The Commissioner Of Income-Tax (Tds)-I, Chandigarh v. State Bank Of Patiala, Sco 3-A, Sector 7-C, Chandigarh

ITA No. 406 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 406 of 2015 Date of Decision: 8.2.2016 The Commissioner of Income-tax (TDS)-I, Chandigarh ....Appellant. Versus State Bank of Patiala, SCO 3-A, Sector 7-C, Chandigarh ...Respondent. 1.Whether the Reporters of the local papers may be allowed to see the judgment?the judgment? 2.To be referred to the Reporters or not? 3.Whether the judgment should be reported in the Digest? CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MRS. JUSTICE RAJ RAHUL GARG. PRESENT: Mr. Denesh Goyal, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 (in short “the Act”) against theorder dated 30.6.2015 (Annexure A-4) passed by the Income TaxAppellate Tribunal, Chandigarh Bench “A”, Chandigarh (hereinafterreferred to as “the Tribunal”) in ITA No. 79/CHD/2015, for theassessment year 2012-13, claiming the following substantial questionsof law:- (i)Whether the ITAT was right in law in deletingthe penalty imposed by the AO u/s 271C readwith Section 274 of the Income Tax Act for failure to deduct tax at source out of interestpaid/credited to four deductees as required u/s194A of the Income Tax Act, 1961? (ii)Whether on the facts and circumstances of thepresent case and in law, the Hon'ble ITAT isright in holding that the assessee was not liableto deduct tax at source, as required u/s 194A ofthe Income Tax Act, 1961? (iii)Whether in the facts and circumstances of thecase and in law the Hon'ble ITAT is right inholding that assessee has a genuine belief thatit was not required to deduct tax at source, asrequired u/s 194A of the Income Tax Act, 1961? 2.Briefly stated, the facts necessary for adjudication of theinstant appeal as narrated therein may be noticed. A TDS Inspection/Survey under Section 133A of the Act was carried out at the businesspremises of the assessee on 27.2.2013. During the course of saidsurvey, it was noticed that the assessee had not deducted tax on interestpaid to different parties who claimed to be exempt from the income taxunder Sections 12A and 10(23C) of the Act. The Person Responsible(PR) of the Bank admitted the default on his part and deposited the TaxDeducted at Source (TDS) along with interest on 1.3.2013. On askingto furnish the details and proof of deposit of TDS into Governmentaccount, the PR furnished the same vide letter dated 1.3.2013 and asper the details, the total TDS along with interest under Section 201(1A)of the Act amounting to ` 46,62,737/- was deposited. The assessee hadfiled its e-TDS statements late for the financial year 2012-13. The matter regarding initiation of penalty proceedings under Section 272A(2)(k) ofthe Act was referred to the Joint Commissioner of Income Tax (TDS),Range, Chandigarh and separately to initiate penalty proceedings underSection 271C of the Act. Since the PR had failed to deduct tax at sourceunder Section 194A of the Act @ 10% on the payments made onaccount of interest paid to different parties and deposit the same in theCentral Government account, the Deputy Commissioner of Income Tax(TDS), Chandigarh vide order dated 26.12.2013 (Annexure A-1) underSection 201(1)/201(1A) of the Act informed the office of JointCommissioner of Income Tax (TDS), Range, Chandigarh that thedeductor had not deducted the tax at source amounting to ` 42,90,960/-during the financial year 2012-13 and also failed to deposit the same inthe Central Government account as required under Chapter XVII-B ofthe Act. Accordingly, a notice dated 15.1.2014 was issued to the PR toshow cause as to why penalty under Section 271C read with Section274 of the Act be not levied for failing to pay the amount of TDS. TheJoint Commissioner of Income Tax (TDS), Range, Chandigarh vide orderdated 15.5.2014 (Annexure A-2) imposed a penalty of ` 42,90,960/-under Section 271C of the Act. Feeling aggrieved, the assessee filed anappeal before the Commissioner of Income Tax (Appeals) [for brevity“the CIT(A)”]. The CIT(A) vide order dated 27.11.2014 (Annexure A-3)allowed the appeal of the assessee and deleted the penalty. Against theorder, Annexure A-3, the revenue filed an appeal before the Tribunal whovide order dated 30.6.2015 (Annexure A-4) upheld the order of the CIT(A) and dismissed the appeal. Hence, the present appeal. 3.We have heard learned counsel for the revenue. 4.It is not disputed by the learned counsel for the revenue that ITA No. 406 of 2015 -4- the issue raised herein stands concluded by the decision of this Court inthe case of assessee in ITA No. 400 of 2015 (The Commissioner ofIncome-tax (TDS)-I, Chandigarh v. State Bank of Patiala, SCO 3-A,Sector 7-C, Chandigarh) decided on 4.2.2016 wherein the appeal filedby the revenue has been dismissed. 5.In view of the above, the instant appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE February 8, 2016 gbs (RAJ RAHUL GARG)JUDGE