TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 539
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....ted the facts giving rise to these appeals are that the assessee is a nationalized bank in which majority of shares are held by Central Government having a branch in Gurgaon. The branch of the assessee bank had deducted the tax and also filed the relevant returns to the department. A survey was conducted on 15th December, 2009 on the assessee branch. During the course of inspection of the branch, the assessee had provided necessary documents called for by the tax authorities. During the survey, the inspecting officials observed that there was short deduction of tax in some cases and the branch has failed to deduct tax at source in some of the cases without obtaining Form No. 15G and Form No. 15H. Though the assessee bank had obtained Form No. 15G and Form No. 15H but the same was not submitted to the jurisdictional Commissioner of Income Tax within due time. Subsequently, Form NO. 15G and Form 15H were produced to the Assessing Officer. Rejecting the contentions and submissions of the assessee, the ld. Assessing Officer determined the tax payable u/s 201 of the Income Tax Act, 1961 (for short the Act) at Rs.3,59,950 and interest payable thereon u/s 201(1A) at Rs.1,61,955/-. Being a....
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....x(A) in the impugned order, the assessee obtained From No. 15G and 15H from the customers to whom payment of interest was made and no tax was deducted at source, at the same time it was the duty of the assessee to deliver these forms before 7th day of the month next following the month in which form was furnished to it. The DR supported the orders of the authorities below and submitted that the assessee Bank is duty bound to deliver and submit Form 15G and 15H to the jurisdictional Commissioner of Income Tax and omission in this regard is attributable to the assessee for which assessee has no bonafide reason. 7. On careful perusal of record and decisions relied by the assessee appellant, at the outset, we observe that undisputedly, the assessee Bank obtained Form No. 15G and 15H from the customers to whom the payment of interest was made and no tax was deducted at source. Further, we also observe that these forms were not submitted to the jurisdictional Commissioner of Income Tax, Faridabad within the prescribed time as per provisions of the Act. In the case of Vipin P. Mehta (supra), the Coordinate Bench of ITAT, Mumbai observed and held as under:- "7. In the present case the cl....
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....to whether the loan creditors really and in truth have no taxable income on which tax is payable. That would be putting an impossible burden on the assessee. That apart sub-section 1A of Section 197A merely requires a declaration to be filed by the payee of the interest and once it is filed the payer of the interest has no choice except to desist from deducting tax from the interest. The sub-section uses the word "shall" which leaves no choice to the assessee in the matter. In the case of payment of leave travel concession and conveyance allowance to employees who are liable to deduct tax from the salary paid to the employees under section 192, the Supreme Court has held in CIT Vs. Larsen & Toubro Ltd. (2009) 313 ITR 1, that the assessee was under no statutory obligation under the Act or Rules to collect evidence to show that the employee had actually utilized the money paid towards leave travel concession/conveyance allowance. The position is stronger under section 197A which does not apply to section 192, but which provides in sub-section (1A) that if the payee of the interest has filed the prescribed form to the effect that he is not liable to pay any tax in computing his total ....
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....erusal of decision of ITAT Mumbai Bench in the case of Karwat Steel Traders (supra), we observe that the same issue has been dealt in para 4.1 in favour of the assessee which reads as under:- "4.1 As can be seen from above provision, the amount cannot be allowed as deduction only in the event when tax is deductible at source under Chapter-XVII-B and such tax has not been deducted or, after deduction has not been paid. In this case, the assessee was to deduct tax under provisions of section 194A. Section 194A is further qualified by the provisions of section 197A(1A) wherein if a person furnishes a declaration in writing in prescribed Form and verified in the prescribed manner to the effect that tax on his estimated total income is to be included in computing his total income will be nil, there is no need to deduct tax The assessee has received such Forms as prescribed from those persons to whom interest was paid/being paid and accordingly no deduction of tax was to be made in such cases. The default for non- furnishing of the declarations to the CIT as prescribed may result in invoking penalty provisions u/s. 272A(2)(f), for which separate provision/ procedure was prescribed under....
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....his provision does not impose any obligation on the payer to find out the truth of the declaration filed by the payee. Respectfully following the decision of ITAT Mumbai Bench in the case of Vipin P. Mehta (supra), we are inclined to hold that if the assessee has delayed the filing of declaration with the office of the jurisdictional C.I.T., within the time limit specified in sub-section (2) of Section 197A, that is a distinct omission or default for which a penalty is prescribed. As per section 273B of the Act, no penalty shall be imposed under any of the clauses of sub section (2) of section 272A for the delay, if the assessee proves that there was a reasonable cause for the delay. We further observe that as per provisions of sub section (4) of section 272A of the Act, no penalty can be imposed unless the assessee is given an opportunity of being heard. The total effect of all these provisions indicate that there is a failure on the part of the assessee who is the payer of the interest, to file a declaration given to him by the payee of the interest, within the time limit specified in sub-section (2) to section 197A of the Act which is distinct and separate and merely because the....