KAD STEEL ROLLING MILLS,AHMEDABAD vs. INCOME TAX OFFICER, WARD - 2, TDS, ASHRAM ROAD,

The brief facts of the case are that the Assessing Officer (TDS) initiated proceedings under section 201(1) and 201(1A) of the Income-tax Act, 1961 (Act) on the assessee based on information received from ITO, Ward 3(2)(9), Ahmedabad. During the assessment of M/s Kad Steel Rolling for A.Y. 2013–14, it was found that the assessee had paid interest of Rs. 4,29,244 during the financial year 2012–13 to various parties but had not deducted TDS on these payments. The assessee submitted that the assessee had received Form No. 15G/H from the recipients of interest to justify non- deduction of TDS. However, the Assessing Officer (TDS) observed that these forms were not submitted to the Income Tax Department within the statutory timeline. Accordingly, the assessee was asked to submit the copies of Form No. 15G/H and supporting documents. In response, the assessee submitted the required forms along with audit reports and ledger accounts, and also produced proof that the forms had been submitted on 03.07.2013 with the concerned Officer. However, the Assessing Officer (TDS) noted that these Form No. 15G/H has been submitted by the assessee well beyond the due date of 07.04.2013. Accordingly, the AO held that the late submission of Form No. 15G/H meant the assessee could not be exempted from the obligation to deduct tax at source, and accordingly, treated the assessee as an assessee-in-default under section 201(1) of the Act. Interest was also levied under section 201(1A) of the Act for the delay. The Assessing Officer computed the total demand at Rs. 83,790/-, comprising Rs. 42,924/- as TDS and Rs. 40,866/- as interest.

Aggrieved by this order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). During appellate proceedings, the Kad Steel Rolling Mills vs. ITO Asst. Year –2013-14 - 3–

Before us, the Counsel for the assessee submitted Form No. 26A i.e. C.A. Certificate certifying that the payee / recipient of interest income has offered this interest income in it’s return of income. The payees / recipients have taken into account the amount paid by the assessee under the head “income from other sources” in their respective returns of income. The Counsel for the assessee submitted that since the payees / recipients have already offered this income in their return of income, the assessee cannot be held to an assessee-in-default in terms of Section 201 and 201(1A) of the Act, since the income has already been offered to tax by the respective recipients / payees in their return of income. Further, the Counsel for the also submitted that the assessee was in receipt of Form 15GH/H from the recipients / payees and the same had also been deposited with the concerned Tax Authorities, Asst. Year –2013-14 - 4–

In response, Ld. DR. placed reliance on the observations made by the CIT(A) and Assessing Officer in their respective orders.

We have heard the rival contentions and perused the material on record.

In the case of Bhushan Logistics (P.) Ltd. vs. Income-tax-Officer [2022] 140 taxmann.com 521 (Mumbai - Trib.), the ITAT held that where assessee made payment of interest to non-banking financial corporations without deduction of tax at source and Assessing Officer disallowed interest under section 40(a)(ia), as assessee submitted before Tribunal by way of additional evidence copies of Form No. 26A to prove that such NBFC had taken into account sum received as interest from assessee while computing its taxable income, issue was to be remanded to Assessing Asst. Year –2013-14 - 5–

Accordingly, in light of the above decision, we are of the considered view that since the Counsel for the assessee has submitted additional evidence in the form of Form 26A in support of the fact that the recipient had duly offered the interest income in their respective return of income, we set-aside the matter to the file of Assessing Officer to verify the contents of CA Certificate in Form 26A submitted by the assessee before us. In case, it is found that the recipients / payees have duly offered the interest income in their respective returns of income, then in light of the above decisions, we are of the considered view that the assessee cannot be held to be an assessee-in- default and hence, the Assessing Officer is directed to give appropriate relief of the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 25/08/2025 (DR. BRR KUMAR) JUDICIAL MEMBER Ahmedabad; Dated 25/08/2025