2023 (9) TMI 745

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....siness. Section 194A mandates that tax has to be deducted at source in respect of interest paid/credited to the account of the customers. A spot verification in some branches of the assessee bank was conducted in March, 2016 and default in compliance was found anent to the TDS provisions under the section. Information was collected from Zonal office as regards the branches paying/crediting interest to customers' accounts, for an amount in excess of the basic exemption limit, without deduction of tax at source on receiving Form Nos.15G/15H. On perusal of such information, the AO noted four cases, as tabulated on page 4 of his order, where interest paid was more than the basic exemption limit but no deduction of tax at source was made on receiving Form Nos.15G/15H. After considering the reply and getting partially satisfied, the AO held the assessee to be in default u/s. 201 to the tune of Rs. 1,90,801/-. 4. The assessee filed appeal before the ld. CIT(A) which was delayed by 633 days. After granting credit in respect of Corona period, the ld. CIT(A) observed that still there was delay of 324 days. The assessee tendered explanation in support of the delay, as has been recorded in ....

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....held the orders u/s 201(1) as time barred by noting that the period of two years from the end of the financial year in which the statement for the last quarter was filed, expired prior to 1.10.2014, being, the date from which the substituted sub-section (3) came into existence. Instantly, we are dealing with the financial year 2011-12. The statement for the last quarter in this case was filed on 15.5.2012. A period of two years from the end of the financial year in which the last statement was filed expires on 31.3.2015. By that time, the substituted sub-section (3) has already come into place. Hence the case gets covered under the substituted provision. 8. The substituted sub-section (3) of section 201 w.e.f. 01-10-2014 has done away with the two classifications in the earlier provision, viz., where the statement is filed by the person responsible and where no such statement is filed. The time limit under the substituted provision is seven years from the end of the financial year in which the payment is made or credit for the income is allowed. The order u/s 201(1)/(1A) came to be passed in this case on 27.3.2019, which is within a period of seven years from the end of the fina....

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....esponsibility of the deductor to deduct tax at source under the relevant provisions. When the person responsible fails to deduct tax at source or pay after deducting, he is to be treated as an assessee in default. The deductor is relieved from this obligation with the payee including such income in his total income and directly paying tax thereon. In the absence of the recipient paying tax directly, the obligation of the person responsible remains as it is. Another thing which follows from this Explanation is that where the assessee (i.e. the payee) has paid tax directly, the person responsible gets discharged from the obligation in respect of such tax u/s 201(1). It has no application qua the interest payable in terms of section 201(1A) of the Act. 12. Adverting to the facts of the instant case, it is found as an admitted position that the assessee did not deduct tax source on the interest payment made to its customers in respect of which it has been treated as an assessee in default u/s. 201(1). However, there is no material to show that the recipient also paid such tax directly. The contention of the ld. AR that on receipt of Form No.15G/15H, its obligation is discharged and ....

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....asic exemption limit. Thus, on a harmonious construction of the above provisions, it is manifest that a bank can receive form no. 15G and need not deduct tax at source only in the cases, where the declaration is given that the tax liability on total income including the interest income will be Nil provided the interest income does not exceed the basic exemption limit. But where the interest income exceeds the basic exemption limit, the bank needs to deduct tax at source notwithstanding the furnishing of declaration in Form No. 15G and the bank will be treated as assessee in default u/s 201(1), where not only it failed to deduct tax at source but the customer also failed to pay such tax directly. Reverting to the order u/s. 201(1)/201(1A), it is seen that the AO took up only those cases for treating the assessee in default where the customers furnished Form No. 15G and the amount of interest income exceeded the basic exemption limit. 14. Further, sub-section (1C) of section 197A provides that notwithstanding anything contained, inter alia, in section 194A, no deduction of tax shall be made in the case of any individual resident in India who is of the age of 60 years or more at an....