TaxTMI 
TaxTMI 
2021 (12) TMI 1029
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....come Tax Department itself which had been taken away at the time of Survey and hence, the assessee was hampered from providing any details to the Commissioner of Income Tax (Appeals). 3. The Commissioner of Income Tax (Appeals) erred in upholding the Assessing Officer's order without considering the fact that the bank is a rural bank and most of the depositors being illiterate farmers resulting in incomplete forms that were available. For these grounds and for any other ground that may be adduced at the time of hearing, it is prayed that the Hon'ble Tribunal may be pleased to set aside the order of the Commissioner of Income Tax (Appeals) as erroneous, against the provisions of law and contrary to the facts and circumstances of the case, and render justice." 3. As the facts and grounds are materially identical in all these appeals, to dispose of these appeals, we refer to the facts from AY 2011-12 and the decision taken in this AY shall mutatis-mutandis apply to the other years as well. 4. Briefly the facts of the case as taken from AY 2011-12 are that M/s Sapthagiri Grameena Bank, a Regional Rural Bank constituted under the Regional Rural Banks Act and is assessable ....
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....mber filled and verified. Obtaining forms without any substance is of no use. The purpose of obtaining forms in the prescribed mode will be lost, if the declarants allowed to file the forms without fulfilling all the columns as applicable. Filing of declarations without fulfilling the mandatory fields is as good as non-filing of declarations. The declarations so filed on which the appellant is harping is as good as a dumb document and has no relevance. In view of this, it is established that the appellant who is duty bound to deduct TDS has failed and hence, the AO is right in invoking the provisions of Sec.201 (1)and Sec.201(1A) of the Act." 7. Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT. 8. Before us, the ld. AR of the assessee reiterated the submissions made before the CIT(A) and submitted that once the appellant bank has obtained the declarations forms from the depositors. it has no option but not to deduct the tax at source. The appellant bank has no legal obligation to deduct tax at source on the payments made to depositors. The income lax officer has no authority to verily whether the declaration forms have been filed before the Commissioner....
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....essee filed the decision of the coordinate bench of this Tribunal in assessee's own case in ITA Nos. 815 & 1233/Hyd/2015 for AYs 2010-11 & 2011-12 order dated 06/05/2016, in which, the disallowance made u/s 40(a)(ia) has been allowed by the Tribunal by observing as under: "8. Before us, the ld. AR submitted that the assessee bank has more than 100 branches in the districts of Chittoor and Krishna and substantially, all the branches are in rural areas including small villages, Panchayats etc. He submitted that the bank has paid interest of Rs. 73.39 Crores during the assessment year 2010-11 and had submitted before the Assessing Authority that the total amount of interest paid, in excess of Rs. 10,000/- per depositor which is the threshold limit prescribed under Section 194A, is Rs. 9,49,45,000/-. It is submitted that of the above, in respect of Rs. 2,75,90,000/- tax has been deducted and remitted. The balance amount of interest after this is Rs. 6,73,55,000/- and the assessee had submitted that it had obtained Form 15G/15H from the various parties. The Assessing Authority had, while completing the assessment, disallowed the entire amount of Rs. 6,73,55,000/- on the ground that Fo....
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....e paid without deduction of taxes wherever the interest is in excess of Rs. 10,000/-. When the system is in place, it would not be possible for the branch level officials to update the information without obtaining Form 15G or 15H. It is submitted that the assessee had submitted before the Commissioner that to the extent of what they could collect, they had submitted the forms which constitute more than 75% of the interest paid in excess of Rs. 10,000/-. The sample provided by the bank is substantially higher at 75% and generally, it could be relied on the system that has been in place. 8.3 It is submitted, the assessee had substantially demonstrated that it has a proper system in place for collecting and filing Form 15G and 15H and only due to paucity of time, it could not furnish Form 15G or 15H from all the parties. When more than 75% of deductions have been established, it is submitted that the assessee had demonstrated the existence of a regular system for deduction of taxes and in view of this, a view be kindly considered that where Form 15G or 15H have been confirmed to have been received by the assessee, the provisions of Section 40(a)(ia) are not applicable and the disal....
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....see as being the sponsored bank of Indian Bank. He submitted that bank had collected all the forms but due to the fact that the branches in rural areas and more than 100 branches are involved, it had faced difficulty in collecting the same from the branches due to efflux of time. Assessee had not submitted the break up of the forms which are not submitted. The majority of the interest payments are in the segment of Rs. 10,000 - 20,000 and Rs. 20,000 - 50,000. It is pertinent to note that the assessee is dealing with small farmers and agriculturist. Even otherwise customers (farmers-income is exempt for Income tax) are having received the interest at the extreme level in this group say Rs. 50,000/-, the income will be exempt automatically due to the fact that the basic exemption level of income tax available to AY 2008-09 was Rs. 1.50 lakh. Assessee had submitted that it had collected the Form 15G/15H from all the customers who are farmers. It had not submitted before the Assessing Officer will not become automatically assessee at default to call for the disallowance u/s 40(a)(ia). Considering the basic exemption limits, category of the customers are farmers and assessee had collect....