No fault of Assessee for Non-deduction of TDS once Certificate has been issued by Recipient: ITAT grants relief to State Bank of Patiala [Read Order]

In relief to State Bank of Patiala, the Amritsar Bench of Income Tax Appellate Tribunal (ITAT) held that there is no fault of assessee for non-deduction of TDS once certificate has been issued by the recipient.

The appellant, State Bank of Patiala has submitted that relying on the said certificate of Chartered Accountant supplied by the PTU, the Bank had not deducted the TDS on interest on FDs of the PTU. The deductee i.e. Punjab Technical University is an existing assessee and has duly filed its income tax returns. It duly proved that the interest to whom was paid was also an existing assessee. As such there was no default on the part of the appellant and as such the interest charged and TDS payable is not called for.

The coram of Accountant Member, M.L.Meena and Judicial Member Lalit Kumar held that the issue pertaining to exemption of I.K. Gujral Punjab Technical University Jalandhar, it is pending adjudication before the Hon’ble High Court of Punjab and Haryana. Nonetheless the certificate was issued by the chartered accountant of I.K. Gujral Punjab Technical University Jalandhar, certifying that the assessee is not required to deduct the TDS. In any case no fault can be attributed on the assessee, on account of non-deduction of TDS once the certificate was issued by the recipient.

“we deem it appropriate to remand back all the appeals to the file of the CIT(A), with the direction to await the outcome of the appeals of I.K. Gujral Punjab Technical University Jalandhar, for the assessment years under consideration. It is directed that if the High Court upholds the order of the Tribunal, rejecting the application for registration/exemption to the University, then the CIT shall decide the issue of assessee in default against the assessee after applying the decision of the Hon’ble High Court. The Ld. AR has no objection to apply the decision of the Hon’ble High Court in terms of the provisions of section 158A of the Income Tax Act,” the ITAT said.

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