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2016 (8) TMI 408 - ITAT DELHI

2016 (8) TMI 408 - ITAT DELHI - TMI - Violation of provisions of section 194A read with section 197A - short deduction of TDS - Held that:- Revenue has disputed the deletion of liability of ₹ 30,01,627/- (correct figure ₹ 29,90,256) on account of TDS of interest paid in respect of depositors for whom Form 15G and 15H were not furnished at the time of survey but certainly made available during the appellate / assessment proceedings for which, no adverse observations made in the Remand .....

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section 197 of the Act, which as submitted above in light of the judgment is absolutely not tenable. In view of the aforesaid discussions and precedent relied upon, as aforesaid, Ld. CIT(A) has passed a well reasoned and speaking order and rightly held that assessee did not wilfully or contumaciously act in disregard of its objection under the law and the mistake was bonafide and no loss to revenue occurred for failure in submission of the Form 15G/15H in time. Hence, the order of the Ld. CIT(A) .....

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ollowing grounds:- 1. That the Ld. CIT(A), Rohtak has erred in deleting the demand raised on account of short deduction of TDS of ₹ 26,59,099/- and interest thereon of ₹ 3,42,527/- with respect to cases where Form No. 15G/15H were late submitted in violation of provisions of section 194A read with section 197A. 2. The Ld. CIT(A), Rohtak has erred in accepting the contentions of the assessee that it had not wilfully or contumaciously acted in disregard of law and the mistake was bonaf .....

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he time of hearing of appeal. 2. The brief facts of the case are that a TDS Inspection u/s 133A was conducted on the assessee PR on 01/09/2011. During the course, of inspection, part information and the documents were furnished by the assessee PR. The summon u/s 1 31 of the I. T. Act, 1961 were issued to the P.R. for furnishing the. remaining information on 06/09/2011. The proceedings were attended from time to time by the P.R. or its representative. Later on, the final show cause notice dated 2 .....

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ls submitted by the Assessee PR, AO further observed that the assessee PR has credited /paid interest on time deposits/FDRs/MMCs a/cs in excess of ₹ 10000/- as on 30.09.2009, but no deduction of tax at source has been made by the assessee PR on these interest payments as per the provision of section 194A of the I.T. Act, 1961. During the course of inspection proceeding on 01/09/2011, the statement of Shri Puran Singh, Branch Manager, was recorded on oath and was asked to explain as to why .....

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Survey/2011-12/2702 dated 24.1.2012, the assessee PR was again asked to show cause as to why he may not be treated as an assessee in default uls 201 (1) of the I. T. Act 1961 for non-deduction of tax at source on interest payments to different persons for violation of provisions of section 194A of the I.T. Act, 1961. In response to the same, assessee filed his reply. After considering the reply of the assessee, AO observed that assessee PR has failed to deduct tax at source on the interest payme .....

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nce, the assessee PR is treated to be an assessee-in-default uls 201(1) & 201(IA) of the LT. Act 1961 for violating the provisions of section 194A read with section 206AA of the LT. Act 1961. Hence the assessee PR is treated to be an assessee-in-default under section 201(1) & 201(IA) of the I.T. Act 1961 for its violation of the provisions of the section 194A of the I.T. Act 1961. Thereafter, the AO passed the order u/s. 201(1) & 201(IA) of the Income Tax Act, 1961 and made the follo .....

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r passed by the AO and reiterated the contentions raised in the grounds of appeal filed by the Department and requested that the Appeal of the Revenue may be allowed. 6. On the contrary, Ld. Authorised Representative of the Assessee relied upon the order of the Ld. CIT(A) and stated that the issue in dispute is squarely covered by the following cases and requested that by following the same, the Appeal of the Revenue may be dismissed. - 145 ITD 370 (Mum) Karwat Steel Traders vs. ITO - 46 SOT 71 .....

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s impugned order dated 25.11.2014 vide para no. 3 & 4 at page no. 6 and held as under:- 3. The submissions made by the appellant, the facts on record and the remand report reveal that the issues in this case are twofold. Firstly, the income from FDR is covered by the Circular No. 699 dated 30.01.1995 and Circular No. 4/2002 dated 16.07.2002. The first circular refers to entries whose income is exempt from income tax u/s 10(20) & (20A) of the IT Act. In this case income from interest on F .....

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the same and that cannot be taken as a ground not to admit the same. I, therefore, admit the additional evidence filed by the appellant in the interest of justice. As far as late submissions of Form No 15G/15H is concerned, it is apparent that in the present case, the appellant did not wilfully or contumaciously act in disregard of its objection 'under law. The mistake was bonafide and no loss to revenue occurred for failure to file the same. However, a perusal of the list of interest paymen .....

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letion of liability of ₹ 30,01,627/- (correct figure ₹ 29,90,256) on account of TDS of interest paid in respect of depositors for whom Form 15G and 15H were not furnished at the time of survey but certainly made available during the appellate / assessment proceedings for which, no adverse observations made in the Remand Report of the AO. Moreover, there is no loss to the Revenue. I further find that the Hon ble Punjab & Haryana High Court in the case of CIT vs. State Bank of Pati .....

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H was not required to be filed. The Tribunal also noticed that even the departmental representative admitted that there was no loss of revenue involved in the matter. The Tribunal, therefore, held that since the assessee was neither required to deduct tax at source nor any loss of revenue had occurred on this account the default committed by the assessee in not filing Form No. 15H received by it from various depositors within the stipulated period, was only of technical nature for which no penal .....

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