Bank branch TDS deposit and return filed by zonal office. AO treated branch as assessee in default. ITAT remanded matter to AO for verification
ABCAUS Case Law Citation:
ABCAUS 2544 (2018) 09 ITAT
The appellant assessee was a branch of a Nationalised Bank. The bank branch had deducted the tax at source (TDS) on various payments made by it and transferred the same to its zonal office for remittance of the same to the account of Central Government in accordance with the policy adopted by the Bank at macro level to deposit all TDS from their respective zonal offices.
Subsequently, the zonal office filed its quarterly returns including the payments and TDS details of the said branch. However the bank branch too inadvertently filed its quarterly TDS returns using its Tax Deduction Account Number (TAN).
Coming to know about this duplicity, the bank branch later cancelled / revised its TDS returns which were filed already.
However, with repect to the bank branch, the Assessing Officer (AO) found that there were certain short deduction of TDS and accordingly, he treated the branch as assessee in default for the said shortfall u/s 201(1) of the Act and also charged interest thereon u/s 201(1A) of the Act.
This action of the AO was upheld by the CIT(A).
Aggrieved, the bank branch approach the Tribunal challenging the order passed by the Commissioner of Income Tax (Appeals) for the fourth quarter of the relevant financial year.
The bank placed on record the latest statement of TDS downloaded from the TRACES wherein no demand was outstanding as on date for the relevant financial year.
The Tribunal opined that this aspect required factual verification and accordingly directed the AO to verify the fact as to whether the requisite TDS together with applicable interest, if any, had been duly remitted by the zonal office of the Bank including the transaction pertaining to the assessee branch herein.
The Tribunal clarified that if it is found to be correct, then the demand raised in the hands of the assessee should be cancelled.