In a Partial Relief to Canara Bank, the Income Tax Appellate Tribunal (ITAT) directed the matter to AO to examine Form No 15G and 15H of depositors to whom interest is paid.
The Assessee, Canara Bank is a tax deductor, is a bank. A TDS inspection was conducted on 28.01.2014. During inspection statements of Chief Manager and Manager were recorded wherein, they have accepted that TDS on interest of term deposit is being made on annual basis and not on quarterly basis though such interest is being provided quarterly basis in the balance sheet. The AO after examination held that deductor is an “assessee in default’ u/s 201(1) for not making TDS on interest payment of Rs. 14,88,56,291/- and therefore, it was also liable to pay interest under section 201(1A). Such an order was passed on 24.03.2014. The total amount of tax demand was raised of Rs. 3,74,10,430/- . Against this Assessee preferred an appeal before the CIT(A).
The CIT(A) has categorically held that from the orders of the ld AO it is not discernable that how the tax demand of Rs. 3.74 crores was reduced to Rs. 21,28,983/-.
“The CIT(A) at the time of disposal of the appeal did not appreciate that the first proviso inserted w.e.f. 01.07.2012 u/s 201 (1) of the act is applicable in the case of the Assessee and if the Assessee satisfy certain conditions, then it should not held to be an ‘Assessee in default’,” the tribunal noted.
The two member bench of Judicial Member, Kul Bharat and Accountant Member Prashant Maharishi opined that approach of the CIT(A) is pedantic not correct because it will put additional burden on the Assessee to cross the threshold of the provision of section 154 of the Act of being ‘mistake apparent from the record’. By passing an order under section 154 of the act, in fact AO has made the task of CIT (A) much simpler. In fact, the mistake is committed by the AO who should have charged the right demand of tax from the Assessee. Therefore, it is a mistake of the AO for which the Assessee cannot be penalized.
The ITAT set aside the appeal to the file of the AO with a direction to examine the Form No. 15G and 15H of the depositor to whom interest is paid and after the requisite conditions are satisfied, to delete the demand accordingly.Subscribe Taxscan AdFree to view the Judgment