TaxTMI 
TaxTMI 
2016 (2) TMI 1361
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....ot deducted tax at source on the interest payment to M/s V.S.V.N. Polytechic, Virudhunagar u/s 194A of the Act. The depositor, M/s V.S.V.N. Polytechnic was found to be not eligible for exemption under the Income-tax Act, therefore, the bank remitted the entire TDS amount on 26.6.2013 and produced challan before the Assessing Officer. The Assessing Officer further found that in respect of 19 depositors, the assessee has paid interest exceeding Rs. 10,000/- and deducted tax. However, after receiving Form 15G/15H, the deductor bank made a reversal entry in the books of account and the tax deducted was not deposited to the Government account. The assessee explained before the Assessing Officer that the depositors are senior citizens and they fi....
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....se at all. Therefore, the CIT(A) ought not to have confirmed the order of the Assessing Officer. 4. On the contrary, Shri N. Madhavan, ld. Departmental Representative submitted that when the payment of interest exceeds Rs. 10,000/-, the assessee has no other option except to deduct tax as provided u/s 194A of the Act. If the recipients of the interest file Form 15H declaring that their income does not exceed the taxable limit then the assessee need not deduct tax at all. In this case, according to the ld. DR, Form 15H was not filed at the time of either payment of interest or credit of interest, therefore, the assessee has rightly deducted tax. After receiving Form 15H belatedly, the assessee refunded the tax deducted by reversing the entr....
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....st, may amount to non-deduction of tax. It cannot be construed as refund of tax by the assessee. Only by way of a book entry it was shown as deducted. Before the due date for depositing of the funds the assessee has received Form 15H, therefore, there was a statutory obligation on the part of the assessee to forward the Form 15H to the respective Commissioners. At the best, it can be said that there was a delay on the part of the respective depositors in filing Form 15H. When the recipients of the interest are not liable for taxation under the Income- tax Act, 1961 or they have filed the return of income and paid the taxes on the interest income, naturally, the assessee is not liable to pay the tax deducted u/s 201 of the Act. When the reci....