State Bank of Patiala Vs ITO (ITAT Amritsar)
Admittedly 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 as income of the University is exempt u/s. 10(23C)(iiiab) of the IT Act, 1961 and accordingly no tax was deducted at source on account of interest paid of FDRs of PTU. 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.
FULL TEXT OF THE ITAT JUDGMENT
1. All these four appeals arise out of the order of Ld CIT(A) wherein CIT(A) has confirmed the order of ITO(TDS) Jalandhar without applying his mind and without appreciating the facts of the case.
2. The assessee has raised the following grounds of appeal in ITA Nos. 450 to 453/Asr/2018
“1. That the order of the ITO (TDS) as well as the order of Learned CIT(A) are both against the facts of the case and are untenable in law.
2. That the worthly CIT(A) has not appreciated the facts of the case and merely relied on order of the ITO (TDS) and without any rhyme & reason, the Ld. CIT(A) has confirmed the order of the ITO (TDS). As such the order of the CIT (A) is bad in the eyes of law and is liable to be cancelled.
3. That the Ld. CIT(A) did not appreciate that there was no liability on account of demand created at Rs. 63,54,374/- on account of TDS and Interest (Rs. 4021756 TDS+ Rs. 2332618/- Interest).
4. That the authorities below did not appreciate that interest was paid on FDRs to I.K.G. Punjab Technical University, Kapurthala. The bank has given interest on the said fixed deposits to the PTU. The bank had not deducted the tax on interest on fixed deposits of the PTU as there was no liability to deduct the same.
5. Tat the Ld. CIT(A) did not appreciate that I.K.G. Punjab T Gechnical University is State Government owned university established by the Govt. of Punjab Technical University Act, 1996 (Act I of 1997) vide Notification dated 16.01.1997 by the department of Legal and Legislative Affairs, Punjab, solely for the educational purpose and not for purpose of profit.
6. That we were informed by PTU vide Letter No. PTU/ACTT/DF/759 dated 25.03.2013 along with certificate from Charered Accountant that the income f the University is exempt u/s. 10(23C)(iiiab) of the IT Act, 1961 and accordingly no tax was deducted at source on account of interest paid of FDRs of PTU. Thus there was reasonable and sufficient cause for not deducting the tax at source and the provision of section 201(1)/201(1A) is not at all applicable and the order of the Ld. CIT(A) thereby confirming the order of the ITO (TDS) is bad in the eyes of law and the same may be cancelled.
7. That even otherwise there was reasonablecause for not deducting the tax at source and as such this case does not fallwithin the mischief of section 201(1)/201(1A) of IT Act, 1961.
8. That the authorities below did not not appreciate that the provisions of section 201(1)/201(1A) were not applicable to the present facts and circumstances of the case and the assessee cannot be treated as the assessee in default u/s. 201(1)/201(1A) because the interest paid to I.K.G. Punjab Technical University has duly been shown by them as income in their return filed by the University and there was not loos to the REcvenue even otherwise.
9. That the authorities below did not appreciate that the provisions of section 197 are not at all applicable to the present facts and circumstances of this case in view of Board’s Circular No. 4/2002 dated 16/07/2002 as the income of the University is exempt u/s. 10. As such there was no liability u/s. 201(1)/201(1A).
10. That any other ground of appeal which may be urged at the time of hearing of the appeal.”
3. In this connection, it is relevant to point out that the point involved in all the four appeals is common.
4. In this case, the ITO (TDS) has created the following demands as per details herebelow:-
