BANK OF INDIA,NAGPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, TDS, CIRCLE-51(1), MAGPUR

The parties before us have conceded that the facts and circumstances and the issues involved in all these appeals are absolutely similar and identical. That, for the fact of the matter, further it was submitted by the ld.AR that the adjudication for justice in all these appeals shall be served by following the decision of the Nagpur Bench of the Tribunal in assessee’s own case in group of appeals vide order dated 28/03/2023 on absolutely identical facts and issues. Ld.DR conceded to this submission.

Briefly stated, the facts of the case in the captioned appeals are that the assessee is a Nationalised Bank engaged in the banking business. Section 194A mandates that tax has to be deducted at source in respect of interest paid/credited to the account of the customers. A spot verification in some branches of the assessee bank was conducted in March, 2016 and default in compliance was found anent to the TDS provisions under the section. Information was collected from Zonal office as regards the branches paying/crediting interest to customers’ accounts, for an amount in excess of the basic exemption limit, without deduction of tax at source on receiving Form Nos.15G/15H. On perusal of such information, the AO noted certain cases, as tabulated in his order, where interest paid was more than the relevant basic exemption limits but no deduction of tax at source was made on receiving Form Nos.15G/15H. After considering the reply and getting partially satisfied, the AO held the assessee to be in default u/s.201. No succor was provided by the ld. CIT(A) on merits, who also dismissed the appeals filed before him as time barred.”

That, so far as merits of the cases are concerned, the relevant observations are at paras 7 & 8 which are as follows:- “7. Next issue which survives on merits is about the liability of the assessee to deduct tax at source. We have discussed the issue lock stock and barrel in drawing the following conclusions: i. The question whether the assessee is in default in terms of section 201(1) needs to be determined in the light of Explanation to section 191. Howbeit, the cases covered u/s 197A(1A) [i.e. the eligible person furnishing declaration in form No. 15G that his tax liability on total income, including the interest, will be Nil] but not hit by section 197A(1B) [i.e. interest income other than interest on securities as referred to in section 194A does not exceed the basic exemption limit], will at the outset be excluded from consideration as not entailing any obligation to deduct tax at source. Similarly, the cases covered u/s 194A(1C) [i.e. persons exceeding the specified age furnishing form No. 15H to the effect that tax on their total income including such interest will be Nil] will also be excluded. ii. Interest u/s 201(1A) is payable by the assessee - even w.r.t. the cases where it is not in default in terms of Explanation to section 191 - from the date when the tax was deductible up to the date of filing of return by the payee including the interest income in his total income. However, the cases in which there is no obligation to deduct tax at source will not be considered for interest u/s 201(1A) of the Act.

Respectfully following the aforesaid judicial pronouncement and on the same parity of reasoning, these matters are also restored to the file of respective AOs for adjudication as per law following the same direction as has been given in the above referred Tribunal’s order in assessee’s own case.

In the result, all the appeals of the assessee stands allowed for statistical purposes.