THE COMMISSIONER OF INCOME TAX vs. M/S VIJAYA BANK

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ITA/343/2014HC KarnatakaKAHC01026876201415 September 2015Bench: B.MANOHAR,VINEET SARAN5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court found no infirmity in the Tribunal's order, stating that disallowance under Section 40(a)(ia) cannot be made for short deduction of TDS. It also held that Section 263 jurisdiction cannot be exercised when two views are possible and the Assessing Officer has taken one.

What were the facts?

The Commissioner of Income Tax invoked revisional powers under Section 263 due to alleged short deduction of TDS by Vijaya Bank. The Tribunal allowed the assessee's appeal against the Commissioner's order.

What were the issues?

Whether disallowance under Section 40(a)(ia) is permissible for short deduction of TDS, and if the Commissioner can revise an order under Section 263 when the Assessing Officer has taken a possible view.

Which sections of the Income-tax Act were involved?

Section 263,Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 15TH DAY OF SEPTEMBER, 2015

PRESENT

THE HON'BLE MR. JUSTICE VINEET SARAN

AND

THE HON’BLE MR. JUSTICE B.MANOHAR

ITA NO.343/2014

BETWEEN

1.

THE COMMISSIONER OF INCOME-TAX LTU, JSS TOWERS, BSK III STAGE, BANGALORE.

2.

THE ADDL. COMMISSIONER OF INCOME-TAX LTU, JSS TOWERS, BSK III STAGE, BANGALORE. ... APPELLANTS

(BY SRI.K.V.ARAVIND, ADV.)

AND

M/S.VIJAYA BANK HEAD OFFICE, CENTRAL ACCOUNTS DEPARTMENT 41/2, M.G.ROAD, BANGALORE-560 001.

...RESPONDENT

(BY SRI BALRAM R. RAO, ADV.,)

THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:7.3.2014 PASSED IN ITA NO.810/BANG/2013, FOR THE ASSESSMENT YEAR 2008-09

PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX, LTU, BANGALORE.

THIS ITA COMING ON FOR ADMISSION THIS DAY, VINEET SARAN J. DELIVERED THE FOLLOWING:

JUDGMENT

On the ground that there was alleged short deduction of TDS by the assessee-respondent (Vijaya Bank), suo moto revisional power under Section 263 of the Income Tax Act, 1961 (for short ‘the Act’) was invoked by the Commissioner of Income Tax and decided against the assessee by order dated 06.03.2013. Challenging the said order, the assessee filed an appeal before the Tribunal which has been allowed. Aggrieved by the same, this appeal has been filed by the revenue on the following two questions of law: “i. Whether the Tribunal was correct in holding that disallowance under Section

40(a)(ia) cannot be made when there is short deduction of tax when the said short deduction was already brought out in the order u/s.263 but the assessee had failed to substantiate with the evidence that the issue related to short deduction and not non- deduction?

ii. Whether the Tribunal is correct in quashing 263 order holding that two views were possible on this issue and assessing officer has adopted one review which cannot be revised by Commissioner of Income Tax u/s.263 of the Act when no two views were available on this issue?”

2.

We have heard Sri K.V.Aravind, learned counsel for the appellants as well as Sri Balram R. Rao, learned counsel for the respondent-assessee and perused the record. With the consent of learned counsel for the parties, this appeal has been heard and is being finally disposed of at the Admission stage.

3.

The Tribunal has allowed the appeal, primarily on the ground that the quantum of short deduction of tax at source was admitted by the assessee and there was no further verification required by the Assessing Officer and also that the legal position was well settled that disallowance under Section 40(a)(ia) of the Act could not be made where there was a short deduction of tax at source and that such claim was made by the assessee in the audit report, which was accepted by the Assessing Officer. It also considered that the same was in consonance with the view expressed by the Tribunal earlier and confirmed by the Calcutta High Court in the case of CIT –vs- S.K.Tekriwal (361 ITR 432). Further, it has been held that since two views were possible to be taken by the Assessing Officer in the case of the assessee, and one of the possible views has been taken, then in such a situation the jurisdiction under Section 263 of the Act could not have been exercised.

4.

We do not find any infirmity with the order of the Tribunal in allowing the appeal of the assessee. As such, no substantial questions of law arise for determination by this Court. The appeal is accordingly dismissed.

Sd/-

JUDGE

Sd/-

JUDGE TL

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