Income Tax Appellate Tribunal - Jodhpur
Income Tax Officer vs Pearl Organic Coatings on 1 July, 2004
Equivalent citations: (2004)84TTJ(JODH)802
ORDER
Hari Om Maratha, J.M.
1. This appeal has been filed by the Revenue against the order of learned CIT(A), dt. 23rd Dec., 1996, which pertains to asst. yr. 1996-97.
2. At the time of hearing, Shri N.R. Mertia was present on behalf of the assessee and Shri D.R. Zala was present on behalf of the Department.
3. The only issue raised in this appeal is regarding the allowing of relief of Rs. 8,818 cancelling the order under Sections 201(1) and 201(1A) of the Act passed by AO.
4. The facts, in brief, are that interest payments of depositor's account were credited on 30th March, 1996, without deduction of tax and the depositor had not filed declaration under Section 197A(1A) of the IT Act, 1961 by the time. However, declaration in Form No. 15H had been filed on 16th Aug., 1996 and the deduction was claimed to have not been made by the responsible person for the reason that he had been informed by the interest recipients that they were going to file Form No. 15H. The case of the Department is that it is the requirement of the law that Form No. 15H should be in duplicate and in prescribed format and same should have been in a prescribed manner, filed within 7 days from the end of the month in which Form No. 15H had been received from the responsible person from the depositors to whom interest amounts were credited.
5. On the other hand, the case of the assessee is that the Rules do not prescribe for the filing of Form No. 15H by the recipients of the interest on information to the responsible person that they are going to file the form in question. It was beyond the control of the assessee because the responsible person cannot be held to be responsible for delay in furnishing the declaration of the interest recipients, As such, the delay is beyond the control, The responsible person, therefore, cannot be held as assessee in default under Section 201. The CIT(A) accepted this contention of the responsible person. Now, the Department is aggrieved.
6. We have heard the learned rival representatives and have perused the evidence on record.
7. The learned Departmental Representative has relied on the orders of AO and learned Authorised Representative has relied on the order of the CIT(A). In addition, the same arguments have been reiterated as were taken before lower authorities. The learned Authorised Representative has relied on the Circular No. 346, dt. 30th June, 1982, reported in (1982) 138 ITR 34 (St), wherein relaxation of provisions relating to deductions of tax on payment of interest on securities, dividends and interest other than interest on securities--Section 197A has been done which is placed at p. 1 of paper book. The learned Authorised Representative has relied on the following part of the circular :
"With a view to enabling persons with income below the taxable limit to receive these categories of income without deduction of income-tax at source, the Finance Act has inserted a new Section 197A in the IT Act to provide that a person who is resident in India may receive such income without deduction of income-tax on his furnishing a declaration in writing (in duplicate) in the prescribed form and verified in the prescribed manner to the person responsible for making the payment. The declaration will have to be to the effect that the estimated total income of the declarant of the previous year including such interest on securities, dividend or other interest will be less than the minimum liable to income-tax. On the receipt of this declaration, the person responsible for making the payment will be required to deliver or cause to be delivered to the CIT who exercise the jurisdiction over him, one copy of the declaration on or before the 7th day of the month following the month in which the declaration is furnished."
8. The learned Authorised Representative has also relied on Circular No. 351, dt. 26th Nov., 1982, which is reported in (1983) 140 ITR (St) 20, wherein clarification regarding Section 197A of the Act r/w Rule 29C of the IT Rules has been given by the Department. The learned Authorised Representative has further submitted that the expression "person responsible for paying" is defined in Section 204 for the purpose of aforesaid sections according to which credit to the account does not fall under the definition and only in case payment is made, then and only then the responsible person becomes accountable. The learned Authorised Representative has further relied on the decision of the Tribunal in the case of Nanda General Stores v. Asstt. CIT 27 ITC 569, wherein it has been held as under :
"Deduction of tax at source--Consequences of failure to deduct or pay interest credited on 31st March, 1994, to the account of parties--Income-tax not deducted--Declaration under Section 197A dt. 3rd April, 1994 furnished by the payee--Declaration dispatched by registered posts on 7th April, 1994, to the ITO, TDS--AO levied tax and interest--Receipt of declaration a few days late by the assessee is only a technical mistake--Levy of tax and interest cancelled--IT Act, 1961, Sections 197A, 201(1A)."
9. In view of the above, it has been submitted that in view of declaration of Section 197A, no TDS was required to be made from the interest credited to the parties, the receipt of declaration and its forwarding to the office of ITO, TDS is not in dispute and even if the assessee has received a declaration a few days late, it is only a technical mistake for which no tax should be levied upon the assessee. The Tribunal in the above case cancelled the tax under Section 201 along with interest under Section 201(1A) of the Act.
10. In view of the circulars referred to and relied by the learned Authorised Representative and as well as clear-cut findings of the Tribunal of Jodhpur Bench, we are left with no option but to accept the version of the learned Authorised Representative; although making the credit or making payment may have some meaning in common parlance, but, in view of the circulars of CBDT, where, in its own wisdom, the CBDT has used different terminology, i.e., "credit or payment of" at one place and "responsible for paying" at one place, meaning thereby that only in case payment is actually made in those cases, the provisions are attracted. Further, following the Tribunal order under identical facts, we accept the version of the assessee and dismiss the grounds of appeal of the Department.
11. In the result, the appeal of the Department is dismissed.