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TMI Blog2011 (4) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner of Income-tax (TDS), Patna (hereinafter referred to as "the Commissioner TDS") for the assessment year 2003-04. 3. The matter in dispute pertains to the amount of tax deducted by the petitioner-State Bank of India at source from the amount of interest paid to the depositors. The Income-tax Officer, TDS Ward -2(1), Patna, initiated proceedings against the bank for not deducting the appropriate amount of tax at source from the amount of interest payable to the depositors for the financial year 2003-04. Under order dated July 6, 2004, made by the Income-tax Officer, TDS Ward-2(1), Patna, under section 201 of the Act, the bank was held to be in default in deducting the tax at source from the amount of interest accrued to the depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d within six months of the receipt of the application as envisaged by sub-section (8) of section 154 of the Act, but that was not done. It is the claim of the bank that the bank did give repeated reminders to the Commissioner of Income-tax, Patna, for decision on the applications for rectification made under section 154 of the Act. 6. Both the abovereferred applications for rectification made under section 154 of the Act have been dismissed by the Commissioner TDS on August 25, 2010, as time barred. Therefore, the present petitions. 7. According to the bank, many of its depositors are the Government of Bihar and its departments. The interest paid to such depositors is exempt from taxation under article 289 of the Constitutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not defeat the applications made by the assessee. In support thereof, he has relied upon Circular No. 73, dated January 7, 1972, (see [1972] 84 ITR (St.) 4) issued by the Central Board of Direct Taxes. The said Circular states that the application under section 154(2) of the Act filed by an assessee within the statutory time limit, if "not disposed of by the authority concerned within the time specified under sub-section (7) of section 154, it may be disposed of by that authority even after the expiry of the statutory time limit, on the merits and in accordance with law." He has also relied upon the judgment of the Allahabad High Court in the matter of Vithaldas v. ITO [1969] 71 ITR 204 (All). 9. In the above matter, a similar issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the assessee on or after the 1st day of June, 2001, to an income-tax authority referred to in sub-section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it,- (a) making the amendment ; or (b) refusing to allow the claim." 13. The above sub-section imposes a duty upon the income-tax authority to make an order on an application for rectification within six months from the date of the receipt of the application. It thus enjoins a duty upon the income-tax authority ; at the same time it does not provide for consequences in case the income-tax authority fails to perform his duty as envisaged by the above sub-section (8). 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income-tax-1 fail in discharging his duty to decide the said applications within six months ; he did not care to transfer the papers to the Commissioner TDS on restructuring of the Department and transfer of jurisdiction to the Commissioner TDS ; compelling the writ petitioner to make applications on April 5, 2010. The Commissioner TDS has manifestly erred in treating the said applications as applications made afresh and in rejecting the same as time barred. In our opinion, the Commissioner TDS ought to have decided the said applications on the merits as the same were filed within the specified time. 17. In the above circumstances, the petitions are allowed. The impugned orders dated August 25, 2010 (annexure 7 to each pet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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