By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Bhadresh Doshi Chartered Accountants
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S/s. 197A(1A), 201, 201(1A) – Delay in filing declarations with the jurisdictional CIT does not attract provisions of section 201 and such assessee cannot be held to be an assessee in default u/s. 201(1A).
Facts:
Survey was conducted on Gurgaon Branch of the assessee, a nationalised bank. In the course of the survey, it was found that the said branch of the assessee had short deducted tax at source in some cases and in some cases, it had not deducted tax at source. It was the case of the bank that it had obtained Form No. 15G and Form No. 15H but had not filed the same with the CIT. The Assessing Officer (AO) rejected the contentions of the assessee and determined the tax payable u/s. 201 at Rs. 3,59,950 and interest payable thereon u/s. 201(1A) at Rs. 1,61,955.
Aggrieved, the assessee preferred an appeal to the CIT(A) who upheld the action of the AO.
Aggrieved, the assessee preferred an appeal to the Tribunal.
Held:
The Tribunal noted that the assessee had mentioned in a letter dated 16-02-2010 filed with ITO(TDS) that it is submitting Forms 15G/15H alongwith a request to condone the delay. The Tribunal held that unless it is proved that Form No. 15G and 15H were not in fact submitted by loan creditors, the assessee cannot be blamed because at the time of paying interest to loan creditors, the assessee payer, has per force to rely upon the declarations filed by the loan creditors and the assessee was not expected to embark upon an inquiry as to whether the loan creditors really and in truth have no taxable income on which tax is payable. If such kind of duty is cash upon the assessee payer, that would be putting an impossible burden on the assessee.
The Tribunal following the decision of the Mumbai Bench in the case of Vipin P. Mehta vs. ITO (11 Taxmann.com 342)(Mum) held that if the assessee has delayed the filing of declaration with the office of the jurisdictional CIT, within the time limit specified in the Act, that is a distinct omission or default for which penalty is prescribed. Merely because there was a failure on the part of the assessee bank to submit these declarations to the jurisdictional Commissioner within time, it cannot be held that the assessee did not have declarations with him at the time when the assessee Bank paid interest to the payees.
The Tribunal allowed all the three appeals filed by the assessee.
