Deductor could not be penalized for not deducting tax at source

IT: Where depositors had furnished declaration in prescribed manner requesting deductor not to deduct tax at source, deductor was under a statutory obligation not to deduct tax and in aforesaid circumstances, deductor could not be penalized for not deducting tax at source
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[2014] 48 taxmann.com 244 (Visakhapatnam - Trib.)
IN THE ITAT VISAKHAPATNAM BENCH
Deputy Commissioner of Income-tax, Circle -3(1) (TDS), Vijayawada
v.
Vijaya Bank*
J. SUDHAKAR REDDY, ACCOUNTANT MEMBER
AND SAKTIJIT DEY, JUDICIAL MEMBER
IT APPEAL NOS. 515 TO 517 (VIZAG.) OF 2013
CO NOS. 6 TO 8 (VIZAG.) OF 2014
[ASSESSMENT YEARS 2009-10 & 2010-11]
JULY  7, 2014
Section 201, read with section 271C, of the Income-tax Act, 1961 - Deduction of tax at source - Consequences of failure to deduct or pay (Penal interest) - Assessment year 2009-10 - Whether assessee bank could not be penalized or saddled with liability under section 201(1) or 201(1A) when depositors to whom interest had been paid/credited had furnished declarations in prescribed manner requesting not to deduct tax - Held, yes - Whether merely because there were some technical defects in declarations or they had been received after date of credit of interest to account of payee, they could not be rejected - Held, yes [Para 7] [In favour of assessee]