2023 (11) TMI 84 - HC - Income Tax

Validity of Order passed u/s 201 - TDS liability on interest paid to the citizens who have given Form No.15G and 15H as required u/s 197A(1A) and 197A(1C) - Alternate remedy u/s 151 by way of an appeal before the Joint Commissioner - HELD THAT - The petitioner appears to have furnished few details prior to the issuance of the Show Cause Notices through e-mail. This has not been taken note of by the AO. At the same time, AO cannot be found fault as the petitioner has failed to respond to the Show Cause Notices issued under Section 201(1)/201(1A) of the IT Act. Petitioner was to not only respond but also appear for a personal hearing when the case was fixed for personal hearing on 24.11.2022 at about 11.29 a.m. A similar reply was sent on 05.09.2022 stating that the petitioner has been appointed as a nodal body to implement the Social Welfare Scheme of the State Government. A reading of the representations/replies indicates that the petitioner has not fully collated the information that was required to be furnished prior to the Show Cause Notices, although the petitioner has furnished few details earlier by e-mail dated 05.09.2022. This ought to have been examined by the respondent while passing the impugned Assessment Orders. Considering the above, no useful purpose will be served by directing the petitioner to file a statutory appeal under Section 251 of the IT Act before the Appellate Commissioner, although the Appellate Commissioner can call for a remand report. The impugned Assessment Orders are set aside and the cases are remitted back to the respondent to pass a fresh order on merits and in accordance with law preferably within a period of three months from the date of receipt of a copy of this order.

Summary

Issues Involved:
The judgment involves challenging Assessment Orders passed under Section 201 of the Income Tax Act, 1961, based on Show Cause Notices issued to the petitioner for multiple Assessment Years regarding deduction of tax at source for depositors who submitted Form No.15G and Form No.15GH.

Details of the Judgment:

Challenge to Assessment Orders:
The petitioner, a Cooperative Bank, contested the Assessment Orders, claiming that interest paid to depositors did not exceed specified amounts, hence no tax deduction was required for depositors who submitted Form No.15G and Form No.15GH.

Non-Cooperation Allegation:
The respondent argued that the petitioner failed to participate in the proceedings despite being called for hearings, leading to the passing of the Assessment Orders.

Legal Provisions and Declarations:
Sections 197A(1A), 197A(1B), and 197A(1C) of the IT Act were cited, emphasizing the conditions under which no tax deduction should be made for certain individuals based on declarations provided.

Assessment Order Set Aside:
The Court set aside the Assessment Orders, directing the respondent to pass a fresh order within three months, emphasizing the need for cooperation from the petitioner and timely responses to Show Cause Notices.

Remittance and Compliance:
The petitioner was instructed to cooperate with the respondent, file a reply to the Show Cause Notices within thirty days, and ensure no further adjournments during personal hearings.

Conclusion:
The judgment quashed the Assessment Orders, requiring a fresh decision in compliance with the law, emphasizing cooperation from the petitioner and adherence to timelines for responses and hearings.