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TMI Blog2014 (11) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... ing sufficient opportunity to the assessee and further the Assessing Officer has reduced the demand considering even the late remittance." 3. Briefly the facts are, the assessee is a Public Sector Bank. A survey u/s 133A of the Act was conducted in case of the assessee on 9.2.2010 to verify its TDS compliance. As a consequence of the survey operation, proceeding was initiated by the assessing officer u/s 201 of the Act. In course of the proceeding, he called for the details of interest payment/credits during the financial year 2008-09. After noticing the profit & loss account for financial year 2008-09, the assessing officer found that interest payments/credits to the extent of Rs. 8,69,11,898/- was made during the year. On verifying partywise details of interest payment furnished by the bank, the assessing officer noticed that in the financial year 2008-09, the bank has paid interest exceeding Rs. 10,000/- in 131 cases but no tax was deducted at source as the payees furnished declarations in form 15G. However, during the survey proceeding, the Branch Manager could furnish 15G forms in 40 cases. He further noticed that the statement recorded during survey, the Branch Manager had s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,30,436/- and Rs. 27,177/- respectively. Thus, the total demand raised by the assessing officer for the impugned assessment year u/s 201(1) and 201(1A) of the Act is Rs. 4,72,009/-. 4. Being aggrieved of the order u/s 201(1) and 201(1A) of the Act, the assessee preferred appeal before the CIT(A). The CIT(A) deleted the addition by holding as under: "I have seen the submissions made by the appellant, gone through the order under section 201(1)/201(1A) besides perusing all other material available on record including the case laws relied upon. The issue is default in TDS on payment of interest amounts. It may be noted here that there was a survey under section 133A, in course of which Form No.15G/15H were thoroughly verified. After survey operations, as certain discrepancies were noticed show-cause notices were issued calling for explanation. Discrepancies found were of 3 types, viz., interest paid without making TDS without obtaining FORMS No.15G/15H; subsequently and Forms No.15G/15H were not there at the time of survey, but produced in response to Show-cause notices. For such alleged defaults demand under section 201(1)/201(1A) amounting to Rs. 4,72,009/- was raised. In as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contesting the observation made by the Ld. CIT(A) submitted that at the time of survey, only 40 nos. of declaration in form 15G could be submitted by the Branch Manager. Hence, the balance declaration submitted were not obtained prior to the payment/credit of interest, hence, cannot be taken cognizance of. So far as defective declarations are concerned, the Ld. D.R. submitted that they cannot be treated as valid declarations. He further contended that even assuming that the declarations were obtained by the bank from the depositors to whom interest have been paid but as the assessee has not submitted statement before the CIT in respect of the declarations obtained, there is violation of the statutory provision. Hence, the assessee cannot get benefit of the declarations obtained on 15G/15H. He therefore, submitted that the CIT(A) having not considered these facts in proper perspective, the order passed needs to be set aside. 6. The Ld. A.R. on the other hand strongly supporting the order of the CIT(A) submitted that the assessee has filed declaration in the prescribed manner before the assessing officer during the proceeding u/s 201 of the Act. Therefore, by pointing out some techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances, we agree with the conclusion of the Ld. CIT that merely because there are some technical defects in the declaration or they have been received after the date of credit of interest to the account of the payee they cannot be rejected. It is also a fact that the view taken by the Ld. CIT(A) is in consonance with the decision of ITAT Jodhpur Bench in the case of ITO v. Pearl Organic Coating [2004] 84 TTJ 802 and that of the Hon'ble Madras High Court in case of Vijay Hemanth Finance and Estate Ltd. v. ITO and another, reported in (1999) 238 ITR 282 (Mad). The Ld. D.R. has not brought to our notice any contrary decision. In aforesaid view of the matter, we do not find any infirmity in the order of the Ld. CIT(A) in deleting the demand raised by the assessing officer. Accordingly, we uphold the order of the CIT(A) by dismissing the grounds raised. 8. In the result, appeal of the department is dismissed. CO No.6/Vizag/2014: 9. The CO is merely supporting the order of the CIT(A). Since we have uphold the order of the CIT(A) while disposing the department's appeal in ITA No.515/Vizag/2013, the CO has become infructuous. 10. In the result, both the appeal of the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced the same in response to show-cause notice issued, which the AO has refused to consider. In fact, if a Form was not produced during the time of survey, the AO is duty bound to give an opportunity to the appellant to produce the same. In this regard, it may be noted here that the Hon'ble Madras High Court in the case of Vijay Hemanth Finance and Estate Limited v. ITO and another, reported in [1999] 238 ITR 282 (Mad) held that an opportunity should be given to the deductor to get the deficiencies in form 15G/H rectified before any action u/s 201 and u/s 201(1A) is contemplated against the deductor. Here, the AO without giving opportunity to produce the relevant forms was not justified in making order under section 201(1)/201(1A). Thus, for the reasons stated above penalty under section 271C is not attracted. " 14. We have considered the submissions of the parties and perused the materials on record. Undisputedly in course of proceeding before the assessing officer u/s 201(1) & 201(1A) of the Act, the assessee had produced declaration in form 15G in respect of the payments/credits where tax has not been deducted at source. However, the assessing officer has not accepted the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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