DCIT (TDS), Gurgaon V. The Sonipat Central Co-op Bank Ltd., Sonepat

ITA 706/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7515 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 3
• Next Hearing Date: 11-07-2016
• Assessment Year: misc
• Appeal Filed On: 04-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SRINIVASA RAO
• Keywords: Additional evidence; Non-deduction of tax
• Section: 133A; 201(1); 131

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC-3: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 706/DEL/2015 A.Y. : 2011-12 DCIT(TDS), GURGAON VS. THE SONIPAT CENTRAL C OOP BANK LIMITED, TIKA RAM ROAD, SONIPAT (HARYANA) (PAN: RTKT01805G) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. A SRINIVASA RAO, SR. DR ASSESSEE BY : SH. GAUTAM JAIN, CA DATE OF HEARING : 11-07-2016 DATE OF ORDER : 02-08-2016 O R D E R PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 25.11.2014 OF THE LD. CIT(A)-, ROHTAK RELEVAN T TO ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A), ROHTAK HAS ERRED IN DELETI NG THE DEMAND RAISED ON ACCOUNT OF SHORT DEDUCTION OF TDS OF RS. 26,59,099/- AND INTEREST THEREON OF RS. 3,42,52 7/- WITH RESPECT TO CASES WHERE FORM NO. 15G/15H WERE LATE SUBMITTED IN VIOLATION OF PROVISIONS OF SECTIO N 194A READ WITH SECTION 197A. ITA NO. 706/DEL/2015 2 2. THE LD. CIT(A), ROHTAK HAS ERRED IN ACCEPTING TH E CONTENTIONS OF THE ASSESSEE THAT IT HAD NOT WILFULL Y OR CONTUMACIOUSLY ACTED IN DISREGARD OF LAW AND THE MISTAKE WAS BONAFIDE, AND GIVING RELIEF ACCORDINGLY TO THE ASSESSEE BECAUSE ASSESSEE HAD NOT DEDUCTED THE TDS IN THE CASES WHERE INTEREST PAID / CREDITED DUR ING THE YEAR UNDER CONSIDERATION WAS IN EXCESS OF MAXIM UM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX. AS DISCUSSED IN THE PARA 8 OF THE AOS ORDER, THE ASSE SSEE DID NOT REPLY IN THIS REGARD WHICH SHOWS THAT THE CONDUCT OF THE ASSESSEE IS NOT ACCEPTABLE. 3. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD , DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIM E OF HEARING OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT A TDS INSPE CTION U/S 133A WAS CONDUCTED ON THE ASSESSEE PR ON 01/09/2011. DURING THE COURSE, OF INSPECTION, PART INFORMATION AND THE DOCUMENTS WERE FURNISHED BY THE ASSESSEE PR. THE SUMMON U/S 1 31 OF THE I. T. ACT, 1961 WERE ISSUED TO THE P.R. FOR FURNISHING THE. REMAINING INFORMATION ON 06/09/2011. THE PROCEEDINGS WERE ATTENDED FROM TIME TO TIME BY THE P.R. OR ITS REPRESENTATIVE. LATER ON, THE FINAL SHOW CAUSE NOTI CE DATED 24.1.2012 WAS SERVED UPON THE P.R. REQUIRING IT TO FURNISH REPLY BY 13/02/12. THE ASSESSEE PR ATTENDED THE OFFICE ON 21.2.2012 & AGAI N ON 28.2.2012 AND FURNISHED REPLY ON 28.02.2012. FROM THE PERUSAL OF DETAILS AND ITA NO. 706/DEL/2015 3 DOCUMENTS SUBMITTED BY THE ASSESSEE PR IT WAS NOTIC ED BY THE AO THAT THAT THE ASSESSEE PR HAS NOT DEDUCTED TAX AT SOURCE ON THE INTEREST TO ITS DEPOSITORS AS AND WHEN THE AMOUNT OF INTEREST CREDI TED/PAID ON THEIR TIME DEPOSITS/FDRS/MMCS ALCS EXCEEDED RS. 10000/-. FROM THE DETAILS SUBMITTED BY THE ASSESSEE PR, AO FURTHER OBSERVED T HAT THE ASSESSEE PR HAS CREDITED /PAID INTEREST ON TIME DEPOSITS/FDRS/M MCS A/CS IN EXCESS OF RS. 10000/- AS ON 30.09.2009, BUT NO DEDUCTION OF T AX AT SOURCE HAS BEEN MADE BY THE ASSESSEE PR ON THESE INTEREST PAYM ENTS AS PER THE PROVISION OF SECTION 194A OF THE I.T. ACT, 1961. DU RING THE COURSE OF INSPECTION PROCEEDING ON 01/09/2011, THE STATEMENT OF SHRI PURAN SINGH, BRANCH MANAGER, WAS RECORDED ON OATH AND WAS ASKED TO EXPLAIN AS TO WHY NO TDS HAS BEEN DEDUCTED IN ALL CASES WHERE INT EREST EXCEEDING RS, 10,000/- HAS BEEN PAID/CREDITED. THE ASSESSEE PR RE PLIED THAT TDS HAS NOT BEEN DEDUCTED IN ALL THE CASES AS THEY HAVE FUR NISHED THEM FORM NO. 15G/15H. FURTHER HE SUBMITTED THAT HE WILL PRODUCE THE COPIES OF FORM NO. 15G/15H FOR THE YEAR UNDER CONSIDERATION ON 6.9 .2011. IT WAS ALSO SUBMITTED THAT FORM NO. 15G/15H FOR THE FINANCIAL Y EAR 2010-11 WERE SUBMITTED TO THE O/O CIT, ROHTAK IN APRIL, 2011 VID E SHOW CAUSE NOTICE NO. ITO/TDS/SURVEY/2011-12/2702 DATED 24.1.2012, TH E ASSESSEE PR WAS AGAIN ASKED TO SHOW CAUSE AS TO WHY HE MAY NOT BE TREATED AS AN ASSESSEE IN DEFAULT ULS 201 (1) OF THE I. T. ACT 19 61 FOR NON-DEDUCTION OF TAX AT SOURCE ON INTEREST PAYMENTS TO DIFFERENT PER SONS FOR VIOLATION OF PROVISIONS OF SECTION 194A OF THE I.T. ACT, 1961. I N RESPONSE TO THE SAME, ASSESSEE FILED HIS REPLY. AFTER CONSIDERING THE RE PLY OF THE ASSESSEE, AO ITA NO. 706/DEL/2015 4 OBSERVED THAT ASSESSEE PR HAS FAILED TO DEDUCT TAX AT SOURCE ON THE INTEREST PAYMENTS MADE TO ITS DEPOSITORS AS PER THE PROVISIONS OF SECTION 194A OF THE I.T. ACT 1961. THE AO FURTHER OBSERVED THAT NEITHER THE PAN OF THE DEPOSITORS WERE MENTIONED ON THE FORM NO. 15 G/15H SUBMITTED BY THE ASSESSEE PR NOR PHOTOCOPIES OF THE PANS WERE AT TACHED ALONGWITH FORM NO. 15G/15H . FURTHER, NO COGNIZANCE OF THE FR ESH FORM NO. 15G/15H SUBMITTED BY THE ASSESSEE PR NOW CAN BE TAK EN. FURTHER THE ASSESSEE PR HAS NEITHER SUBMITTED ITS 26QA E-TDS RE TURN NOR ITS 26QA E- TDS RETURN ON NSDL SITE. HENCE, THE ASSESSEE PR IS TREATED TO BE AN ASSESSEE-IN-DEFAULT ULS 201(1) & 201(IA) OF THE LT. ACT 1961 FOR VIOLATING THE PROVISIONS OF SECTION 194A READ WITH SECTION 20 6AA OF THE LT. ACT 1961. HENCE THE ASSESSEE PR IS TREATED TO BE AN ASS ESSEE-IN-DEFAULT UNDER SECTION 201(1) & 201(IA) OF THE I.T. ACT 196 1 FOR ITS VIOLATION OF THE PROVISIONS OF THE SECTION 194A OF THE I.T. ACT 1961. THEREAFTER, THE AO PASSED THE ORDER U/S. 201(1) & 201(IA) OF THE IN COME TAX ACT, 1961 AND MADE THE FOLLOWING ADDITIONS:- SHORT DEDUCTION OF TAX U/S. 201(1) : RS. 36,29,54 7/- OF THE I.T. ACT, 1961 INTEREST U/S. 201(IA) : RS. 4,52,013/- TOTAL TAX AND INTEREST PAYABLE : RS. 40,81,560/- 3. AGGRIEVED BY THE AFORESAID ADDITION, ASSESSEE AP PEALED BEFORE THE LD. CIT(A), ROHTAK VIDE HIS IMPUGNED ORDER DATED 25.11.2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. ITA NO. 706/DEL/2015 5 4. AGAINST THE ORDER OF THE LD. CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE HEARING, LD. DR RELIED UPON THE ORD ER PASSED BY THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUND S OF APPEAL FILED BY THE DEPARTMENT AND REQUESTED THAT THE APPEAL OF THE REV ENUE MAY BE ALLOWED. 6. ON THE CONTRARY, LD. AUTHORISED REPRESENTATIVE O F THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE FOLLOWING CASES AND REQUESTED THAT BY FOLLOWING THE SAME, THE APPEAL OF THE REVENUE MAY BE DISMISSED. - 145 ITD 370 (MUM) KARWAT STEEL TRADERS VS. ITO - 46 SOT 71 (MUM) VIPIN P. MEHTA VS. ITO - 66 SOT (DEL) VIJAYA BANK VS. ITO - 152 ITD 497 (BANG.) CAPITAL PHARMA VS. ITO - 157 ITD 512 (CHENNAI) NARASUS SPINNING MILLS VS. ACIT - CIT VS. STATE BANK OF PATIALA REPORTED IN 277 ITR 315 (P&HC). 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS AVAILABLE WITH US, ESPECIALLY THE ORDER OF THE LD. FIRST APPE LLATE AUTHORITY. AFTER PERUSING THE IMPUGNED ORDER OF THE LD. CIT(A), I FI ND THAT LD. CIT(A) HAS ITA NO. 706/DEL/2015 6 ELABORATELY DISCUSSED THE ISSUES IN DISPUTE VIDE H IS IMPUGNED ORDER DATED 25.11.2014 VIDE PARA NO. 3 & 4 AT PAGE NO. 6 AND HE LD AS UNDER:- 3. THE SUBMISSIONS MADE BY THE APPELLANT, THE FACT S ON RECORD AND THE REMAND REPORT REVEAL THAT THE ISSUES IN THIS CASE ARE TWOFOLD. FIRSTLY, THE INCOME FROM FDR IS C OVERED BY THE CIRCULAR NO. 699 DATED 30.01.1995 AND CIRCULAR NO. 4/2002 DATED 16.07.2002. THE FIRST CIRCULAR REFERS TO ENTRIES WHOSE INCOME IS EXEMPT FROM INCOME TAX U/S 10(20) & (20A) OF THE IT ACT. IN THIS CASE INCOME FROM INTEREST ON FDR IS SQUARELY COVERED AS INCOME FROM OTHER SOURCES. CIRC ULAR NO.4 (DATED 16.07.2012) LAYS DOWN THAT NO TDS WAS REQUIR ED ON INTEREST PAID TO MUNICIPAL COMMITTEES. THE SECOND I SSUE RELATES TO THE FACT THAT THE APPELLANT DID NOT SUBM IT FORM NO. 15G/ 15H ON TIME. THE AO HAS, IN HIS REMAND REPORT OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND THAT THE CIRCULAR WAS NOT SUBMITTED AT THE TIME OF ASSESSMEN T PROCEEDINGS. THE APPELLANT HAD BEEN PREVENTED BY RE ASONABLE CAUSE FROM PRODUCING THE SAME AND THAT CANNOT BE TA KEN AS A GROUND NOT TO ADMIT THE SAME. I, THEREFORE, ADMIT T HE ADDITIONAL EVIDENCE FILED BY THE APPELLANT IN THE I NTEREST OF JUSTICE. AS FAR AS LATE SUBMISSIONS OF FORM NO 15G/15H IS CONCERNED, IT IS APPARENT THAT IN THE PRESENT CASE, THE APPELLANT DID NOT WILFULLY OR CONTUMACIOUSLY ACT IN DISREGARD OF ITS OBJECTION 'UNDER LAW. THE MISTAKE WAS BONAFIDE AND NO LOSS TO REVENUE OCCURRED FOR FAILURE TO FILE THE SAME. HOWEVER, A PERUSAL OF THE LIST OF INTEREST PAYMENTS REVEALS THAT THE APPELLANT WAS LIABLE FOR PAYMENT O F RS 1,88,250/- PLUS INTEREST OF RS. 23444.10 ON A/C OF FORM NO. ITA NO. 706/DEL/2015 7 15G/H OBTAINED IN CASES WHERE INTEREST PAID WAS IN EXCESS OF AMOUNT NOT CHARGEABLE TO TAX. THE ADDITION IS RESTR ICTED TO RS. 1,88,250/- ON ACCOUNT OF SHORT DEDUCTION OF TAX U/S 201 (1) AND RS 23444.10 BEING INTEREST U/S 201 (A). 4. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 7.1 AFTER GOING THROUGH THE RECORDS, I AM OF THE V IEW THAT REVENUE HAS DISPUTED THE DELETION OF LIABILITY OF RS. 30,01 ,627/- (CORRECT FIGURE RS. 29,90,256) ON ACCOUNT OF TDS OF INTEREST PAID IN RE SPECT OF DEPOSITORS FOR WHOM FORM 15G AND 15H WERE NOT FURNISHED AT THE TIM E OF SURVEY BUT CERTAINLY MADE AVAILABLE DURING THE APPELLATE / ASS ESSMENT PROCEEDINGS FOR WHICH, NO ADVERSE OBSERVATIONS MADE IN THE REMA ND REPORT OF THE AO. MOREOVER, THERE IS NO LOSS TO THE REVENUE. I FU RTHER FIND THAT THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE O F CIT VS. STATE BANK OF PATIALA REPORTED IN 277 ITR 315 HAS DEALT THE S IMILAR AND IDENTICAL ISSUE AND HELD AS UNDER:- PENALTY PROCEEDINGS HAD BEEN INITIATED BY THE AO FOR DELAY IN FURNISHING THE DECLARATIONS IN FORM NO. 15 H FURNISHED BY VARIOUS DEPOSITORS WITHIN THE TIME STIPULATED UNDER SECTION 197 A(1A) OF THE ACT. THE TRIBUNAL HAS FOUND THAT THE ASSESSEE WAS NOT REQUIR ED TO DEDUCT ANY TAX AT SOURCE UNDER SECTION 194A OF T HE ACT AS IN NONE OF THE CASES. INTEREST PAYABLE EXCEE DED RS. 10,000 AND, THUS, EVEN FORM NO. I5H WAS NOT REQUIRED TO BE FILED. THE TRIBUNAL ALSO NOTICED THA T EVEN ITA NO. 706/DEL/2015 8 THE DEPARTMENTAL REPRESENTATIVE ADMITTED THAT THERE WAS NO LOSS OF REVENUE INVOLVED IN THE MATTER. THE TRIBUNAL, THEREFORE, HELD THAT SINCE THE ASSESSEE W AS NEITHER REQUIRED TO DEDUCT TAX AT SOURCE NOR ANY LO SS OF REVENUE HAD OCCURRED ON THIS ACCOUNT THE DEFAULT COMMITTED BY THE ASSESSEE IN NOT FILING FORM NO. 15 H RECEIVED BY IT FROM VARIOUS DEPOSITORS WITHIN THE STIPULATED PERIOD, WAS ONLY OF TECHNICAL NATURE FOR WHICH NO PENALTY UNDER SECTION 272A(2)(F) OF THE ACT WAS LEVIABLE. IN SUPPORT OF ITS CONCLUSIONS, THE TRIBUN AL PLACED RELIANCE ON THE JUDGMENT OF THE SUPREME COUR T IN HINDUSTAN STEEL LTD. V STATE OF ORISSA [1972] 83 ITR 26. HAVING PERUSED THE ORDER OF THE TRIBUNAL, WE AR E SATISFIED THAT IN THE LIGHT OF THE FACTUAL POSITION STATED BY THE TRIBUNAL, NO CASE FOR INTERFERENCE IS MADE O UT. IT IS CLEAR THAT THE DEFAULT IN THE PRESENT CASE IS ME RELY OF TECHNICAL OR VENIAL IN NATURE.' 7.2 I ALSO FIND THAT REVENUE HAS NOT CHALLENGED THE ADMISSION OF ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL AND THEREFO RE, ONCE THE ADMISSION OF ADDITIONAL EVIDENCE HAS NOT BEEN CHALLENGED, THE SOLITARY ISSUE WHICH REMAINS FOR CONSIDERATION IS WHETHER DELAY IN FURNI SHING OF FORM 15G TO THE DEPARTMENT CAN BE A GROUND TO IMPOSE LIABILITY UNDER SECTION 201(1) OF THE ACT ON ACCOUNT OF ALLEGED DEFAULT FOR NON-A PPLICATION OF TDS UNDER SECTION 194A READ WITH SECTION 197 OF THE ACT, WHIC H AS SUBMITTED ABOVE ITA NO. 706/DEL/2015 9 IN LIGHT OF THE JUDGMENT IS ABSOLUTELY NOT TENABLE. IN VIEW OF THE AFORESAID DISCUSSIONS AND PRECEDENT RELIED UPON, AS AFORESAID, I AM TO THE CONSIDERED VIEW THAT THE LD. CIT(A) HAS PASSED A W ELL REASONED AND SPEAKING ORDER AND RIGHTLY HELD THAT ASSESSEE DID N OT WILFULLY OR CONTUMACIOUSLY ACT IN DISREGARD OF ITS OBJECTION UN DER THE LAW AND THE MISTAKE WAS BONAFIDE AND NO LOSS TO REVENUE OCCURRE D FOR FAILURE IN SUBMISSION OF THE FORM 15G/15H IN TIME. HENCE, THE ORDER OF THE LD. CIT(A) DOES NOT REQUIRE ANY INTERFERENCE ON MY PART , THEREFORE, I UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 02-08-2016. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 02/08/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES