While dismissing a departmental appeal, the Income Tax Appellate Tribunal, G bench held that the State Bank of India (SBI) s not bound to deduct tax at source on site restoration fund of ONGC and the interest paid on such fund.
In instant case interest has been credited by SB/ on SRF a/c which has been opened by ONGC with it as per the provisions of section 33ABA of the Income Tax Act.
During the course of hearing, the ld. Counsel for the assessee at the very outset stated that this issue is squarely covered in favour of the assessee vide order dated 18.07.2014 in ITA Nos. 3936 to 3938/Del/2013 for the assessment years 2010-11 to 2012-13 respectively, in assessee’s own case wherein the Tribunal directed the SBI not to deduct TDS from on Site Restoration Fund of ONGC & Interest paid on it.
The CIT, although supported the AO but couldn’t deny the arguments made by the counsel of assessee and also observed that the assessee did not deduct the tax on the interest accrued on the corpus of SRF fund of ONGC and that triggered the controversy of non-deduction of tax at source.
A division bench comprising of Judicial Member Shri. Joginder Singh and Accountant Member Shri. N. K. Saini, upheld the decision of CIT (A) wherein the plea of the Bank was allowed.
The ITAT had examined whether the SRF account is a time deposit and held it was not a time deposit. Therefore the tribunal declared that the AO’s action in revisiting the issue on the basis of earlier submission made by the assessee in a verification relating to a previous assessment year (and subsequently retracted) cannot be upheld, in view of the fact that the Hon’ble ITAT has found that the assessee’s case does not fall u/s 194A(1) and that there was no liability or the part of the assessee to deduct any tax on site restoration fund of ONGC or on interest paid on site restoration deposit of ONGC, the assessee cannot be said to be an assessee in default within the meaning of section 201(1).
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