9911796707
TMI Blog2016 (5) TMI 1566X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 426 - ITAT HYDERABAD] and CIT Vs. Valibhai Khanbhai Mankad [ 2012 (12) TMI 413 - GUJARAT HIGH COURT] that once the assessee obtained Form 15I from the sub-contractors whose contents are not disputed or whose genuineness is not doubted, then, the assessee is not liable to deduct tax from the payment made to sub-contractor. Once, assessee is not liable to deduct tax disallowance u/s 40(a)(ia) cannot be made. The assessee s breach of the requirement to furnish details to the income tax authority in the prescribed form within the prescribed time may attract other consequences but cannot result in a section 40(a)(ia) disallowances. Hence, addition made on this count is deleted. - Decided in favour of assessee. - ITA No. 815 & 1233/Hyd/2015 - - - Dated:- 6-5-2016 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Assessee by: Shri S. Swaminathan. For the Revenue by: Smt. G.V. Hemalatha Devi. ORDER PER S. RIFAUR RAHMAN, AM: Both these appeals are preferred by assessee against the orders of CIT(A), Tirupathi for AYs 2010-11 and 2011-12. Since identical issue is involved in both these appeals, they were clubbed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, held that as the TDS was not deducted for an amount of ₹ 6,73,55,000/- where the interest exceeds ₹ 10,000/- attracts provisions of Sec.40(a)(ia) of the IT Act and when this is put to the assessee's AR, he could not offer any satisfactory explanation. Therefore, the Assessing Officer disallowed the amount of ₹ 6,73,55,000/- and added back to the income returned. 5. Aggrieved by the order of the Assessing Officer, the assessee went in appeal before the CIT(A). 6. After considering the submissions of the assessee, the CIT(A) discussed and examined the issue elaborately with case laws and allowed the appeal partly by observing as under: 5.7 On going through the judicial decisions relied upon by the appellant, it indicates that the provisions of Section 40(a)(ia) are not applicable to the facts of the case where the assessee shown to have obtained forms 15G/15H, but only failed to furnish the same before the Authority concerned i.e. jurisdictional CIT. The decisions referred also support an argument that the Forms furnished in incomplete format, also do not attract the disallowance u/s 40(a)(ia). The underlying concept on this issue was that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the fact that Form 150/15H declarations need not be obtained for the Interest paid of Rs. l,17,27,905/- as these represented interest paid to various govt departments etc which are outside the purview of TDS. 4) Appellants had obtained the Form 15G/15H declarations for the balance amount of ₹ 49,39,697/- by its various branches but the same could not be furnished before the assessing officer due to affix of time. 5) Appellants pray that this honorable tribunal take note of the fact that the balance interest of ₹ 1,66,67,602/- represents both the interest paid to various government and Institutional Depositors on which tax need not be deducted at source under the provisions of the section 194A and also on which the appellant bank had obtained the declaration forms from the depositors. It is further prayed that this honorable tribunal be pleased to consider and grant necessary relief as it may deem fit. 8. Before us, the ld. AR submitted that the assessee bank has more than 100 branches in the districts of Chittoor and Krishna and substantially, all the branches are in rural areas including small villages, Panchayats etc. He submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28,52,120 23 Above ₹ 50,000/- up to ₹ 1.00 lakh 55,62,007 83 Above ₹ 20,000 up to ₹ 50,000/- 1,99,38,285 702 Above ₹ 10,000/- up to ₹ 20,000/- 2,95,19,496 2078 6,73,54,890 2899 8.2 From the above, it could be seen that out of the total number of 2899 accounts, 2078 accounts are the accounts for which the interest paid is more than ₹ 10,000/- but less than ₹ 20,000/- and in respect of 702 accounts, the interest paid is more than ₹ 20,000/- but less than ₹ 50,000/-. From this, it could be seen that a substantial portion of the parties to whom interest has been paid are parties receiving interest which is less than ₹ 50,000/- and parties residing in villages and Panchayats. Assessee is a sponsored bank of Indian Bank and is using the software for compliance with tax deduction requirements. As per the software system, the branch managers are required to update th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in ITA No.1750/Hyd/2013 following the decision of the Hon'ble High Court of Gujarat in the case of Commissioner of Income Tax vs. Valibhai Khanbhai Mankad. 9. The Learned Departmental Representative, on the other hand, relied on the order of CIT(A). 10. We have considered the rival submissions and perused the material facts on record. Assessee is in a banking business operates as Regional Rural Bank (RRB). Mainly operates in rural areas and its main customers are the agriculturists and small farmers. The assessee had submitted a statement with the breakup of interest on loans payment with account holders. The majority of interest payments were made to in the range of ₹ 20,000 50,000 702 accounts and between ₹ 10,000 20,000 are 2078 accounts. It comprises of 96% of the total payment of interest. As the whole payment of interest was disallowed by the Assessing Officer, the assessee has taken efforts to submit the Form 15G/H with CIT(A), which was confirmed by the Assessing Officer in the remand report. The remaining of ₹ 1.66 crores, which was disallowed to the extent Form 15G/15H were not submitted. Assessee had submitted that it has full proof s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
