The Income Tax Appellate Tribunal (ITAT), Jaipur Bench vehicle deleting the penalty held that the assessee, Bank of India was not guilty of non-deduction of Tax Deduction at Source (TDS).
The assessee bank has paid interest of Rs. 1,79,252 on fixed deposits placed with it by one of its customers, Jaipur School Samiti on which no TDS was deducted on account of submission of Form 15G by the said Samiti.
However, the Assessing Officer passed the order under section 201(1) read with 201(1A) holding the assessee bank to be in default for nondeduction of TDS on interest on FDR amounting to Rs. 1,79,252.
The assessee moved an appeal against the order before the CIT(A) who has since decided the matter in favor of the assessee and has allowed the appeal so filed by the assessee. It was accordingly submitted that where the order passed under 201(1) read with Section 201(1A) has been held null and void being barred by limitation by the(A), the consequent levy of penalty under Section 271C deserves to be set aside.
The two-member bench of Judicial Member Vijay Pal Rao and Accountant Member, Vikram Singh Yadav found that the order of the Assessing Officer u/s 201(1) read with 201(1A) holding the assessee to be in default for non-deduction of TDS has been held as null and void and has attained finality and thus, in effect, there is no order where the assessee has been held guilty of non-deduction of TDS.
The tribunal further noted that the assessee bank has relied on Form 15G filed by the Jaipur School Samiti and basis the same, has not deducted the TDS.
Therefore, the tribunal found that there was no reasonable cause for non-deduction of TDS and the levy of penalty under section 271C.
The Income Tax Appellate Tribunal (ITAT), Jaipur Bench vehicle deleting the penalty held that the assessee, Bank of India was not guilty of non-deduction of Tax Deduction at Source (TDS).
The assessee bank has paid interest of Rs. 1,79,252 on fixed deposits placed with it by one of its customers, Jaipur School Samiti on which no TDS was deducted on account of submission of Form 15G by the said Samiti.
However, the Assessing Officer passed the order under section 201(1) read with 201(1A) holding the assessee bank to be in default for nondeduction of TDS on interest on FDR amounting to Rs. 1,79,252.
The assessee moved an appeal against the order before the CIT(A) who has since decided the matter in favor of the assessee and has allowed the appeal so filed by the assessee. It was accordingly submitted that where the order passed under 201(1) read with Section 201(1A) has been held null and void being barred by limitation by the (A), the consequent levy of penalty under Section 271C deserves to be set aside.
The two-member bench of Judicial Member Vijay Pal Rao and Accountant Member, Vikram Singh Yadav found that the order of the Assessing Officer u/s 201(1) read with 201(1A) holding the assessee to be in default for non-deduction of TDS has been held as null and void and has attained finality and thus, in effect, there is no order where the assessee has been held guilty of non-deduction of TDS.
The tribunal further noted that the assessee bank has relied on Form 15G filed by the Jaipur School Samiti and basis the same, has not deducted the TDS.
Therefore, the tribunal found that there was no reasonable cause for non-deduction of TDS and the levy of penalty under section 271C.
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