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2016 (2) TMI 116 - ITAT PANAJI

2016 (2) TMI 116 - ITAT PANAJI - TMI - TDS u/s 194A - non deduction of tds on interest by assessee bank - CIT(A) holding the assessee bank as “Assessee in Default” under sec. 201(1) and raising demand - Held that:- It is not in dispute that the recipient of interest income i.e. Visvesvaraya Technological University has filed its return of income and has included the interest paid by the assessee as its income in the said return of income. As per sec. 4 of the Income Tax Act, it is the recipient .....

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the Assessing Officer for verification of additional evidence filed by the assessee in Form 26A and thereafter adjudicate afresh after taking into consideration the decision of the Hon‟ble Supreme Court in the case of Hindustan Coca Cola Beverage P. Ltd. (2007 (8) TMI 12 - SUPREME COURT OF INDIA ) and the observations made hereinabove and after allowing reasonable opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purpose. - ITA Nos. 329 to 331/PNJ/2015 .....

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nsideration is that the Commissioner of Income Tax (Appeals) erred in confirming the order of the Assessing Officer holding the assessee bank as Assessee in Default under sec. 201(1) and raising demand of ₹ 2,38,735/- in the Assessment Year 2011-12, ₹ 2,81,260/- in the Assessment Year 2012-13 and ₹ 3,11,602/- in the Assessment Year 2013-14 including interest under sec. 201(1A) of the Act. 3. Brief facts of the case are that the assessee is a banking company engaged in the busin .....

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th the provisions of sec. 194A(3)(i)(b) of the Act @ 10%, which it had failed to comply with. The assessee contended before the Assessing Officer that tax was not deducted in respect of payment to Visvesvaraya Technological University as it was existing solely for educational purposes and not for purposes of profit and wholly and substantial financed by the Government and is exempt from income tax under the provisions of sec. 10(23)(iiiab) of the Act and therefore, no liability to tax arose and .....

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The Assessing Officer observed in his order that Hon‟ble Karnataka High Court, Dharwad Bench vide its order dated 20/12/2013 in the case of Visvesvaraya Technological University Vs. ACIT (2014) 362 ITR 279 (Karn.) upholding the order of the Tribunal, has categorically stated that Visvesvaraya Technological University was not entitled to exempt under sec. 10(23)(iiiab) of the Income Tax Act, 1961. According to the Assessing Officer, as the Hon‟ble High Court has held that income of V .....

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interest paid on term deposits to Visvesvaraya Technological University and the Assessing Officer by passing an order under sec. 201(1) and 201(1A), determined the amounts payable under sec. 201(1)/(1A) amounting to ₹ 1,62,407/- and ₹ 76,328/- respectively, totalling to ₹ 2,38,735/- in the Assessment Year 2011-12; ₹ 2,08,355/- and ₹ 72,905/- respectively, totalling to ₹ 2,81,260/- in the Assessment Year 2012-13 and ₹ 2,53,343/- and ₹ 58,259/- respe .....

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of income and has paid the tax due on the income declared by him in such return of income and the person furnishes a certificate to this effect in Form 26A. The assessee submitted that Visvesvaraya Technological University has confirmed that they have filed the return of income and has provided Form 26A which was filed before the Commissioner of Income Tax (Appeals). 6. The Commissioner of Income Tax (Appeals) after considering the submissions of the assessee observed that the proviso to sec. 2 .....

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its income for the relevant assessment years. No taxes had been paid by the deductee even while filing its return in response to notice under sec. 148. No certificate was furnished from the Chartered Accountant in Form No. 26A during the initial stage of the proceedings. Therefore, Commissioner of Income Tax (Appeals) dismissed the appeal of the assessee. 7. Before us, Authorized Representative of the assessee filed an application for admission of additional evidence in the form of Form No. 26A .....

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s CIT reported in (2007) 293 ITR 226 (SC) has held that since the assessee had paid interest under sec. 201(1A) and there was no dispute that the tax due had been paid by the deductee, the appellate Tribunal came to the right conclusion that the tax could not be recovered once again from the assessee. It was the submission that as the Visvesvaraya Technological University, to whom the interest was paid by the bank, had filed its return of income and paid tax thereon, the assessee was not liable .....

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/- in the Assessment Year 2013-14 without deducting TDS thereon to Visvesvaraya Technological University. As the total payment of interest exceeded to ₹ 10,000/- during the year, therefore, the Assessing Officer treated the assessee as assessee in default‟ under sec. 201(1)/(1A) for failure to deduct TDS under sec. 194A of the Act and held the assessee liable for ₹ 2,38,735/- in the Assessment Year 2011-12, ₹ 2,81,260/- in the Assessment Year 2012-13 and ₹ 3,11,602/ .....

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by the Chartered Accountant. Further, it was also the submission that the as the deductee Visvesvaraya Technological University has paid taxes on the interest income by filing its return of income, the assessee was not liable under sec. 201(1) in view of the decision of the Hon‟ble Supreme Court in the case of Hindustan Coca Cola Beverage P. Ltd. (supra). 12. The contention of the Departmental Representative before us is that as the Form No. 26A is filed by the assessee as additional evide .....

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t of the decision of Hon‟ble Supreme Court in the case of Hindustan Coca Cola Beverage P. Ltd. (supra). 13. We find that it is not in dispute that the recipient of interest income i.e. Visvesvaraya Technological University has filed its return of income and has included the interest paid by the assessee as its income in the said return of income. As per sec. 4 of the Income Tax Act, it is the recipient of interest who is liable to pay tax. The machinery of TDS provisions made in statute is .....

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