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Facts
The assessee, Bank of India, is aggrieved by the order of the CIT(A) which upheld the order of the AO. The AO had treated the assessee as being in default for short/non-deduction of TDS on interest payments exceeding the taxable threshold, levying a demand of Rs. 1,04,564/-. The assessee contended that the Form 15G/15H were collected at the beginning of the financial year and the aggregate interest exceeded the non-chargeable limit only in the fourth quarter.
Held
The Tribunal condoned the significant delay in filing the appeal due to genuine reasons. While the lower authorities upheld the demand, the Tribunal found merit in the assessee's contention regarding the timing of exceeding the threshold. Therefore, the matter was remanded back to the AO for fresh consideration.
Key Issues
Whether the assessee was in default for short/non-deduction of TDS on interest payments when the aggregate interest exceeded the threshold only in the later part of the financial year, despite initial declarations in Form 15G/15H.
Sections Cited
201, 201(1), 201(1A), 194A, 133(6), 197(1A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI,
raised u/s 201(1)/201(1A) of IT Act 1961 by an order dated 22.03.2019.
Aggrieved from the order of the National Faceless Assessment Center, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:
“4. Findings: I have considered the grounds of appeals of the appellant and records. The adjudication on various grounds of appeal is in subsequent para.
4.1 Ground Nos. 1 to 3: These grounds relate to the issue of additions made u/s 201(1) & 201(1A) of the IT Act 1961.
4.1.1 It is observed that appellant had just filed the Grounds of Appeal in Form-35 and had not submitted any documents to substantiate its claim in the grounds taken by it. It is further observed that the appellant has filed "No" in response to column 12 of Form-35, thereby mearing that no additional evidences have been filed by the appellant. Thus, the case has to be decided on the basis of facts mentioned in the Assessment Order.
4.1.2 It is observed that the appellant had made payments of interest to three entities exceeding the maximum threshold of taxable income without any declaration from the appellants and without/short deduction of TDS, Section 194A casts responsibility on the person (except Individual & HUF) paying any interest to resident of India, to deduct income tax (TDS) while paying/crediting any sum. Further Income Tax Rule, 1962 have provided the prescribed form 15G/15H for declaration be to be made by an individual or a person claiming certain receipts without deduction of tax (as per section 197(1A). In the Note 12 of form 15G of the income tax rules, it has been clearly stated that:
"The person responsible for paying the income referred to in column 16 of part I shall not accept the declaration where the amount of income of the nature referred to in sub-section (1) or sub-section (1A) of section 197A or the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the previous year in which such income is to be included exceeds the maximum amount which is not chargeable to tax. For deciding the eligibility, he is required to verify income or the aggregate amount of income, as the case may be, reported by the declarant in columns 16 and 18." Therefore, the primary responsibly is casted on the payer of interest to deduct TDS, if the amount paid is above the maximum threshold of taxable income. The payer had to determine only if the total amount paid by it is exceeding the maximum amount chargeable to tax, then it had to deduct TDS, unless the certificate of no deduction of TDS, issued by the income tax department, had been furnished by the payee. In these facts & circumstances of the case and given position of law, the appellant had to be considered as "assessee in default" for the tax w.r.t. these interest payments without lower deduction of TDS. The appellant had not submitted any details during the appellate proceedings to rebut the stand of the AO on this issue.
4.1.3 In view of the above discussion, it is held that the AO had correctly passed the order U/S 201(1) & 201(1A) w.r.t the three entities mentioned in the Assessment Order. The appellant had not submitted any further evidences to substantiate its claim in the various grounds of appeal inspite of sufficient opportunities given as enumerated above. Therefore, I have no material to interfere with the order of the AO and these grounds of appeal of the appellant are dismissed.
4.2 Ground No 4: The appellant had asked for stay of demand. The appellant had not submitted any explanation/documents for considering the stay of demand. Therefore, this ground of appeal is dismissed.
4.3 Ground No 5. This ground is general in nature & does not require any separate adjudication.
In the result the appeal of the appellant is dismissed.
Aggrieved from the said order of the ld. CIT(A), the assessee is in appeal before this tribunal. Apropos to the grounds raised ld. AR of the assessee submitted that the ld. AO asked for the details of the parties who have submitted the form no. 15G/H and the interest paid were exceeded the maximum amount not chargeable to tax. The form no. 15G/H were collected at the beginning of the financial year whereas the branch manager may not have idea that the interest for the year will exceeds the maximum amount not chargeable to tax and thereby there was default in 3 cases only and since this aspect of the matter handled by the computer generated software it left the attention of the incumbent branch manager. Considering that aspect of the matter ld. AR of the assessee submitted that the demand opportunity to have the alternative remedy by filling Form no. 27BA and thereby wanted to have one chance to plead their case before the ld. AO.
Per contra, ld. DR relied upon the orders of the lower authority.
We have heard the rival contentions and perused the material placed on record. The bench noted that the ld. AO based on the information collected u/s. 133(6) taken a view that the form no. 15G/H so submitted were not valid once the income chargeable to tax exceeds the maximum amount not chargeable to tax and thereby, he found short deduction/non deduction of TDS to the extent of Rs. 53,349/- and also levied interest us/ 201(1A) of the Act for Rs. 51,215/-. The bench noted that the contention raised before us by the ld. AR of the assessee that the form no. 15G/H were collected in the beginning of the financial year and liability based on that form cannot be decided in the beginning of the financial year but in all the three case we note that the same were exceeded in the fourth quarter and therefore, as prayed the bench is of the considered view that the assessee-appellant be given a chance to have prove the alternative remedy by filling the Form no. 27BA for those assessee who have paid the tax and thereby there is no revenue loss to the exchequer. Considering that peculiar AO who will consider the factual aspect of the matter as raised by the assessee after due verification of the facts and charge the correct default of the assessee in accordance with law after affording due opportunity to the assessee. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during proceedings before the ld. AO.
Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law.
In the result, the appeal filed by the assessee in is allowed for statistical purposes.
The fact of the case in is similar to the case in materials available on record. Therefore, it is not imperative to repeat the facts, various grounds raised by the assessee and the arguments of both the parties in ITA no. 17/JP/2025. Hence, the bench feels that the decision apply mutatis mutandis in the case of Bank of India in for the Assessment Year 2012-13.
In the result, the appeal filed by the assessee in is allowed for statistical purposes.
Order pronounced in the open court on 04/03/2025.
Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 04/03/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Bank of India, Jaipur 2. izR;FkhZ@ The Respondent- CIT Faceless/ACIT vk;dj vk;qDr@ The ld CIT 3. vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA Nos. 17 & 68/JP/2025) vkns'kkuqlkj@ By order,
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