TMI Blog2021 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... AT DELHI] after following the judgment of the Jurisdictional Allahabad High Court in the case of the assessee itself, has quashed the proceedings u/s 201 of the Act on the similar lines. Further, for Assessment Year 2014-15 and 2015-16 also the issue is identical and no distinguishing feature was pointed out by Ld. DR at the time of hearing. Since, both the assessment years i.e. A.Y. 2014-15 and 2015-16 are identical, therefore, we are allowing both the appeals. - I.T.A. No. 6095/DEL/2016 I.T.A. No. 6096/DEL/2016 - - - Dated:- 30-3-2021 - SHRI R. K. PANDA ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER Appellant by : Sh. M. P. Rastogi, Adv Respondent by : Sh. Ashok Gautam, Sr. DR ORDER PER SUCHITRA KAMBLE , JM These two appeals are filed by the assessee against order dated 20/09/2016 passed by CIT (A)-Ghaziabad for assessment years 2014-15 2015-16 respectively. 2. The grounds of appeal are as under:- I.T.A. No. 6095/DEL/2016 (A.Y 2014-15) 1. That in the absence of any income-tax demand outstanding against the payee or any action taken against the payee by the Department, the Assessing Officer has no valid jurisdiction u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural justice and bad in law. 3. That the authorities below ought not to have treated the assessee in default u/s 201 read with section 201(1A) of the Act in respect of such payees who had furnished Form No. 15G/15H of the Act and consequently the TDS demand u/s 201 and 201(1A) of the Act is arbitrary, unjust and bad in law. 4. That the Assessing Officer ought not to have included such items of interest on which TDS has been deducted and paid by the assessee and explained before the CIT (Appeals) and consequently the TDS demand, as created by the Assessing Officer, is arbitraiy, unjust and at any rate very excessive That the Assessing Officer and CIT (Appeals) both ought not to have created the TDS demand u/s 201 and 201(1A) of the Act against the assessee in respect of such items of interest, which have been included by the payees in their respective income-tax returns and have paid the income-tax thereon and accordingly the TDS demand as created by the Assessing Officer is arbitrary, unjust and at any rate very excessive. 5) The above grounds of appeal are independent and without prejudice to one another. 3. Both the appeals are identical, hence we are takin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained before the CIT (Appeals) that for the purpose of invoking the provision of Section 201 of the Act, as observed and explained by the Allahabad High Court, which is a Jurisdictional High Court, in 345 ITR 288 at pages 335 onwards, while dealing with the provision of Section 201 of the Act, held that as per the provisions of Section 191 of the Act read with its explanation, the prime responsibility is of the recipient assessee to pay the tax directly and unless and until the Department pointed out that any tax liability is pending before the recipient assessee, the provision of Section 201 of the Act cannot be invoked because the provision of Section 201 of the Act is a recovery provision. The Hon ble Allahabad High Court observed that provision of Section 191 of the Act read with its Explanation and the provision of Section 201 of the Act has to be construed harmoniously and the provision of Section 201 cannot be interpreted independently keeping in mind the purpose for which Section 201 has been enacted. So before invoking the provision of Section 201 of the Act, the AO has to bring on record that the tax demands against the recipient assessees are pending which has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to depend upon the declaration of the payee to deduct or not to deduct the tax. In such circumstances, keeping into consideration the totality of the fact as well as in the absence of jurisdictional fact, the assessee-bank cannot be treated in default as also held by the Coordinate Bench in earlier years in the case of the assessee-bank itself. Therefore, the order passed u/s 201 of the Act, which too invoked on account of non-issuance of any proper notice, deserves to be quashed. In the alternative, the demand raised by the AO on account of non-deduction of TDS from the interest paid to various persons in terms of Section 194A of the Act is very excessive because neither the AO nor the CIT (Appeals) has given the benefit of the interest paid to certain persons from whom either the TDS was deducted or the interest paid was less than the taxable limit, the details whereof have been given in the submissions filed by the assessee and which have been reproduced by the CIT (Appeals) in his order itself. As far as the interest charged u/s 201(1A) of the Act by the AO from the date of deductibility till the date of its order, it is submitted that the interest chargeable u/s 201(1A) is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o consider the judgment of the Hon ble Supreme Court in the case of CIT vs. Eli Lilly and Co. (India) Pvt. Ltd. and the judgment of Delhi High Court in the case of CIT vs. Majestic Hotel Ltd. in 155 Taxman 447. The Hon ble Supreme Court in the case of Eli Lilly (supra) held that the interest u/s 201(1A) is compensatory in nature and has to be charged from the date of deductibility till the date of actual payment and in the case of TDS, the date of actual payment is the date on which the tax has been paid by the payee directly. 8. We have heard both the parties and perused the material available on record. The assessee bank has not deducted TDS in respect of customers who have provided Form No. 15G and 15H of the Act under the statute as provided by the Income Tax Act. The customers who have provided Form No. 15G/15H has specifically requests through these forms that TDS should not be deducted on their FDs/respective withdrawals. The prime responsibility relating to TDS deduction u/s 201 is of the recipient assessee to pay the tax directly once they filed From No. 15G/15H and any tax liability will be held as pending in recipient assessee s cases and hence Section 201 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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