THE SALEM URBAN COOP BANK LTD.,SALEM vs. DCIT, CIRCLE-1(1), SALEM

The assessee is a Co-operative Bank Ltd. engaged in the banking business. The ITO–TDS, in the order passed u/s. 201(1)/201(1A) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), has raised a demand of Rs. 1,98,84,649/- for non deduction of TDS on interest paid for more than Rs.10,000/ in F.Y 2017-18 or failure to upload Form 15G/15H on the e-filing portal incase tax was not deducted. The A.O. noted in the order that a survey u/s 133(2A) of the Act was conducted on 13.02.2019 regarding compliance with the new rule requiring online filing of Form 15G/15H through the e-filing portal in cases where tax was not deducted. The assessee submitted that Form 15G/15H relating to F.Ys. 2017–18 along with other details, had been furnished physically to the Department, and that those forms were still lying with the Department. Hence, the assessee was unable to upload the details online on the e-filing portal. It was explained that the forms could not be uploaded since the physical copies were already with the Department and subsequently there was technical glitch in uploading the forms. On appeal, the Ld. Addl. CIT(A)

1. confirmed the order and declined to set aside matter to A.O stating that he does not have power to set aside u/s 251(1A) of the Act.

At the outset, the Learned Authorized Representative (Ld. A.R.)

submitted that there is no default in deducting the tax on interest as it has obtained Form 15G/15H in physical form for not deducting the TDS. The Ld AR submitted that the forms could not be uploaded on the portal because the physical copies had already been submitted before the Income-tax Department and subsequently they have been uploaded, but acknowledgment receipt was not generated by system.

The Ld. Departmental Representative (DR), on the other hand, relied on the orders of the lower authorities. He submitted that the assessee was mandatorily required to upload the forms online and that mere submission of paper forms does not absolve the assessee of its statutory liability.

We have heard the rival submissions and perused the materials available on record. The assessee has contended assessee has obtained Form 15G/15H from the parties whom interest of more than Rs.10,000/- has been made, in physical form and has also been submitted to the office of the Income-tax Department, Salem. The Ld A.R therefore contended that assessee cannot be treated as assessee in default for non deduction of TDS. The A.O has treated the assessee in default as Form 15G/Form15H has not been filled online. The assessee has now filed additional evidence in support of its claim that Form 15G/15H has been subsequently e-filed and it has now received acknowledgment for having filled the same. We admit the additional evidences in the interest of justice and restore the matter to the file of the A.O. to verify whether substantial compliance of section 197A(2) of the Act has been made by uploading the Form 15G/15H online. The assessee is directed to submit all the evidences in support of its claim before A.O, who will not treat assessee in default in case it is found that assessee has e-filed Form-15G/15H and substantial compliance of section 197A has been made.

In the result, the appeal filed by the assessee is allowed for statistical purposes.