BANK OF BARODA,UTTAR PRADESH vs. ADDL. CIT (TDS), GHAZIABAD

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ITA 698/DEL/2016Status: DisposedITAT Delhi05 July 2018AY 2014-153 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee was not obliged to deduct tax at source on interest paid to NOIDA. This was based on the Allahabad High Court's decision that NOIDA is entitled to exemption from TDS under Section 194A(1) of the Act.

What were the facts?

The assessee bank paid interest on fixed deposits to NOIDA Authority without deducting tax at source. The AO held the bank as an assessee in default for non-deduction of TDS and charged interest. The CIT(A) confirmed the AO's action.

What were the issues?

Whether the assessee bank was liable to deduct tax at source on interest paid to NOIDA Authority, and if NOIDA is entitled to exemption from TDS.

Which sections of the Income-tax Act were involved?

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

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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI

Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI

For Respondent: Shri SL Anuragi, Sr. DR
Hearing: 24/04/2018Pronounced: 05/07/2018

O R D E R PER PRASHANT MAHARISHI, A. M.

1.

This is an appeal filed by the assessee against the order of the ld CIT(A)- I, Noida dated 30.11.2015 for the Assessment Year 2014-15, wherein he has confirmed the action of the ld AO for Assessment Year 2014-15 dated 29.12.2014 passed u/s 201(1)/ 201(1A) of the Income Tax Act, 1961, holding that the assessee is “assessee in default” for non deduction of tax at source on interest paid to New Okhla Industrial Development Area (NOIDA) during the Financial year 2013-14 of Rs. 1392983025/- without deduction of tax at source u/s 194A of the Act and thereby working out the short deduction of tax at Rs. 73732917/- and further charging interest u/s 201(1A) of the Act of Rs. 11801769/-. The ld CIT(A) confirmed the action of the ld AO in a bunch of 22 appeals wherein the assessee is one of the party. The assessee aggrieved with the order of the ld AO and ld CIT(A) has preferred this appeal.

2.

The assessee has raised the following grounds of appeal:-

1. That on the facts and in the circumstances of the case and in law the Learned Commissioner of Income Tax (Appeal) erred in dismissing the appeal of appellant bank and retaining demand of Rs.7,73,67,154/- in the order passed by Ld. Additional Page | 1 Commissioner of Income Tax (TDS) Ghaziabad u/s 20i(i)/20i(iA) of the I.T Act, 1961.

2. That Ld. CIT (Appeal) Noida grossly erred in law and on facts in holding that the assessee-Deductor was liable to deduct tax on the interest paid/credited on the FDRs of NOIDA Authority u/s 194A of the Income Tax Act, 1961.

3. That Ld. CIT (Appeal) Noida erred in law and on facts without appreciating that the case of appellant is covered by notification no. S.0.3489 [No. I70 (F. No. 12/164/68-ITCC/ITJ).] dated 22nd October, 1970 issued by the CBDT in pursuance of Section i94A(3)(iii)(f) of Income Tax Act, 1961 which requires NO tax to be deducted at source u/s 194A on interest credited/paid on deposits.

4. That Ld. CIT (Appeal) Noida has failed to taken into consideration below given Hon‟ble ITAT judgments on very similar subject matter as follows: - a) Addl. CIT (TDS), Ghaziabad Vs Canara bank Sector-06, Noida in ITAT Delhi Bench „F‟ b) Chief Manager, Oriental Bank of Commerce Vs. ITO (TDS & Survey) in ITAT, Delhi Bench „I‟ ITA No. 2228/Del/20il. c) Branch Manager, Jammu Vs. Department of Income Tax in ITAT I.T.A Nos. 623 & 624 (Asr)/20il” in ITAT Amritsar Bench.”

5. That the ld CIT(A), Noida grossly erred while applying in mechanical manner the judgment of Hon‟ble Allahabad High Court in writ petition tax 1338 of 2005 titled as “Noida Authority Vs. Chief Commissioner of Income-tax and others”

3.

In the grounds of appeal

the main issue challenged by the assessee is that the coordinate bench in case of other parties in whose case the ld CIT(A) confirmed the order of the ld AO has been reversed.

4. Despite notice none appeared on behalf of the appellant and therefore, this issue is decided on the merits of the case as per facts available on record.

5. The ld DR relied upon the orders of the lower authorities.

6. We have carefully considered the contention of the ld DR. In the present case during the course of verification by the ld ITO(TDS) that the assessee has made payment of interest on fixed deposits deposits receipts of Rs. 1500 crores to NOIDA but no tax at source was deducted and therefore, the ld AO was of the view that provisions of section 194A applies, therefore, he held that assessee is in default to the extent of TDS not made u/s 201(1) and further charged interest u/s 201(1A) of the Act. Page | 2

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