RBL Bank Ltd. v. Income-tax Officer (TDS), Ward-1, Belgaum

IT: Where recipient, to whom assessee-bank paid interest without deducting tax at source, had shown such interest income in its return of income but had not paid tax thereon claiming same to be exempt, assessee could not be treated as assessee-in-default
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[2016] 65 taxmann.com 219 (Panaji - Trib.)
IN THE ITAT PANAJI BENCH
RBL Bank Ltd.
v.
Income-tax Officer (TDS), Ward-1, Belgaum*
N.S. SAINI, ACCOUNTANT MEMBER
AND GEORGE MATHAN, JUDICIAL MEMBER
IT APPEAL NOS. 329 TO 331 (PNJ) OF 2015
[ASSESSMENT YEARS 2011-12 TO 2013-14]
NOVEMBER  24, 2015
Section 201, read with section 194A, of the Income-tax Act, 1961 - Deduction of tax at source - Consequence of failure to deduct or pay (Assessee-in-default) - Assessment years 2011-12 to 2013-14 - Assessee-bank paid interest to a university (recipient) without deducting TDS - Assessing Officer treated bank as assessee-in-default - Recipient of interest showed nil income treating all income as exempt and, thus, did not pay any tax - Whether where no tax was paid by recipient of income because as per recipient, its entire income was exempt or on which no tax was payable, then unless it was shown that due tax could not be recovered by department from recipient, assessee-payer could not be treated as 'assessee-in-default' - Held, yes [Para 13] [In favour of assessee/Matter remanded]