Ita/51/2012 Of The Kerala State Financial Enterprise Limited v. The Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON WEDNESDAY,THE 21ST DAY OF NOVEMBER 2018 / 30TH KARTHIKA, 1940 ITA.No. 51 of 2012 AGAINST THE ORDER/JUDGMENT IN ITA 265/2006 of I.T.A.TRIBUNAL,COCHINBENCH DATED 21-10-2011 APPELLANT/S: THE KERALA STATE FINANCIAL ENTERPRISES LIMITED"BHADRATHA", MUSEUM ROAD, CHEMBUKAVU, THRISSUR-680020. BY ADVS.SMT.A.PARVATHI MENONSRI.K.JOHN MATHAISRI.M.GOPIKRISHNAN NAMBIARSRI.P.BENNY THOMASSRI.P.GOPINATH RESPONDENT/S: THE COMMISSIONER OF INCOME TAXI S PRESS ROAD, ERNAKULAM, KOCHI-682018. BY ADVS.SRI.P.K.R.MENON, SR.COUNSEL GOI (TAXES)SRI.JOSE JOSEPH, SC FOR INCOME TAX OTHER PRESENT: THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 21.11.2018, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Vinod Chandran, J. The appellant is a fully owned Government Companycarrying on, inter alia, chitty business. The only issuethat arise from the order of the Tribunal is as to whetherthe Appellate Tribunal was justified in confirming the order of the First Appellate Authority, affirming that ofthe Assessing Officer, with respect to the defective 15H Forms and treating the assessee to be in default underSection 201 of the Income Tax Act, 1961 (for short “the Act”). The appellant also has framed a question as towhether the Tribunal ought to have given further time tocure the defects in the various Form 15H produced. 2.On facts suffice it to notice that the appellant while carrying on chitty business accepts fixed deposits ofthe price amounts in lieu of other security. On depositbeing made, interest accrues on such deposits, which isadjusted towards the instalments of the chitty of the respective subscribers. Whether the tax deduction at source have to be carried out from the interest accrued is theessential question on which the dispute arose. There isabsolutely no doubt that tax deduction at source has to bemade except in cases where the subscribers, who are thedepositors and who earn the interest income, submits Form15G or Form 15H, as applicable. Admittedly, the assesseedid not produce such documents executed by the depositorsand when produced, they were defective. 3.The Assessing Officer treated the assessee to bein default and made a demand of Rs.7,64,60,118/-. Theassessee was in appeal before the First AppellateAuthority. The issue is dealt with in para 9 of Annexure Border by the First Appellate Authority. In 127 cases, itwas found by the First Appellate Authority that theinterest payment exceeded the minimum taxable limit.Hence, there could not have been any 15G or 15H Forms withrespect to that. The second category of cases numbering176, where cases in which there was no signatures availablein Form 15H. Then, there are 517 number of 15H Forms wherethe declaration was not filled up and no signature of the depositor. Again, there were 52 cases where verificationhas not been signed and filled by the declarants. Therecannot be any interference caused on these aspects.4.With respect to 1768 cases, declarations were madein Forms 15H and 15G introduced with effect from 01.08.2003only. The subject assessment year was 2003-04 and therewas no question of the new Forms being in vogue in theprevious year to the assessment year. With respect to thesaid 1768 cases, the First Appellate Authority rejected thesame on the contention that there was no explanation as tohow these Forms introduced with effect from 01.08.2003,were submitted in the previous assessment year. We findthe said rejection to be proper, since on monthly orquarterly payment of interest, tax deduction at source hasto be made and to have the relief under Section 197A of theAct, there should be 15G and 15H Forms filed at thecommencement of the previous year to the assessment yearand only then the payer would be absolved from theliability to deduct such tax. 5.Then, there were 156 cases, where the declarationwas not filed before the end of the previous year and theverification made in 1999 or 2000. These were also foundto be defective and not enabling the assessee from beingabsolved from making deductions by virtue of Section 194A. 6.On the findings as rendered by the First AppellateAuthority on facts, which has been affirmed by theTribunal, we do not see any question of law arising. Theassessee, as has been noticed at the first instance, hadalso raised a question as to whether a further opportunityhad to be then granted. We do not see any subsequentopportunity absolving the assessee from deducting tax atsource in the financial year 2002-03, which is the previousyear relevant to the subject assessment year. We hencereject the appeal of the assessee. No order as to costs. Sd/-K.VINOD CHANDRANJUDGE dkr Sd/-ASHOK MENONJUDGE APPELLANT'S/S ANNEXURES: APPENDIX