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TMI Blog2017 (11) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... held to be an assessee in default u/s 201(1), the question of any liability for interest u/s 201(1A) simply does not arise. - Decided against revenue - ITA No. 4458/Del/2016 - - - Dated:- 10-11-2017 - Sh . N . K . Saini, AM And Sh . Joginder Singh, JM For The Assessee : Sh . Sanjiv Sapra, Adv . For The Revenue : Sh . S . S . Rana, CIT DR ORDER Per N . K . Saini, AM : This is an appeal by the department against the order dated 27.05.2016 by ld. CIT(A), Dehradun. 2. The only ground raised in this appeal reads as under: Ld . CIT ( A ) has erred in law and on facts in holding that provisions of section 194A of the IT Act, 1961 are not applicable on payment of interest In Site Restoration Fund Account ignoring the fact that deposits in Site Restoration Fund Account are made for a fixed period and which carry interest as applicable to time deposit . 3. During the course of hearing, the ld. Counsel for the assessee at the very outset stated that this issue is squarely covered in favour of the assessee vide order dated 18.07.2014 in ITA Nos. 3936 to 3938/Del/2013 for the assessment years 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vii ) in the case of interest credited or paid in respect of deposits ( other than time deposits made on or before 1st day of July 1995 ). Therefore, if a deposit is not in the nature of time deposit, then it is not amenable to the provisions of section 194A . 17 . 3 In the present case interest has been credited by SB / on SRF a / c which has been opened by ONGC with it as per the provisions of section 33ABA . Therefore, it is necessary to first examine the relevant provisions in this regard to find out whether SRF a / c is time deposit or not . 17 . 4 Section 33ABA deals with Site Restoration Fund in respect of those assessees, who are carrying on business of prospecting for, or extraction or production of petroleum or natural gas or both in India . Relevant portion reads as under : [ Site Restoration Fund 33ABA . ( 1 ) Where an assessee is carrying on business consisting of the prospecting for, or extraction or production of, petroleum or natural gas or both in India and in relation to which the Central Government has entered into an agreement with such assessee for such business, has before the end of the previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided in the agreement referred to in section 42, shall be deemed to be the profits and gains of business or profession of that previous year and shall accordingly be chargeable to income - tax as the income of that 'previous year . Explanation - Where any amount is withdrawn on closure of the account in a previous year in which the business carried on by the assessee in no longer in existence, the provisions of this section shall apply as if the business is in existence in that previous year . 17 . 5 Explanation 1 to clause ( vii ) of sub - section ( 3 ) to section 194A clearly contemplates time deposit to mean deposits which are repayable on the expiry of fixed periods . 17 . 6 Ld . Sr . counsel has referred to the various forms, forming part of the Schemes, which have been noted in his argument from which it is evident that there is no fixed period prescribed in regard to these deposits and assessee has to give notice to the bank for making withdrawal from this deposit account The withdrawal is to be made as per requirement of sub - section ( 3 ) to section 33ABA . Therefore, it cannot be said to be for a fixed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to the credit of the account by making an application in Form E, duly authorized by the Ministry of Petroleum Natural Gas or any agency authorized by the Ministry of Petroleum Natural Gas in this behalf . ( 2 ) On receipt of the request for withdrawal, the deposit office shall, a soon as may be, pay the amount to the depositor through a credit o the designated account . 17 . 9 SRF deposit continues to run as long as the agreement of ONGC with the Government runs and withdrawals can be made depending upon requirements . Clause 3 of the SRF Schemes read as under : 3 . Deposit : how to be made - ( 1 ) A deposit in terms of Section 33BA of the Income - tax Act, 1961 may be made by any depositor in accordance with the provisions of this Scheme . ( 2 ) The deposit may be made in one lump sum or In installments ( not exceeding four installments in each financial year ). ( 3 ) Such deposit ahs to be made in India Rupee, and out of profits derived from the business referred in sub paragraph ( 3 ) of paragraph 1 above . ( 4 ) Shall account shall be maintained in Indian Rupees . 17 . 10 . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not . Therefore, in view of the provisions of section 194A ( 3 )( vii ) it has held that the provisions of section 194A ( 1 ) have no application to the assessee's case . Thus, once the ITAT has given a finding of fact that the SRF a / c is not a time deposit, the AO's action in revisiting the issue on the basis of earlier submission made by the assessee in a verification relating to a previous assessment year ( and subsequently retracted ) cannot be upheld, in view of the fact that the Hon'ble IT AT has found that the assessee's case does not fall u / s 194A ( 1 ) and that there was no liability or the part of the assessee to deduct any tax on site restoration fund of ONGC or on interest paid on site restoration deposit of ONGC, the assessee cannot be said to be an assessee in default within the meaning of section 201 ( 1 ). In view of the fact it cannot be held to be an assessee in default u / s 201 ( 1 ) , the question of any liability for interest u / s 201 ( 1A ) simply does not arise . Therefore, following the orders of the Hon'ble IT AT for the assessment year 2010 - 11, 2011 - 12 2012 - 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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