. ACT, 1961 AND IN RESPONS E THEREOF, THE ASSESSEE SUBMITTED ITS REPLY DATED 24.2.2014 STATI NG THEREIN THAT TAX HAS NOT BEEN DEDUCTED ON INTEREST TO PRIMARY AGRIC ULTURAL CREDIT SOCIETIES (PACS) AND KEEPING IN VIEW THE CLAUSE (V) OF SUB-SECTION 3 OF SECTION 194A OF INCOME TAX ACT, WHICH STATES THAT: THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APPLY T O SUCH INCOME CREDITED OR PAID BY A COOPERATIVE SOCIETY TO A MEMBER THEREOF OR TO ANY OTHER COOPERATIVE SOCIETY. 3.1 IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT T HE ASSESSEE BANK IS A BRANCH OF COOPERATIVE SOCIETY REGISTERED UNDER TH E PUNJAB COOPERATIVE SOCITIES ACT, 1912 WITH REGISTRAR OF COOPERATIVE SO CIETIES, PUNJAB ON 27.2.2015. THE PACS FROM WHICH, WE HAVE ACCEPTED D EPOSITS IS OUR MEMBER AS WELL AS A COOPERATIVE SOCIETY AND RELIED UPON THE CIRCULAR NO. 5 9/2002 DATED 11.9.2002 ISSUED BY THE INCOME TAX DEP ARTMENT. AFTER CONSIDERING THE ABOVE SUBMISSIONS, THE AO WAS NOT S ATISFIED WITH THE RELY. ACCORDINGLY, AO HELD THAT AS THE ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF BANKING, IT IS COVERED U NDER THESE SPECIFIC CLAUSES AS HAS BEEN HELD BY THE ITAT, PUNE BENCH IN THE CASE OF BHAGANI NIVEDITA SAHAKARI BASNK LTD. VS. ACIT 87 ITD 579 WH EREIN THE ITAT HELD THAT THE TERM COOPERATIVE SOCIETY MENTIONED IN SE CTION 194A(3)(V) IS TO BE INTERPRETED AS COOPERATIVE SOCIETY OTHER THAN CO OPERATIVE BANK. AO FURTHER HELD THAT SINCE THE PERSON RESPONSIBLE HAS FAILED TO FURNISH THE DOCUMENTARY EVIDENCE IN RESPECT OF THE SAME TO THE CONCERNED CIT, IT IS CONCLUDED THAT THE PERSON RESPONSIBLE HAS FAILED TO COMPLY WITH THE PROVISIONS OF THE I.T. ACT, 1961, HENCE, CREDIT FOR THE AMOUNT OF INTEREST CLAIMED TO BE COVERED BY FORM 15G/15H IS NOT BEING ALLOWED. ACCORDINGLY, THE DEDUCTOR WAS HELD TO BE IN DEFAULT U/S. 201(1)/201(1A) IN RESPECT OF AMOUNT OF RS. 1,66,874/- AND ACCORDI NGLY, TOTAL DEMAND PAYABLE WAS COMPUTED US 201(1) RS. 88,99,974/- AND U/S. 201(1A) RS. 27,14,409/-, THUS TOTALING TO RS. 1,16,14,383/- VID E ORDER DATED 03.3.2014 PASSED U/S. 201(1) & 201(1A) OF THE INCO ME TAX ACT, 1961. 4. AGAINST THE ASSESSMENT ORDER DATED 03.3.2014, TH E ASSESSEE APPEALED BEFORE THE LD. CIT(A-2), GURGAON, WHO VIDE HIS COMM ON IMPUGNED ORDER DATED 14.10.2015 HAS ALLOWED THE APPEAL OF THE ASSE SSEE. AGGRIEVED WITH THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL B EFORE THE TRIBUNAL. 6 5. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 6. ON THE OTHER HAND, LD. A.R. OF THE ASSESSEE REL IED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HAS PASSED A W ELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. APROPOS GROUND NO. 1 RELATING TO ISSUE WHETHER THE PROVISIO NS OF SECTION 194A(3)(V) APPLY TO COOPERATIVE SOCIETY INVOLVED IN THE BUSINESS OF BANKING IS CONCERNED, WE FIND THAT THIS ISSUE IS SQ UARELY COVERED BY THE DECISION OF THE ITAT, DELHI PASSED IN ITA NO. 5324 /DEL/2013 FOR AY 2012-13 IN THE CASE OF ALMORA URBAN COOPERATIVE BAN K LTD. VS. ITO(TDS), KASHIPUR, WHEREIN IT WAS HELD THAT THE PR OVISIONS OF SECTION GIVE BLANKET EXEMPTION TO THE INTEREST PAID BY ANY COOPERATIVE SOCIETY TO ITS MEMBERS AND THAT NEITHER SECTION 2(19) NOR SEC TION 194A(3)(V) CLAIMS ANY DISCRIMINATION BETWEEN THE COOPERATIVE S OCIETIES CARRYING ON BANKING BUSINESS AND OTHER COOPERATIVE SOCIETIES. T HEREFORE, THE LD. CIT(A) HAS RIGHTLY FOLLOWED THE AFORESAID DECISION AND DELETED THE DEMAND IN DISPUTE, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME AND REJECT THE GROUND NO. 1 RAISED BY THE REVENUE. 7.1 APROPOS GROUND NO. 2 RELATING TO DELETION OF DE MAND RAISED ON ACCOUNT OF SHORT DEDUCTION OF TDS OF RS. 16,686/- A ND INTEREST THEREON OF RS. 5,006/- WITH RESPET TO CASES WHERE FORM NO. 15G /15H WERE NOT SUBMITTED TO THE CIT(TDS), CHANDIGARH ON OR BEFORE 7 TH DAY OF THE WEEK, NEXT FOLLOWING THE MONTH IN WHICH DECLARATION IS FU RNISHED TO HIM IS 7 CONCERNED, WE NOTE THAT AS PER THE ASSESSMENT ORDE R THE DEMAND HAS BEEN RAISED AS THE ASSESSEE HAD FAILED TO FURNISH T HE DOCUMENTARY EVIDENCE IN RESPECT OF SUBMISSION OF FORM 15G/15H T O THE CONCERNED CIT, INCOME TAX DEPARTMENT. IT IS NOT DISPUTED THAT TH E ASSESSEE OBTAINED FORM 15G/15H IN RESPECT OF THE PERSON TO WHOM THE I NTEREST PERTAINING TO THE DEMAND RAISED IN THE GROUND WAS PAID. IT IS AL SO A FACT THAT THE ASSESSEE HAD CLAIMED THAT THE FORMS WERE SENT TO TH E INCOME TAX DEPARTMENT ALBEIT NOT TO THE CONCERNED CIT OF THE I NCOME TAX DEPARTMENT. THE AO HAS NOT CONTROVERTED THIS CLAI M OF THE ASSESSEE BUT HAS REJECTED THE SAME ON THE GROUND THAT THE FORMS WERE NOT SENT TO THE CONCERNED CIT. WE FURTHER NOTE THAT ASSESSEE HAD CO NTENDED THAT BEING A COOPERATIVE BANK WORKING BASICALLY IN RURAL AREAS, IT HAD NO IDEA ABOUT CIT HAVING JURISDICTION OVER TDS MATTERS. IN VIEW O F THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAD RECEIVED FORM 15G/15H FROM ALL THE PERSONS TO WHOM THE INTEREST WAS PAID AND THE ASSES SEE HAD ALSO SENT THESE FORMS TO THE INCOME TAX DEPARTMENT. NOT SEND ING THESE FORMS SPECIFICALLY TO CIT, TDS IS A MERE TECHNICAL BREACH . THEREFORE, THE LD. CIT(A) HAS RIGHTLY HELD THAT ASSESSEE WAS NOT REQUI RED TO DEDUCT TDS ON INTEREST SO PAID, HENCE, THE DEMAND RAISED BY THE AO WAS ACCORDINGLY DELETED, WHICH DOES NOT NEED ANY INTERFERENCE ON O UR PART, THEREFORE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND REJECT THE GROUND NO. 2 RAISED BY THE REVENUE. 8 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE RE VENUE STAND DISMISSED. ORDER PRONOUNCED ON 27/09/2017. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 27/09/2017 'SRBHATNAGAR' COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES