Bank cannot be held as Assessee-in-default for Non-Filing of Form 15H/G in Time: ITAT Bengaluru [Read Order]

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In a Significant ruling, the Income Tax Appellate Tribunal (ITAT) Bengaluru held that the Bank cannot be treated as assessee-in-default for not filing Form 15H/G within the due date.

While allowing the assessee to file Form 15H/G before the assessing officer, the Tribunal ordered that no TDS liability can be attributed on the assessee if they are able to establish that it was only a notional provision which was reversed afterwards.

The assessee, State Bank of India was treated as assessee-in-default by the Assessing Officer on ground that they have short paid the TDS on Interest on Term Depositors.

On appeal, the assessee maintained that they are using CBS software, as per which, interest payable on time deposits is calculated generally on daily basis or monthly basis and is swept & parked accordingly in the provisioning account for the purpose of macro monitoring only but constructive credit is given to the depositors/payee’s account either at the end of the financial year or at periodic intervals as per practice of the bank or as per the depositor’s/payee’s requirement or on maturity or on encashment of time depositors whichever is earlier. They further claimed that adequate opportunity to produce Form 15H/G were not given to them.

Assessee-Bank further relied on the decision in State Bank of India, Hosepet City Branch, Hosepet Vs CIT(A) Gulburga, and contended that the Department should consider the delayed submission of Form 15H/G.

Based on the above decision, the bench allowed the appeal and remitted the mater back to the Assessing Officer with a direction that if the assessee is able to establish that it was only a notional provision which was reversed afterwards, then no TDS liability can be imposed on the assessee.

Read the full text of the Order below.

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