TMI Blog2018 (11) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... ue to the fact that the Agra Development Authority had obtained certificates under Section 197 of the Act permitting the assessee Bank not to deduct tax at source on its interest income - Held that:- Found no aforesaid cause to be reasonable as in the earlier year no certificate under Section 197 of the Act was submitted by the Agra Development Authority and in that year necessary feeding was done in the computer system and the deduction of tax at source was made on the interest income. Thus, there was no occasion to commit the mistake of not deducting tax at source on interest income in time in the relevant years. It is pertinent to point out that due to certificates under Section 197 of the Act furnished by the Agra Development Authority no tax was deducted at source on the interest income in the Financial Year 2010-11 . The software was updated in the subsequent year with the result tax at source on interest income was deducted in the year 2011-12. Once the software was updated, there was no reason for any error in the subsequent year ie. 2012-13 and 2013-14. The finding of the tribunal on the above aspect is a finding of fact and when the cause shown has not been found to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt prior to the passing of the assessment order dated 15.03.2015 under Section 201 (1)/201 (1A) of the Act, penalty was sustainable. The appeal for the assessment year 2013-14 was admitted on the following substantial questions of law:- (i) Whether the ITAT was correct to restore the penalty of ₹ 13,23,794/- for the F.Y. 2012-13 and A.Y. 2013-14 when the appellant has deducted and deposited ₹ 5,86,720/- on 11.01.2013 and ₹ 7,73,075/- on 01.03.2013 totaling ₹ 13,23,794/- within the same financial year in view of sub-section (4) of Sectin 194 A of the Act; and (I) Whether survey having taken place under Section 133A of the Act on 10.01.2013 can be presumed it that TDS was deducted by the assessee on account of survey only ignoring that the TDS and deducted and deposited in the same financial year as such the penalty under Section 271C of the Act cannot be attracted and the penalty imposed was saved by the provision of section 273 B of the Act. We have heard Sri Suyash Agrawal, learned counsel for the assessee Bank and Sri Subham Agrawal, learned counsel appearing for the revenue ie. Additional Commissioner of Income Tax (TDS) Kanpur. Sri Suya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddressed the Court:- (i)Whether in view of deduction and deposit of tax by the assessee Bank on the interest income of FDRs by adjustment under Section 194 A (4) of the Act before the close of the financial year relevant for the concerned assessment year, penalty under Section 271C of the Act could have been imposed on the appellant assessee ; and (ii) Whether under the facts and circumstances of the case, as the Agra Development Authority for the earlier years had submitted certificates under Section 197 of the Act, there was a reasonable cause for the delay/failure to deduct tax at source on part of the assessee Bank so as to absolve it from penalty under Section 271 C of the Act in view of of Section 273 B of the Act? Section 194 A of the Act provides that any person who is responsible for paying to a resident any income by way of interest shall at the time of credit of such income to the account of the payee or at the time of payment thereof in cash/cheque or draft whichever is earlier deduct income tax thereon at the rates in force. The relevant part of Section 194 A (1) is reproduced herein below:- 194 A (1) Any person, not being any individual Hindu undivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The time for deduction of tax on interest income remains the same as contemplated under Section 194 (1) of the Act, ie, when the interest income is to be credited in the account of the payee or at the time of payment in cash/cheque or draft. Therefore, even if the assessee Bank makes any deduction in the financial year concerned by adjustment as provided under Sub-section (4) of Section 194 A (1) of the Act, it in no way legitimize the failure or shortage of not deducting the tax at source at the time it ought to have been deducted in accordance with Section 194 A (1) of the Act. Section 201 of the Act provides for payment of interest on the delayed period on account of failure to deduct tax at source on interest income or for delay in making such deduction, whereas Section 271 C of the Act provides for imposition of penalty for such default. In the instant case, we are not much concerned with the payment of interest on account of delay in deducting the tax at source on interest income but are only concerned with the imposition of penalty under Section 271 C of the Act due to non deduction of tax at source on interest income as contemplated by Section 194 A (1) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 197 of the Act was submitted by the Agra Development Authority and in that year necessary feeding was done in the computer system and the deduction of tax at source was made on the interest income. Thus, there was no occasion to commit the mistake of not deducting tax at source on interest income in time in the relevant years. It is pertinent to point out that due to certificates under Section 197 of the Act furnished by the Agra Development Authority no tax was deducted at source on the interest income in the Financial Year 2010-11 . The software was updated in the subsequent year with the result tax at source on interest income was deducted in the year 2011-12. Once the software was updated, there was no reason for any error in the subsequent year ie. 2012-13 and 2013-14. The finding of the tribunal on the above aspect is a finding of fact and when the cause shown has not been found to be reasonable by the tribunal, it does not inhers this Court to take a contrary view and to accord the benefit of Section 273 B of the Act. The various authorities cited by Shri Suyash Agrawal are not of any help in the facts and circumstances of the case and we do not consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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