Income Tax Appellate Tribunal - Bangalore
The Karur Vysya Bank Limited, Bellary vs Acit-Tds Circle, Hubli on 9 August, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH : BANGALORE
BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER
AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
ITA No.1854/Bang/2016
Assessment year : 2013-14
The Karur Vysya Bank Ltd., Vs. The Assistant Commissioner of
Bellary Branch, Income Tax,
Bellary. TDS Circle,
PAN: BLRKO 7236F Hubli.
APPELLANT RESPONDENT
Appellant by : Shri S. Ananthan, CA &
Smt. Lalitha Rameswaran, CA
Respondent by : Shri Jeevan J. Neetalgi, Standing Counsel
Date of hearing : 22.05.2017
Date of Pronouncement : 09.08.2017
ORDER
Per Sunil Kumar Yadav, Judicial Member
This appeal is preferred by the assessee against the order of CIT(Appeals) inter alia on the following grounds:-
"1. 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) erred in upholding the order of the Assessing Officer passed u/s 201(1) & 201(A) of the Income Tax Act for non/less deduction of tax at source.
3. The learned Commissioner of Income Tax (Appeals) erred in not appreciating that the Branch had obtained Form 15H/15G in all the cases.ITA No. 1854/Bang/2016 Page 2 of 6
4. The learned Commissioner of Income Tax (Appeals) failed to appreciate the fact that non submission of Form 15G/15H to the jurisdictional CIT is only a technical breach and as such the appellant cannot be construed as an assessee in default.
5. Without prejudice to the above, the 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 the hearing of this appeal, the appellant prays that its appeal be allowed."
2. Though various grounds are raised in this appeal, but they all relate to non-deduction of TDS on account of which assessee was held to be in default and the AO has passed an order u/s. 201(1) & 201(1A) of the Income-tax Act, 1961 ["the Act"].
3. During the course of hearing, the ld. counsel for the assessee has submitted that assessee is a bank where TDS was not deducted on interest earned on FDRs to its customers. The reason for non-deduction of tax at source was stated to be the submission of Form 15G/15H by the customers. Since the aforesaid Form was not submitted to the jurisdictional CIT, the AO has held the assessee to be in default for non-deduction of tax at source.
4. The assessee preferred an appeal before the CIT(Appeals) with the submission that TDS was not deducted on account of submission of Form 15G/15H by the customers, therefore the assessee cannot be held to be in default; but the CIT(Appeals) was not convinced with the contention of the ITA No. 1854/Bang/2016 Page 3 of 6 assessee and he confirmed the order passed u/s. 201(1) & 201(A) of the Act.
5. Now the assessee is in appeal before the Tribunal with the submission that undisputedly TDS was not deducted on account of receipt of Form 15G/15H. There may be irregularity in submission of the Form 15G/15H before the jurisdictional CIT. But when the assessee has furnished the Form before the CIT(Appeals), the CIT(Appeals) should have taken cognizance of the same and after having examined it, allowed the relief to the assessee. But instead of doing so, the CIT(Appeals) has confirmed the order of AO.
6. The ld. counsel for the assessee has further invited our attention to various judicial pronouncements in which it has been repeatedly held that if there is any irregularity in submission of Form, the same may be regularised by re-examining the veracity of the Forms and if the Forms are proper and TDS was not deducted on account receipt of the said Forms, no order u/s. 201(1) & 201(1A) can be passed. The judgments referred to by the assessee are as under:-
1. DCIT v. Vijaya Bank, 2014 (11) TMI 717-ITAT Vishakapatnam.
2. Narasu's Spinning Mills v. ACIT, 2015 (12) TMI 1553 - ITAT Chennai.
3. Malineni Babulu (HUF) v. ITO, 2015 (8) TMI 705 - ITAT Hyd.
4. Vijaya Bank v. ITO, 2014 (3) TMI 539 - ITAT Del
5. DCIT (TDS) v. Jai Prakash Associates Ltd., 2015 (5) TMI 356 -
ITAT Lucknow.
ITA No. 1854/Bang/2016Page 4 of 6
7. The ld. DR placed reliance upon the order of CIT(Appeals).
8. Having carefully examined the orders of lower authorities in the light of rival submissions, we find that though assessee has furnished Form 15G/15H before the CIT(Appeals), but the CIT(Appeals) did not examined the veracity of the same. He outrightly rejected the contention of the assessee and confirmed the order of AO, having observed that the Forms 15G/15H were not properly filed before the AO and the jurisdictional CIT. We have also carefully examined the judgments referred to by the assessee and we find that it has been repeatedly held that wherever there is any irregularity in the submission of Forms for non-deduction of tax at source, the assessee cannot be held to be in default. Rather the AO should verify the correctness of the Forms and if the Forms are found to be correct, the assessee cannot be held to be in default and no demand can be raised u/s. 201(1) & 201(1A) of the Act.
9. Turning to the facts of the case, we find that undisputedly assessee has submitted the Forms 15G/15H before the AO, but it was not considered on account of its non-submission in time before the jurisdictional CIT and the AO passed an order u/s. 201(1) & 201(1A) of the Act raising a demand therein. The assessee again filed the said Forms before the CIT(Appeals), but he did not take cognizance of the same and confirmed the order of AO. Since the assessee has filed the Forms 15G/15H on account of which TDS ITA No. 1854/Bang/2016 Page 5 of 6 was not deducted, the lower authorities should have examined the same. Since the assessee has already filed the Forms 15G/15H before the lower authorities, we are of the view that the said Forms be examined by the AO and if the said Forms are found to be correct on verification, the assessee cannot be held to be in default and no demand should be raised u/s. 201(1) & 201(1A) of the Act. Otherwise, the AO may act in accordance with the law. Accordingly, the order of CIT(Appeals) is set aside and the matter is restored to the file of Assessing Officer to readjudicate the issue afresh in the terms indicated above, after affording opportunity of being heard to the assessee.
10. In the result, the appeal of assessee is allowed for statistical purposes.
Pronounced in the open court on this 9th day of August, 2017.
Sd/- Sd/- ( INTURI RAMA RAO ) (SUNIL KUMAR YADAV ) Accountant Member Judicial Member Bangalore, Dated, the 9th August, 2017. / Desai Smurthy / ITA No. 1854/Bang/2016 Page 6 of 6 Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file By order Senior Private Secretary ITAT, Bangalore.