VIJAYA BANK,BELLARY vs. ASST. COMMISSIONER OF INCOME TAX, BELLARY

This is an appeal filed by the assessee directed against the order of the learned Commissioner of Income-tax (Appeals), Gulbarga, [CIT(A)] dated 17/08/2016 for the assessment year 2012-13.

At the outset, there is a delay in filing of appeal by 5 days. The appellant filed a petition for condonation of delay. The learned Departmental Representative has no objection for condoning the delay in filing of appeal. After considering the petition, we condone the delay.

Brief facts of the case are that the assessee is a public sector bank. The Asst. Commissioner of Income-tax, TDS Circle, Hubli [hereinafter referred to as ‘TDS officer’], conducted survey proceedings u/s 133A of & 1846/Bang/2016 Page 2 of 5 the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short], during the course of such survey proceedings, the TDS officer noticed that out of total interest of Rs.1,63,74,534/-, TDS was not deducted on sum of interest of Rs.82,34,605/-. It is stated that assessee-bank had obtained Form No.15G/15H from the depositors. However, the assessee- bank could not furnish evidence in support of having submitted copy of Form No.15G/15H to the Chief Commissioner of Income- tax/Commissioner of Income-tax. In the circumstances, the TDS officer held the assessee as ‘the assessee in default’ for not deducting TDS on interest payment of Rs.82,34,605/- and accordingly, demanded tax u/s 201 and 201(1A) of the Act vide order dated 29/3/2014 for the assessment year 2012-13.

Being aggrieved, an appeal was preferred before the ld.CIT(A) who, vide impugned order, dismissed the appeal. The relevant observation is as under:

During the course of hearing learned AR of the assessee submitted that non-submission of copies of Form 15G/15H to the respective Commissioners of Income-tax, does not ipse facto cannot lead to hold the assessee as ‘the assessee in default’. It is only a technical breach of provisions of law. In this connection, he relied on the following decisions:

We heard rival submissions and perused the material on record. The only issue in the present appeal is in case where 15G/15H Form was obtained from depositors to whom interest was paid, but copy of same was not forwarded to the Commissioner of Income-tax (CIT) as provided u/s 197A of the IT Act, whether the assessee was under legal obligation to deduct taxes on such payment. The provisions of Income-tax Act, prescribe penal provisions for non-forwarding of 15G/15H Form to the CIT. In such circumstances, it has been held by the co-ordinate bench of Tribunal in catena of decisions cited supra, that such default by itself does not lead to hold that the assessee is an assessee in default for not deducting TDS at source. However, in the present case, the TDS officer as well as the ld.CIT(A) disputed the claim that the assessee-bank had obtained 15G/15H Form. However, the branch manager of the appellant- bank had filed an affidavit stating that the appellant had obtained 15G/15H Form from the depositors to whom interest was paid and no tax deduction at source was made. The contents of affidavit has not been disputed by the ld.DR. However, in the interest of justice, we remit this issue back to the file of the TDS Officer for the limited purpose of verifying whether the appellant-bank obtained 15G/15H Form from the depositors, if so found, not to treat the assessee as assessee in default, after affording due opportunity to the appellant bank. In the circumstances, the appeal filed by the assessee-bank for the assessment year 2012-13 is partly allowed.

Since identical facts are involved in (assessment year 2013-14), for the reasons given in ITA & 1846/Bang/2016 Page 5 of 5 No.1845/Bang/2016 for assessment year 2012-13, the issue is also remitted back to the file of the TDS Officer with similar direction.

In the result, the appeal filed by the assessee for assessment year 2013-14 is also partly allowed.