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Facts
The assessee-bank did not deduct TDS on interest paid to certain state government entities, claiming exemption under Section 194A(3)(iii)(f) based on a notification. The AO raised demands for non-deduction and interest. The CIT(A) dismissed the appeal due to delay.
Held
The Tribunal held that the entities were covered under the exemption notification and that separate notification for each was not required. They also noted that similar past cases were accepted by the department.
Key Issues
Whether the exemption under Section 194A(3)(iii)(f) applied to the interest paid to state government entities without specific notification, and if the delay in filing the appeal should be condoned.
Sections Cited
194A(3)(iii)(f), 201(1), 201(1A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा�रणवष� / Assessment Year: 2012-13) Punjab National DCIT (TDS) BankBramta Bhawan, Sector 2, बनाम/ Vs. Sector 1 Himachal Pradesh- Haryana. 171009. �थायीलेखासं./जीआइआरसं./TAN/GIR No. PTLPl-2970-G (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Rakesh Kumar (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr.DR सुनवाईकीतारीख/Date of Hearing : 09-04-2025 घोषणाकीतारीख /Date of Pronouncement : 21-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2012-13 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Pune [CIT(A)] dated 15-02-2024 confirming certain demand raised by Ld. AO against the assessee-bank u/s 201(1) / 201(1A) of the Act vide order dated 09-10-2018.
Upon perusal of order of Ld. AO, it could be seen that the assessee paid interest to certain state government entities viz. HP Financial Corporation, HP Infrastructure Board, HP Road and other Inf. Dev. Corporation and Chairman SADA Kufri. No TDS was deducted against the same on the ground that these entities were covered u/s 194A(3)(iii)(f). However, these entities were not notified and therefore, Ld. AO raised demand u/s 201(1) for Rs.22.02 Lacs and also computed consequential interest u/s 201(1A) for Rs.17.39 Lacs. The Ld. CIT(A) did not admit the appeal for want of condonation of delay from 19-10- 2018 till 14-03-2020 i.e., till onset of Covid-19 Pandemic. Aggrieved, the assessee is in further appeal before us, 3. We are of the considered opinion that considering the fact that theimpugned dispute was recurring in nature and therefore, the delay ought to have been condoned. Nevertheless, we find the all the payee entities are 100% Govt. Owned Company / Govt. Department. The notification No.3489 dated 22-10-1970, in terms of Sec.194A(3)(iii)(f), exempt any corporation established by Central, State or provincial Act from the rigors of TDS u/s 194A. Once such a notificationexists, there was no requirement to issue separate notification for each of the entities. In fact, similar orders passed by the department in the case of this assessee u/s 201(1) / 201(1A) for AYs 2010-11, 2013-14 and 2014-15 (placed in the paper-book) would show that this position has been accepted by the department and no demand has been raised against assessee for non-deduction of tax at source against payment of interest to these entities. Therefore, impugned demand as raised against the assessee stand deleted.
The appeal stand allowed. Order pronounced on 21-04-2025.