M/S KARNATAKA VIKAS GRAMEENA BANK,BANTWAL vs. INCOME TAX OFFICER (TDS), MANGALORE

PDF · subscribers
ITA 370/BANG/2017Status: DisposedITAT Bangalore26 February 2020AY 2013-147 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer needs to verify details of deposit holders, especially those who are agriculturists and do not have taxable income, before raising a TDS demand. The appeals were allowed for statistical purposes.

What were the facts?

During a survey, it was found that the assessee bank had not complied with TDS provisions on interest payments exceeding Rs. 10,000 for many customers, only obtaining Form 15G/15H from a few. The Assessing Officer raised a demand for short deduction of TDS and interest.

What were the issues?

Whether TDS is deductible on interest payments to agriculturists who do not have taxable income, and the validity of the demand raised by the Assessing Officer without proper verification.

Which sections of the Income-tax Act were involved?

Section 194A,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, BANGALORE BENCHES “ C ” BENCH: BANGALORE

Before: SHRI B.R. BASKARAN & SHRI PAVAN KUMAR GADALE

For Appellant: Shri S.V. Ravishankar, Advocate
For Respondent: Smt. R. Premi, JCIT (D.R)
Hearing: 04.02.2020

2 to 371/Bang/2017 consolidated order is passed. For the sake of convenience, we shall take up the ITA No.369/Bang/2017 for the Assessment Year 2012-13 and facts narrated therein. 2. The assessee has raised the following grounds of appeal :

4 to 371/Bang/2017 3. The assessee is a Branch of Karnataka Vikas Grameena Bank.Whereas the Karnataka Vikas Grameena Bank has come into existence on 12.09.2005 and sponsored by Syndicate Bank for catering to the needs of farm sector and non-farm sector. Survey under Section 133A of the Act was conducted on 7.1.2015 in the premises of assessee for verifying the compliance of TDS provisions under Chapter XVI B of the Act. During the survey proceedings, details were called for in respect of interest payments exceedingRs.10,000/- per annum and copies of Formno 15G & 15H . Whereas the assessee has obtained Form no15G &15H only from four customers and for remaining customers, no compliance of TDS provisions. Finally, assessing officer passed order under Section 201(1) and 201(1A) of the Act dt.4.3.2015 with demand of Rs.31,794 being shortfall of TDS under Section 194A of the Act under Section 201(1) and 201(1A) of Rs.11,128 aggregating to Rs.42,922. Aggrieved by the order, the assessee has filed an appeal with the CIT(Appeals), But The CIT(Appeals) has confirmed the action of the Assessing Officer and dismissed the appeal. Aggrieved by the order, the assessee has filed an appeal with the Tribunal.

4.

At the time of hearing, the learned Authorized Representative submitted that the CIT(Appeals) has erred in confirming the order of Assessing Officer, whereas the assessee has obtained Formno15G & 15H from four depositors and whereas in respect of others, they are agriculturists and no Return of Income was filed. The 5 ITA Nos.369 to 371/Bang/2017 learned Authorized Representative submitted that the provisions of Section 194A of the Act shall not apply where there is no taxable income in the hands of deductees. and supported his arguments with the decision rendered by Panaji Bench in the case of RBL Bank Limited Vs. ITO (TDS) (2016) 65 Taxman.com 219 (Panaji). Contra, the learned Departmental Representative supported the orders of CIT(Appeals).

5.

We heard the rival contentions and perused the material on record. The sole disputed issue argued and envisaged by the learned Authorized Representative that the CIT(Appeals) has erred in confirming the action of the Assessing Officer on raising demand under Section 201(1) and 201(1A) of the Act. The learned Authorized Representative emphasized that the assessee has complied with the provisions and deposit holders have offered income in their income tax assessments In respect of other deposit holders, they do not have taxable income and are agriculturists, hence the question of deduction of TDS does not arise, and relied on the Tribunal decision of RBL Bank Limited Vs. ITO (TDS) (Supra) extracted below :

6 to 371/Bang/2017 In the course of hearing, the Bench has called for statement of deposit holders along with the names, address and the amount of interest, and the learned Authorized Representative expressed inability to submit immediately. He sought time to furnish the details. In any case, we considering the submissions of assessee, are of the opinion that the Assessing Officer has to verify and examine the details of deposit holders and the component of interest paid to deposit holders being agriculturists who do not have taxable income and allow the grounds of appeal of assessee for statistical purposes.

6. Similarly in ITA Nos.370 & 371/Bang/2017, the issues are similar and identical and the same decision as held in ITA No.369/Bang/2017 shall apply. Accordingly, the orders of the CIT(Appeals) is set aside and restore to the file of Assessing Officer with similar directions cited above and allow the grounds of appeal for statistical purposes.

7. In the result, the assessee's appeals are allowed for statistical purposes. Pronounced in the open court on the date mentioned on the caption page.

More judgments on Section 194A

All 1,500 judgments and leading authorities on Section 194A →

Recent GST High Court judgments

Search GST case law →