TMI Blog2018 (8) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of interest on the FDRs of the Agra Development Authority. - No penalty - Decided in favor of assessee. - I.T.A No. 203, 204, 205/Agra/2018 - - - Dated:- 7-8-2018 - SHRI A. D. JAIN, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER Revenue by : Shri Waseem Arshad, Sr.DR. Assessee by : Shri R.C. Tomar, AR. ORDER Per, A. D. Jain, Judicial Member These are Department s appeals for Assessment Years 2012-13 and 2013- 14, respectively, against the deletion of penalty levied u/s 271C of the IT Act, on ground of non TDS on interest income accrued on FDRs. 2. Since a common issue is involved in all these three appeals, they are being disposed of by this composite order. For convenience, the facts are bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity, is closely identified with the state government, and its key decision-makers are government officials, which, in my opinion, was sufficient reason for the appellant bank to be under the bonafide belief that no TDS was to be deducted in that case. My view gets supported by the fact that after conducting discreet inquiries and verification by way of a survey conducted under section 133A (1), such default could be detected by the department only in the case of Agra Development Authority and not in relation to a large number of its customers. Therefore, in light of the facts of the case, arguments and judicial precedents in this regard, I am inclined to conclude that there existed a reasonable cause with the appellant not to deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d strong reliance on the impugned orders. 6. Heard. As available from the assessment order in ITA No. 203/Agra/2018 (para 5 thereof), vide replies dated 28.02.2013 04.03.2013 viz-a-viz defaults u/s 194A, the assessee bank submitted that the TDS on the payments of interest was not deducted in view of the copy of registration Certificate u/s 12AA dated 24.09.2003 as provided by the ADA and under the presumption that the ADA is a Government charitable body. As soon as the deductor-assessee came to notice that the provisions of section 194A are applicable in the case of payment of interest on FDR of ADA, it started to deduct tax at source and accordingly, deducted TDS during 2012-13. The act of non deduction of tax during financial years 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee bank, as above, does not constitute a reasonable cause within the meaning of section 273B of the Act. Reference by the Department, in these facts, to Hindustan Coca Cola Beverage Pvt. Ltd. Vs. CIT , 293 ITR 226 (SC), is of no aid to it. It also remains a fact, as noted for the assessment year (para 6 of the penalty order) for A.Y. 2012-13, that the AO, on verifying the documents filed by the bank, found that the Agra Development Authority had paid the requisite taxes for F.Ys. 2010-11 and 2011-12, relevant to A.Y. 2011-12 and 2012- 13. 10. Apropos A.Y. 2012-13, the assessee made TDS immediately on coming to note that the provisions of section 194A of the IT Act are applicable to payment of interest on the FDRs of the Agra Developme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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