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Income Tax Appellate Tribunal, PANAJI BENCH : PANAJI
Before: SHRI SATBEER SINGH GODARA & SHRI G.D. PADMAHSHALI
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH : PANAJI (THROUGH VIRTUAL HEARING) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI G.D. PADMAHSHALI, ACCOUNTANT MEMBER ITA.Nos.53 & 54/PAN./2019 Assessment Year 2011-2012 Canara Bank, (Panaji Branch), The Asst. Commissioner of vs. Ground Floor, Mathias Plaza, Income Tax (TDS), Circle, 18th June Road, Panaji – Goa. Panaji, Goa – 403001 PAN AAACC6106G (Appellant) (Respondent) ITA.No.77/PAN./2019 Assessment Year 2011-2012 Canara Bank, (Panaji The Asst. Commissioner of Branch), Ground Floor, vs. Income Tax (TDS), Circle, Mathias Plaza, 18th June Panaji – Goa. Road, Panaji, Goa – 403001 PAN AAACC6106G (Appellant) (Respondent) For Assessee : Shri S. Ananthan And MS. Lalitha Rameswaran For Revenue : Shri N. Shrikanth Date of Hearing : 11.07.2023 Date of Pronouncement : 13.07.2023 ORDER PER BENCH :
The instant batch of three appeals pertains to a single assessee viz., Canara Bank for assessment year 2011- 2012. All these cases arise against the CIT(A), Panaji-1, Panaji’s common order dated 28.12.2018, in case no.ITA.No. CIT(A), PNJ-1/10020/2018-19 and 10022/2018-19,
2 ITA.Nos.53, 54 & 79/PAN./2019 Canara Bank, Panaji Branch, Panaji Goa. respectively, in proceedings u/sec.201(1) and 201(1A) of the Income Tax Act, 1961 (in short "the Act").
Heard both the parties. Case files perused.
It emerges during the course of hearing that the assessee’s twin appeals ITA.Nos. 53 & 54/ PAN./2019 plead the following identical substantive grounds :
“The order of the learned Commissioner of Income Tax (Appeals) is bad in law and against the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) failed to appreciate that order passed u/s 201(1) by the learned Assessing Officer is time barred and void-ab-initio. 2.1. The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact order passed u/s 201(1) is beyond the limitation period specified under section 201 (3) of the Income Tax Act. 2.2. The learned Commissioner of Income Tax (Appeals) erred in dismissing the ground of appeal by holding that law as existing on the day on which the cause for action arose is the limitation statute which should be implemented. 3. The learned Commissioner of Income Tax (Appeals) erred in remanding the issue back to the learned Assessing Officer even after holding that once forms are obtained by the Bank, it is precluded from deducting tax at source.
3 ITA.Nos.53, 54 & 79/PAN./2019 Canara Bank, Panaji Branch, Panaji Goa. 3.1. The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that there was no short deduction of tax. 3.2. The learned Commissioner of Income Tax (Appeals) erred in not appreciating that the Branch had obtained Form 15H / Form 15G in all the cases. 3.3. The learned Commissioner of Income Tax (Appeals) failed to appreciate that once the appellant had obtained Form 15G / Form 15H, the Bank had no legal obligation to deduct the tax on payment of interest.
Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) failed to appreciate that appellant cannot be held as an assessee in default without proving that the recipient of the income has not paid the tax.
For all these and other grounds, which may be urged at the time of hearing, the appellant prays that its appeal be allowed.”
The Revenue’s cross-appeal ITA.No.77/PAN./2019 on the other hand plead the following grounds :
i. “The Id. CIT(A) has erred in not considering the fact that the mere submission of a declaration is not
4 ITA.Nos.53, 54 & 79/PAN./2019 Canara Bank, Panaji Branch, Panaji Goa. sufficient. This declaration is to be in a prescribed manner and format, containing certain information as prescribed. The Act lays down that this declaration should be “to the effect that the tax on his estimated total income of the previous year to which such income is to be included in computing his total income will be nil.” This requires that the Forms submitted should have complete information, and should be properly filled out. Columns in the Form Nos.l5G/15H such as PAN/Financial Year/Estimated Income for which this declaration is made/Estimated total income of the relevant F.Ys. are to be filled correctly and completely. In the absence of this information, these forms shall be held to be invalid. And the interest paid out bank shall therefore be liable to tax u/s 194A of the Act. ii. Further, the CIT(A) has ignored the fact that the assessee Bank has not complied to the provisions envisaged in section 197A which mandates to furnish the Form-15G/ 15H received during particular month from customer to the jurisdictional Commissioner of Income tax on or before 7th of the following month. Hence, the 15G/15H forms received by the assessee Bank after the due dates of filing are invalid.
5 ITA.Nos.53, 54 & 79/PAN./2019 Canara Bank, Panaji Branch, Panaji Goa. iii. The ld. CIT(A) has erred in not considering the fact that the assessee has violated the TDS provisions in respect of section 197A wherein it is the duty of the assessee/ deductor to file such received form- 15G/15H along with the particulars prescribed in Rules 1962 in the TDS statement furnished for the relevant quarters. iv. Further, ld. CIT(A) did not consider the fact that the assessee/deductor has merely collected and accepted the Form Nos.l5G/15H from the depositors without verifying total income of the previous year to which such income is to be included in computing his total income will be Nil. v. The ld. CIT(A) has erred in not considering the fact that the deductor has violated the provisions of section 194A of I.T Act 1961. The section 194A has made it clear that where the payment of interest exceeding Rs.10,000/- during the particular F.Y., TDS at the rate of 10% has to be deducted by the deductor and the same has to be remitted to the Central Government Account within the stipulated period mentioned as per the Income Tax Act 1961. vi. The ld.CIT(A) has erred in stating that the department has asked the assessee to rectify form no 15G & 15H when the Income Tax Department has not asked for
6 ITA.Nos.53, 54 & 79/PAN./2019 Canara Bank, Panaji Branch, Panaji Goa. the same. There is no such provision in the Act, or Rules. The idea of such a ‘rectification’ does not fall within the mandate of statute, within the parameters of practical feasibility, or solve the purpose of bringing back revenue lost to the government.”
Suffice to say, it is noticed in this factual backdrop that both the parties are aggrieved against the CIT(A)'s action rejecting the assessee’s legal plea of sec.201(1) proceedings being barred by limitation, whereas the Revenue challenges correctness of the lower appellate findings on merits as under :
“6. The Appellant is a nationalised bank. A survey u/s 133(2)(A) of the IT Act was conducted on Panaji branch in September 2017. It was observed during the survey that some of the copies of form 15G and 15H were invalid as certain information was not filled in the relevant columns of form 15G and 15H. The Assessing Officer passed the order of assessment on 29/3/2018. Aggrieved by the said order, the appellant branch has filed the appeal.
The appeal is filed largely on two grounds. One pertains to limitation and second pertains to merits of the case. On limitation it has been argued that the statute applicable at the time of filing of TDS return is the applicable statute, and the amendment made later is not the applicable statute. It is claimed that the provisions of
7 ITA.Nos.53, 54 & 79/PAN./2019 Canara Bank, Panaji Branch, Panaji Goa. sec.201(3) as amended by Finance Act 2012, with retrospective effect from 01.04.2010, is the statute of limitation applicable to this case. Whereas, the AO, even in his remand report dated 01.10.2018, has relied on the statute as amended by Finance Act no. 2, 2014 with effect from 01.10.2014.
This is a provision which has been amended with effect from 01.10.2014, and the AO has rightly claimed to have implemented the correct provision of law, because the law as existing on the day on which the cause for action arose is the limitation statute which should have been implemented. The appeal on limitation, therefore, fails.
As regards, merit of the case is concerned, it is an accepted position that form no.15G and 15H suffer from infirmities and incompleteness, which needs to be rectified. However, it is true that once the forms are obtained by the bank, it is precluded from deducting tax at source. The case laws filed by the appellant supports its position.
I have considered the order framed by the Assessing Officer as well as the submissions of the appellant carefully in this regard. Ends of justice will be met if the appellant is allowed opportunity to rectify and
8 ITA.Nos.53, 54 & 79/PAN./2019 Canara Bank, Panaji Branch, Panaji Goa. file form 15G and 15H by curing the defects. Therefore the appellant may be allowed by the Assessing Officer reasonable opportunity to rectify the defects. Subject to rectifying the defects, the appeal on this ground is treated as allowed.”
Learned counsel representing the assessee has filed it’s letter dated July 11, 2023 seeks to withdraw its twin appeals, more particularly, the former one ITA.No.53/PAN./ 2019 as under :
9 ITA.Nos.53, 54 & 79/PAN./2019 Canara Bank, Panaji Branch, Panaji Goa. 6. Faced with the situation, we are of the view that even the Revenue would hardly be an aggrieved party once the Assessing Officer himself has verified the corresponding records including Form nos.15G and 15H involving the concerned party(ies). We, therefore, dismiss the assessee’s twin appeals ITA.Nos.53 & 54/PAN./2019 as withdrawn and reject the Revenue’s appeal ITA.No.77/PAN./2019, subject to all just exceptions.
To sum-up, assessee’s twin appeals are dismissed as withdrawn and Revenue’s appeal is dismissed.
Order pronounced in the open court on 13.07.2023.
Sd/- Sd/- [G.D. PADMAHSHALI] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 13th July, 2023 VBP/- Copy to 1. The appellant 2. The respondent 3. The NFAC, Delhi 4. The CIT, Goa 5. D.R. ITAT, Panaji Bench, Panaji 6. Guard File. //By Order//
Assistant Registrar, ITAT, Pune Benches Pune.