UNION BANK OF INDIA,FARIDABAD V. DCIT, TDS CIRCLE, GURGAON

ITA 2051/DEL/2023

AI Insights

The case involves Union Bank of India appealing against the order of the National Faceless Appeal Centre (NFAC) which pertained to the assessment year 2014-15. The appeal was directed against the demand created under sections 201 and 201(1A) of the Income-tax Act, 1961, amounting to Rs. 45,01,496. The bank contested the demand on several grounds, including the erroneous treatment of certain payees who had submitted Form 15G/15H, and the incorrect application of TDS on interest payments to government entities which are exempt. The CIT(A) had partly allowed the appeal, leading to the current appeal before the tribunal. The tribunal's decision focused on procedural fairness, allowing the bank to submit additional evidence and restoring the matter to the AO for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 22859 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR AVIKAL MANU
• Assessee Lawyers: PALAK MITTAL
• Keywords: Additional evidence; TDS
• Section: 201; 194A; 201(1)

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI BEFORE SH.PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SH. SUDHIR KUMAR, JUDICIAL MEMBER ITA No.2051/Del/2023 Assessment Year: 2014-15 Union Bank of India 58, Neelam Bata Road, NIT Faridabad, Haryana 121001 PAN No.RTKU00370G Vs. DCIT TDS Circle Gurgaon (APPELLANT) (RESPONDENT) Appellant by Sh. Palak Mittal, CA Respondent by Sh. Kumar Avikal Manu, Sr. DR. Date of hearing: 14/01/2025 Date of Pronouncement: 12/02/2025 ORDER PER SUDHIR KUMAR, JM: This appeal by the assessee is directed against the order of the National Faceless Appeal Centre [hereinafter referred to as “NFAC”] vide order dated 18.05.2023 pertaining to A.Y. 2014-15 pertaining to arises out of the assessment order 2 dated30.03.2021u/s 201(1) / 201(1A) of the Income – tax Act, 1961 [hereinafter referred as ‘the Act’]. 2. Aggrieved by the order of the Ld. CIT(A) the assessee is in appeal before us by raising the following grounds: 1) On the facts and circumstances of the case, the Ld. DCIT(TDS) has erred on facts and in law in creating demand of Rs. 45,01,496 under section 201/201(1A) even the authorities below ought not to have treated the assessee in default under section 201 read with section 201(1A) of the Act in respect of such payees who had furnished Form 15G/15H of the Act and consequently the TDS demand under section 201 and 201(1A) of the Act is arbitrary, unjust and bad in law. (2) On the facts and in the circumstances of the case, the learned DCIT(TDS) has erred on facts and in law in holding the appellant in default apart from interest paid to persons who had filed Form No. 15G/15H, Out of the 11483411 interest paid without deduction of TDS most of the interest is paid to Government i.e. Commissioner Central Excise, Delhi amounting to Rs. 47,02,715 and Institute of Management of Industrial Training Institute (Women) amounting to Rs. 21,49,301, accordingly, as per 3 the provisions of Section 194A r.w.s 196 of Income Tax Act 1961, no TDS was required to be made as all the recipients of interest are Government which are exempted from TDS. (3) On the facts and circumstances of the case, the Ld. DCIT(TDS) has erred on facts and in law in creating demand of Rs. 45,01,496 under section 201/201(1A) even in the absence of any income-tax demand outstanding against the payee or any action taken against the payee by the Department, the Assessing Officer has no valid jurisdiction u/s 201(1) and u/s 201(1A) of the Income-tax Act, 1961 (the Act), to hold the appellant as assessee in default and consequently the recovery of amount determined by the Assessing Officer holding the assessee in default on account of non-deduction of TDS, is invalid, unjust and bad in law. 4. The learned DCIT(TDS) did not appreciate the fact that non submission of Form 15G/15H to the jurisdictional CIT is only a technical breach and as such the appellant cannot be construed as an assessee in default. 3. The brief facts of the case are that the assessee is a bank having a branch at Neelam Batra Road Faridabad. During the 4 course of its financial business, the assessee having deposit on which the interest is paid. The TDS has been deducted time to time by the assessee u/s 194 A of the Act on the interest and deposited with the Government Account. The assessee has filed its TDS returns. A notice u/s 201(1) /201(1A) of the Act was issued for the F.Y. 2013-14, 2014-15 &2015-16. Subsequently proceedings in respect of F.Y. 2013-14 was started and notices u/s 201(1)/ 201(1A) of the Act were issued. The assessee has filed the reply and after considering the reply submitted by the assessee the Deputy Commissioner of Income tax TDS Circle Gurgaon has found that the assessee has not deducted the TDS on the interest amount of Rs 1,14,83,411/-, u/s 194A of the Act and raised the demand of Rs 45,01,496/-. 4. Aggrieved the order of the Assessing officer the assessee has filed the appeal before the Ld. CIT(A), who vide his order dated 18-05-2023 has partly allowed the appeal against which the assessee is in appeal before the tribunal. 5 5. The learned AR of the assessee has submitted that depositors have furnished the declaration in the prescribed manner requesting the assessee not to deduct the tax at source and the assessee is under statutory obligation not to deduct the tax. The assessee has filed the details of Form no. 15G/15H submitted by the depositors. He further submitted that the file of the 34 Form No 15G/15H was not uploaded before the Ld. CIT(A), due to technical glitch. He also submitted that assessee wants to submit the remaining 34 form. The assessee has also filed the application to accept the additional evidence under rule 29 of Income tax Rules in the appeal. 6. Ld DR has supported the orders of the lower authorities and sought the dismissal of the appeal. 7. Perusal of the order of the Ld. CIT(A), it reveals that 52 Forms of the customers submitted by the assessee were considered by the Ld. CIT(A) and directed the AO to deduct the 6 amount of Rs 96,64,547/-. The assessee has not uploaded the rest form due to technical glitch, therefore the application filed by the assessee to file the additional evidence under rule 29 of Income tax Rules is allowed. The Form No 15H/15G filed by the assessee is to be verified by the AO. In the interest of justice and fair play one more opportunity to be given to the assessee to substantiate his case. Hence, without going into merits of the case the appeal of the assessee is allowed for statistical purpose and the matter is restored before the AO who will decide the matter in accordance with law after given the opportunity of being heard to the assessee. 8. In the result the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 12.02.2025. Sd/- Sd/- (PRADIP KUMAR KEDIA ) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER *Neha, Sr. PS* Date: 12.02.2025 "