The ACIT, (TDS), Bhopal v. The Bank of India, Bhopal

ITA 468/IND/2009 | misc
Pronouncement Date: 25-05-2010 | Result: Dismissed

Appeal Details

RSA Number 46822714 RSA 2009
Bench Indore
Appeal Number ITA 468/IND/2009
Duration Of Justice 7 month(s) 24 day(s)
Appellant The ACIT, (TDS), Bhopal
Respondent The Bank of India, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 25-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-05-2010
Assessment Year misc
Appeal Filed On 01-10-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO.468/IND/09 F.YS. 2002-03 TO 2005-06 ASSTT. COMMISSIONER OF INCOME TAX(TDS) BHOPAL . APPELLANT VS BANK OF INDIA BHOPAL PAN - AAACB-0472C . RESPONDENT APPELLANT BY : SMT. APARNA KARAN SR. DR RESPONDENT BY : SHRI MANOJ MUNSHI ADVOCATE O R D E R PER JOGINDER SINGH JM THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 15 TH JULY 2009 ON THE GROUND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ANCELLING THE ORDER U/S 201(1) WHICH WAS RIGHTLY PASSED BY THE ASSESSIN G OFFICER FOR FAILURE TO DEDUCT TDS ON THE INTEREST ACCRUED ON FIXED DEPO SIT WHICH WAS MANDATORY FOR THE MANAGER UNDER THE PROVISIONS OF S ECTION 194A IN ABSENCE OF A NON-DEDUCTION CERTIFICATE U/S 197 FROM THE I.T. DEPTT. 2 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD SMT. APARNA KARAN SR. DR WHO HAS STRONGLY DEFENDED THE ASSESSMENT ORD ER BY CONTENDING THAT SINCE THE INTEREST HAS ACCRUED ON FIXED DEPOSI T THEREFORE IT WAS MANDATORY FOR THE MANAGER TO DEDUCT TAX UNDER THE P ROVISIONS OF SECTION 194A OF THE ACT. ON THE OTHER HAND SHRI MANOJ MUNS HI LD. COUNSEL FOR THE ASSESSEE STRONGLY DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT THE ASSESSEE IS FULLY COVERED BY NOTIFICATION NO. S O3489 DATED 22.10.1970 ISSUED BY THE CENTRAL GOVERNMENT U/S 194 A(3)(III)(F) OF THE ACT THEREFORE THERE IS NO QUESTION OF THE BANK DE DUCTING THE TAX AT SOURCE FROM THE INTEREST PAID TO IT. IT WAS ALSO PO INTED OUT THAT PROCEEDINGS INITIATED U/S 148 IN THE CASE OF M.P. B HOJ (OPEN) UNIVERSITY BHOPAL WERE DROPPED ON THE GROUND THAT THEY ARE EX EMPT FROM TAX U/S 10(23C)(IIIAB) OF THE ACT 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE LEARNED ASSESSING OFFICER RAISED A DEMAND OF RS.14 28 530/- FOR THE FINANCIAL YEARS 2002-03 TO 2005-06 BY PASSING A N ORDER U/S 201(1) OF THE ACT ON THE PLEA THAT THE ASSESSEE FAILED TO DED UCT TAX ON THE FDRS MADE BY M.P. BHOJ (OPEN) UNIVERSITY BHOPAL. THE ST AND OF THE ASSESSEE IS THAT THE ASSESSEE CANNOT BE TREATED AS ASSESSEE IN DEFAULT FOR NOT DEDUCTING THE TAX AT SOURCE ON THE INTEREST PAID/CREDITED FOR THE RELEVANT PERIOD. IT WAS ALSO CLAIMED THAT THE INCOM E OF THE UNIVERSITY IS 3 EXEMPT UNDER SECTION 10(23C)(IIIAB) OF THE ACT. BE FORE COMING TO ANY CONCLUSION WE ARE REPRODUCING HEREUNDER THE AFORES AID SECTION :- 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON ANY INCOME FALLING WITHIN ANY O F THE FOLLOWING CLAUSES SHALL NOT BE INCLUDED XX XX XX 23C ) ANY INCOME RECEIVED BY ANY PERSON ON BEHALF OF XX XX XX ( IIIAB ) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUTION 35 EXISTING 35 SOLELY 35 FOR EDUCATIONAL PURPOSES AND NOT FOR PURPOSES OF PROFIT AND WHICH IS WHOLLY OR SUBSTANTIALLY FINANCED BY THE GOVERNMENT ADMITTEDLY M.P. BHOJ (OPEN) UNIVERSITY BHOPAL IS A UNIVERSITY AND THE PROCEEDINGS INITIATED U/S 148 WERE ALSO DROPPED BY THE DEPARTMENT AS THE INCOME OF THE UNIVERSITY BEING EXEMPT WAS FOU ND NOT TAXABLE AS THE UNIVERSITY WAS EXISTING SOLELY FOR THE PURPOSE OF EDUCATION AND NOT FOR PROFIT. THE UNIVERSITY IS ALSO SUBSTANTIALLY FI NANCED BY THE GOVERNMENT THROUGH BUDGETARY HEAD THEREFORE THE A PPLICABILITY OF TDS DOES NOT ARISE CONSEQUENTLY NO DEFAULT WAS COMMIT TED BY THE CONCERNED MANAGER/ASSESSEE U/S 201(1) OF THE ACT. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALREADY CO NSIDERED THE NOTIFICATION NO. SO3489 DATED 22.10.1970 ISSUED BY THE GOVERNMENT U/S 194A(3)(III)(F) OF THE ACT AND CIRCULAR NO. 4 OF 20 02 FOR THE ENTITIES WHOSE INCOME IS EXEMPT U/S. 10. SECTION 194A SPEAKS ABOUT DEDUCTION OF TAX WHEREAS SECTION 197A(1B) OF THE ACT SPEAKS ABOUT NO N-APPLICATION OF 4 THE SECTION WHERE THE AMOUNT OF ANY INCOME IS OF TH E NATURE REFERRED TO IN SUB-SECTION (1) OR SUB-SECTION (1A) OR THE AGGRE GATE OF THE AMOUNTS OF SUCH INCOME CREDITED OR PAID OR LIKELY TO BE CREDIT ED OR PAID DURING THE PREVIOUS YEAR WHERE SUCH INCOME EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX. IN THE PRESENT APP EAL SINCE THE INCOME OF THE UNIVERSITY IS EXEMPT THEREFORE THERE IS NO QUESTION OF DEDUCTION OF TAX AT SOURCE AND ALSO WHEN PROCEEDINGS INITIATE D U/S 148 WERE DROPPED WE FIND NO INFIRMITY IN THE STAND OF THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS). IT IS UPHELD. FINALLY THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSI ON OF HEARING ON 25 TH MAY 2010. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 25 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/