TMI Blog2014 (3) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee Bank had the declaration of the payees in the prescribed form with it at the time when the interest was paid to the respective customers, the assessee cannot be held to be liable to deduct tax therefrom u/s 194A of the Act - if the assessee Bank was not liable to deduct tax at the time of payment of interest, then section 40(a)(ia) of the Act is not attracted and the assessee cannot be held liable to pay tax as assessee in default and interest - for non-filing of Form No. 15G and 15H within the prescribed time, there is a provision of penalty u/s 272A(2)(f) of the Act which is not a case of the department in the present appeal – thus, the order set aside – Decided in favour of Assessee. - I.T.A. No. 2672/Del/2013, I.T.A. No. 2673/Del/2013, I.T.A. No. 2674/Del/2013 - - - Dated:- 14-3-2014 - Shri G. D. Agrawal And Shri Chandra Mohan Garg,JJ. For the Appellant : Shri S. Ananthan, Mrs. Lalitha Rameswaran For the Respondent : Shri Gagan Sood, Sr.DR ORDER Per Chandramohan Garg, J.M. These appeals have been preferred by the assessee against the separate orders of Commissioner of Income Tax(A-2), Faridabad dated 20.02.2013 in Appeal No. 6/GGN/2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Income Tax(A) failed to appreciate the fact that the order passed by the Assessing Officer was time barred and there was no short deduction of tax. Ld. counsel of the assessee further submitted that the Commissioner of Income Tax(A) was not justified in not appreciating the important fact that the branch had obtained Form No. 15 H and 15G in all the cases and non-submission of the same was only a technical breach and as such, assessee cannot be construed as an assessee in default. Ld. AR further pointed out that the assessee cannot be held as assessee in default without proving that the recipient of the income has not paid the tax. 5. During the arguments, Authorized representative of the assessee placed reliance on various decisions of Coordinate benches of Tribunal including decision of ITAT, Mumbai Bench F in the case of Vipin P. Mehta vs ITO (2011) 11 Taxmann.com 342 (Mum); decision of ITAT Pune Bench A in the case of Gokuldas Virjibhai Company vs ITO (2010) 27 taxmann.com 26 (Pune) and decision of ITAT Mumbai Bench A in the case of Karwat Steel Traders vs ITO (2013) 37 taxmann.com 190 (Mumbai) and submitted that it is an undisputed fact that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be made by the assessee. The revenue authorities have doubted the assessee's version because according to them it is only when the Assessing Officer proposed the disallowance of the interest by invoking the section 40(a)(ia) in the course of the assessment proceedings that the assessee filed the declarations claimed to have been submitted to him by the payees of the interest, in the office of the CIT(TDS) as required by sub-section 2 of section 197A. Apart from this inference, there is no other evidence in their possession to hold that the declarations were not submitted by the payees of the interest to the assessee at the time when the payments were made. Without disproving the assessee's claim on the basis of other evidence, except by way of inference, it would not be fair or proper to discard the claim. The Assessing Officer has not recorded any statements from the payees of the interest to the effect that they did not file any declarations with the assessee at the appropriate time or to the effect that they filed the declarations only at the request of the assessee in September/October, 2008. In the absence of any such direct evidence, we are unable to reject the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (4) of section 272A, no penalty can be imposed unless the assessee is given an opportunity of being heard. All these provisions indicate that the failure on the part of the assessee, who is the payer of the interest, to file the declarations given to him by the payees of the interest, within the time limit specified in sub-section (2) to section 197A is distinct and separate and merely because there is a failure on the part of the assessee to submit the declarations to the income-tax department within the time limit, it cannot be said that the assessee did not have declarations with him at the time when he paid the interest to the payees. That would be a separate matter and separate proof and evidence is required to show that even when the assessee paid the interest, he did not have the declarations from the payees with him and therefore he ought to have deducted the tax from the payment. No such evidence or proof has been brought by the department. (Emphasis supplied by us) 8. In the case of Gokuldas Virjibhai Company, ITAT, Pune Bench interpreted the relevant provisions of the Act and liability of the assessee in regard to Form No.15G and 15H as under:- 14. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer and CIT(A) erred in considering that non-filing of form 15H invites disallowance u/s. 40(a)(ia). (Emphasis supplied by us) 10. During the argument, ld. AR submitted a copy of the letter submitted before ITO(TDS) dated 16.02.2010 wherein it has been submitted that all related Form nos. 15G/15H have already been submitted with the office of the ITO with a request to ignore the delay in submission of the same. In view of above, we hold that unless it is proved that Form No. 15G and 15H were not in fact submitted by loan creditors, the assessee cannot be blamed because at the time of paying interest to loan creditors, the assessee payer has to per force rely upon the declarations filed by the loan creditors and the assessee was not expected to embark upon an inquiry as to whether the loan creditors really and in truth have no taxable income on which tax is payable. If such kind of duty is cast upon the assessee payer, that would be putting an impossible burden on the assessee. 11. In the present set of facts and circumstances of the case, we are of the view that apart from sub-section (1A) of section 197A which merely requires a declaration to be filed by the payee o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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