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Income Tax Appellate Tribunal, NAGPUR BENCH
Before: SHRI R.S.SYAL & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER Bench:
These fifteen appeals arise out of the different orders passed by
the CIT(A) in National Faceless Appeal Centre (NFAC), Delhi u/s.250
of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in
relation to the assessment years 2013-14 & 2014-15. Since common
issues are raised in these appeals, we are, therefore, proceeding to
dispose them off by this consolidated order for the sake of
convenience.
The foremost issue raised in these appeals is against the
confirmation of the orders passed by the AOs u/s.201(1)/201(1A) of
the Act treating the assessee in default for non-deduction of tax at
source u/s 194A on interest paid/credited to its customers and also non-
condonation of delay by the ld. CIT(A) in presenting the appeals before
him.
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
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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.
Both the sides are in agreement that the issues raised in these appeals are mutatis mutandis similar to the one extensively argued in
the case of the assessee in ITA No.277/Nag/2022. Resultantly, it was
pleaded that the decision arrived at by the Tribunal in such lead case
will stand good for the extant batch of appeals under consideration.
We have heard the rival submissions and gone through the
relevant material on record. The Pune Tribunal in the above referred
case has held that there was a reasonable cause in presenting the appeal
belatedly before the ld. CIT(A), thereby condoning the delay in filing
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of the appeal. Following the view, we condone the delay in presenting
the appeals before the ld. CIT(A).
The next issue assailed in the instant batch is about the limitation.
Taking cognizance of the amendment carried out to the provisions of
section 201(3) by the Finance (No.2) Act, 2014 substituting the sub-
section (3) w.e.f. 01-10-2014, we have held in our above referred order
that the order u/s.201(1)/201(1A) was not time barred. Following the
view taken therein, the ground raised by the assessee on this score is
not allowed.
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 ITA No.277/Nag/2022, 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
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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.
In the ultimate conclusion, we set aside the impugned orders and
send the matter back to the respective AOs for passing fresh orders u/s
201(1)/(1A) in the light of above directions. In case it is found that the recipients included the amount of interest in their total income, then the
assessee should not be treated in default in terms of section 201(1).
Needless to say, the assessee will be allowed adequate opportunity of hearing in such fresh proceedings.
In the result, all the appeals are partly allowed in above terms.
Order pronounced in the Open Court on 28th August, 2023.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT
पुणे / Pune; �दनांक / Dated : 28th August, 2023 Satish
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आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr.CIT concerned. �वभागीय �!त!न"ध, आयकर अपील�य अ"धकरण, “नागपुर” ब&च, 4. / DR, ITAT, “Nagpur” Bench गाड) फ़ाइल / Guard File. 5. // True Copy // आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपील�य अ"धकरण, पुणे / ITAT, Pune
Date 1. Draft dictated on 23-08-2023 Sr.PS 2. Draft placed before author 28-08-2023 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *