ACIT (TDS), DEHRADUN vs. STATE BANK OF INDIA, DEHRADUN

2. The ld CIT(A) has erred in law and facts in holding the order of the AO as barred by limitation by treating the order of AO to be covered u/s 201(3)(i) of the IT Act ignoring the fact that the assessee has not filed any TDS statement in respect of impugned transaction and therefore the case cannot be said to be covered u/s 201(3)(i) of the IT Act. The TDS verification was conducted on 19.02.2013 and order of the AO passed on 22.03.2013 and therefore the order of the AO was well within limitation period.” 2. Facts in brief are that the assessee is a scheduled commercial bank and a verification of Tax Deducted at Source (TDS) was carried out by the “Income-tax Department” on 19/02/2013 on the branch of the assessee bank located at Tel Bhawan, Dehradun. During verification it was observed that the “Oil and Natural Gas Corporation Ltd.” (in short “ONGC”) was maintaining an account called Site Restoration Account (SRA) with the assessee. The learned Assessing Officer (in short „AO‟) observed that no tax was deducted by the assessee bank on the interest which accrued on the said account to the ONGC. Before the ld AO, the assessee submitted that as per provisions of section 33ABA of the Income Tax Act (in short „the Act‟), the amount credited by way of interest in special account or SRA does not attract a tax liability payable by the ONGC limited because the interest on SRA credited by the assessee was deemed to be a deductible deposit and therefore excluded from the total income chargeable under the Act. Further, the assessee contended that the interest was not taxable even at the time of withdrawal if the same was utilized for the purposes contained in the SRA scheme in accordance with the provisions of the Act. The ld. AO, however, did not accept the contention of the assessee and held the assessee to be in default in deducting of tax and raised demand u/s 201 and interest u/s 201(1A) of the Act. Against the said order of the ld. AO, the assessee filed appeal before the learned Commissioner of Income-tax (appeals) [in short „CIT(A)‟], who, then held that as per clause (i) of provisions of section 201(3) of the Act, the AO was required to pass the order within 2 years from the end of financial year in which the statement as referred in section 200 was filed, however the AO failed to comply the said limitation, and therefore, the order of the ld. AO was held invalid being barred by limitation. Accordingly, the ld CIT(A) did not adjudicate matter on merit. Aggrieved, the Revenue has filed an appeal before us.

At the outset, the learned Authorised Representative (in short „AR‟) of the assessee submitted that on merit, the decision of the co-ordinate bench of the Income-tax Appellate Tribunal ( ITAT) in 3937 and 3938/Del/2013, for the Assessment Year 2010-11, 2011-12