Tribunal overturns Assessing Officer's decision, deems higher TDS rate a typographical error.

The Tribunal allowed the appellant's appeal, ruling that the incorrect application of a higher TDS rate due to a wrong PAN in the original return was a typographical error rectified in the revised return. The correct PAN was available, justifying the lower TDS rate. The demand for short deduction of TDS and interest imposition was deemed unjustified, leading to their deletion. The appellant's compliance with statutory provisions was upheld, and the Assessing Officer's decision was overturned.

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Issues:
1. Incorrect TDS rate applied due to wrong PAN in TDS return.
2. Discrepancy in TDS deduction leading to demand and interest imposition.
3. Appeal against the order of the CIT(A) regarding TDS deduction.

Detailed Analysis:
1. The appeal was filed against the CIT(A)'s order concerning the incorrect TDS rate applied on interest payment due to a wrong PAN in the TDS return. The issue revolved around the applicability of section 206AA of the Income Tax Act, 1961, which mandates a higher TDS rate of 20% in case of non-availability of PAN, compared to the normal rate of 10%. The appellant contended that the correct PAN was available, and the wrong PAN was a result of a typographical error in the original TDS return. The correct PAN was later updated in the revised return, which was accepted by the department. The appellant argued that the demand for short deduction of TDS and interest was unjustified due to the rectification made in the revised return.

2. The brief facts of the case highlighted that the appellant, a nationalized bank, deducted TDS at 10% for a payee but was required to deduct at 20% due to a wrongly quoted PAN. This led to a demand of Rs. 8,780 for short deduction of TDS and an interest levy of Rs. 1,025. The CIT(A) confirmed the Assessing Officer's action, resulting in the appellant filing an appeal before the Tribunal. The appellant emphasized that the correct PAN was available, and the error was inadvertent, corrected in the revised return. The appellant argued that penalizing for a clerical error in quoting the PAN was unwarranted, especially when compliance with statutory provisions was maintained.

3. The Tribunal, after considering the submissions, found that the incorrect TDS rate application was a result of a clerical error in the TDS return due to a typographical mistake. It noted that the correct PAN was available with the appellant, and the mistake was rectified in the revised return, which was accepted by the department. The Tribunal opined that penalizing the appellant for a rectified error was unjustified. Relying on case laws and circulars, the Tribunal held that the Assessing Officer's decision to adopt a 20% TDS rate was incorrect. Consequently, the demand of Rs. 8,780 and interest of Rs. 1,025 were deleted, and the appeal of the assessee was allowed. The judgment was pronounced on 18th August 2016.

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