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Facts
The appellant bank failed to deduct TDS on interest paid to SRA and MHADA, claiming exemption. The AO invoked sections 201 and 201(1A), leading to a demand, and completed the assessment under section 144 due to no response. The CIT(A) dismissed the bank's appeal.
Held
The Tribunal, acknowledging the appellant as a Government-owned PSU Bank and its plea of lack of personnel expertise, granted one more opportunity to file details before the AO. The issue was remitted to the AO for a fresh assessment.
Key Issues
Whether the appellant bank is liable for TDS on interest paid to SRA and MHADA, and whether the AO properly assessed the demand without sufficient response from the bank.
Sections Cited
133B, 201, 201(1A), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “F” Bench, Mumbai.
Before: Shri Sandeep Gosain (JM) & Shri Omkareshwar Chidara (AM)
In the above cited appeal of the Bank, a spot verification was carried out by Income Tax Department under section 133B of the Income Tax Act to verify whether TDS was deducted on the interest paid on Fixed Deposits made by Slum Rehabilitation Authority (SRA), Maharashtra Housing and Area Development Authority (MHADA). It was found by the Department that the appellant bank has not deducted the TDS and the reason mentioned by the appellant bank is that these Institutions are established under a State Act and hence TDS provisions are not applicable. The Ld. AO wanted the Bank to provide evidence that these Institutions are established by which Act of State and no response was filed by appellant. Since no required details were filed, the Ld. ITO, TDS invoked the provisions of section 201 and 201(1A) of the Act and raised a demand of Rs. 48.47 lakh. As there is no response, the Ld. AO completed the assessment under section 144 of the Act.
2 Syndicate Bank Aggrieved by the additions made under section 201 and 201(1A) of the Act, the appellant bank filed an appeal before Ld. CIT(A). This first appellate authority has given three opportunities to file required details, and as there was no response by Bank the appeal of appellant was dismissed by Ld. CIT(A).
Before ITAT, the appellant bank pleaded that the concerned branch of Bank was not equipped with personnel knowing the provisions of Income Tax Act and there was no response. During the hearing before the ITAT, Ld. AR of the appellant has requested to give one more opportunity to file all required details as now the Branch Officer has already written letter to the Head Office to furnish proper response.
The Ld. DR opposed the plea of appellant Bank.
Heard both sides. The appellant being a Government owned PSU Bank, it was decided by the Bench to give one more opportunity to the Bank to file required details before the AO. As there was no proper response before the AO also, the appellant is directed to file all the details before the AO and AO is directed to pass a fresh order based on the material on record. In view of the same, the issue is remitted to the file of Ld. AO.
The appeal of appellant Bank is allowed for statistical purposes.
Order pronounced in the open Court on 27/11/2025.