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Facts
A TDS survey found the appellant bank did not deduct tax at source on interest paid to RGPV, Bhopal for multiple assessment years. The AO raised demands, and the CIT(A) dismissed appeals ex-parte. The appellant filed appeals with significant delays, seeking condonation due to pending rectification applications and difficulties in obtaining necessary forms.
Held
The Tribunal condoned the delay in filing the appeals. Noting the assessee's willingness to furnish Form 26A to avail benefits under the provisos to Sections 201(1) and 201(1A), and with the Revenue's agreement, the matters were remitted back to the CIT(A) for fresh adjudication. The assessee was directed to make full representation without seeking unnecessary adjournments.
Key Issues
Whether the delay in filing appeals should be condoned; whether the assessee can avail the benefits of the first provisos to Section 201(1) and 201(1A) if the payee has paid the tax and furnished a return.
Sections Cited
201(1), 201(1A), 154, 250, 139, Rule 31ACB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per Bench:
The captioned three (3) appeals have been filed by assessee against three (3) separate orders of first-appeals dated 27.01.2023, 27.01.2023 & 24.02.2023 passed by learned Commissioner of Income-Tax (Appeals), NFAC, Delhi [“CIT(A)”], which in turn arise out of three separate orders all dated 26.02.2019 passed by learned ACIT (TDS), Bhopal [“AO”] u/s 201(1) & 201(1A) of Income-tax Act, 1961 [“the Act”] for the Financial Years 2011-12 [Q-1 to Q-4], 2012-13 [Q-1 to Q-4] & 2017-18 [Q-1 to Q-4] relevant to Assessment-Years [“AY”] 2012-13, 2013-14 & 2018-19 respectively. Page 1 of 6
Union Bank of India RGPV-Bhopal 839 & 840/Ind/2024 AYs: 2012-13, 2013-14 & 2018-19
The background facts leading to these appeals are that the assessee/appellant is a branch of nationalized bank named ‘Union Bank of India’ engaged in banking business. A TDS survey was conducted by Income-tax authorities upon premise of assessee on 25.01.2019 and during survey and subsequent proceedings, it was found by AO that the assessee has paid interest to RGPV, Bhopal during financial years 2011-12, 2012-13 and 2017-18 without deducting tax at source (TDS). The AO has extracted data of interest payments made by assessee, the TDS deductible, the period of delay, interest leviable u/s 201(1A) in his orders. Ultimately, the AO passed three separate orders for respective years demanding tax and interest payable by assessee. Aggrieved, the assessee carried matters in first-appeals before CIT(A) but could not represent cases and the CIT(A) passed ex-parte orders dismissing assessee’s appeals. Still aggrieved, the assessee has come in next appeals before us.
The registry has informed that that these appeals have been filed after delays of 610 days, 607 days and 583 days respectively. Ld. AR for assessee submitted that the assessee has filed condonation-applications in all three matters supported by affidavits and prays for condonation. The applications filed in all three cases are similarly worded and we re-produce one of the applications:
Union Bank of India RGPV-Bhopal 839 & 840/Ind/2024 AYs: 2012-13, 2013-14 & 2018-19
Union Bank of India RGPV-Bhopal 839 & 840/Ind/2024 AYs: 2012-13, 2013-14 & 2018-19
On merit, Ld. AR for assessee made a straightforward submission. He invited our attention to following Provisos to section 201(1)/201(1A) of Income-tax Act, 1961 and Rule 31ACB of Income-tax Rules, 1962, prescribing as under:
1st proviso to Section 201(1): “Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a payee or on the sum credited to the account of a payee shall not be deemed to be an assessee in default in respect of such tax if such payee—
(i) has furnished his return of income under section 139; (ii) has taken into account such sum for computing income in such return of income; and (iii) has paid the tax due on the income declared by him in such return of income, and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed:
Rule 31ACB: This Rule prescribes Form No. 26A for the purpose of 1st Proviso to section 201(1).
1st proviso to Section 201(1A): “Provided that in case any person, including the principal officer of a company fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a payee or on the sum credited to the account of a payee but is not deemed to be an assessee in default under Page 4 of 6
Union Bank of India RGPV-Bhopal 839 & 840/Ind/2024 AYs: 2012-13, 2013-14 & 2018-19 the first proviso to sub-section (1), the interest under clause (i) shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such payee:”
Then, Ld. AR submitted that the assessee is willing to file the Form No. 26A and avail benefit of aforesaid 1st Proviso to section 201(1) and 1st Proviso to section 201(1A). He prayed that the assessee is a branch of nationalized bank and needed time to receive the requisite forms from head office and for that reason sought adjournments from CIT(A) but, however, the process took more time and the assessee was unable to make submissions to CIT(A), which led the CIT(A) to pass ex-parte orders and dismiss assessee’s appeals. However, the assessee is now ready to make submissions before CIT(A) and in the interest of justice one more opportunity must be given to assessee by remanding these matters to the file of CIT(A) for adjudication afresh.
Ld. DR for revenue fairly agreed to the prayer of Ld. AR. He, however, requested that the assessee be directed to represent its cases fully before CIT(A) without seeking unnecessary adjournments.
In view of above, we are inclined to remit these matters back to the file of CIT(A) who shall consider the claim of assessee and decide matter afresh.
The assessee is also directed to make full representation before CIT(A) without seeking unnecessary adjournments.
Union Bank of India RGPV-Bhopal 839 & 840/Ind/2024 AYs: 2012-13, 2013-14 & 2018-19
Resultantly, these appeals are allowed for statistical purpose.
Order pronounced in open court on 10/10/2025.