The appellant was justified in not deducting TDS based on valid declarations from senior citizens under the Income Tax Act provisions.

JUDGMENT :

Harisankar V. Menon, J.

These appeals are at the instance of the assessee, seeking to challenge the common order dated 22.05.2024 in I.T.A. Nos.459 to 464/COCH/2023 of the Income Tax Appellate Tribunal, Cochin Bench, with respect to the assessment years 2017-18 to 2022-23.

2. The appellant-assessee had a statutory duty to deduct tax at source as against the interest paid by it on fixed deposits with reference to the provisions of Section 194A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). At the same time, a separate treatment was provided for interest being paid on deposits made by persons above the age of 60 years under the provisions of Section 197A (1C) of the Act. The afore provision provided that if the person who is making the deposit and is receiving the interest furnishes a declaration in writing in duplicate “in the prescribed form and verified in the prescribed manner”, to the effect that the tax on his estimated total income of the previous year concerned would be NIL, the person responsible for making the TDS need not effect the same. The Form prescribed as above was the one under Form 15H framed under the provisions of Rule 29C of the Income Tax Rules, 1962 (hereinafter referred to as ‘Rules’). On the basis of Form 15H declarations furnished by the depositors, the appellant has not deducted tax at source during the relevant years. The declarations furnished as above by the depositors were also produced along with the TDS returns filed by the appellant. However, proceedings were later initiated proposing to treat the appellant as an “assessee in default” for the failure to deduct TDS on the interest income paid as above. Such proceedings were taken essentially relying on Foot Note No.10 to the relevant declaration in Form 15H. Brushing aside the objections raised by the appellant, it was treated as an “assessee in default” by separate orders, demanding tax under sub-section (1) and interest under sub-section (1A) of Section 201 of the Act. The first appeals against the afore orders were rejected by the Commissioner of Income Tax (Appeals), on account of which further appeals were instituted before the Income Tax Appellate Tribunal, Cochin Bench. The Tribunal, by the impugned common order dated 22.05.2024, having rejected the appeals, the appellant has instituted the captioned appeals under Section 260A of the Act.

3. The following questions of law arise for consideration in these appeals.

i. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in confirming that the appellant has to be treated as an assessee in default for failure to deduct TDS on interest income paid to senior citizens who have furnished declarations in Form 15H?

ii. Whether in view of Section 197A (1C), the appellant was obliged to deduct TDS from the interest paid to a senior citizen who has furnished declaration in form 15H, if such interest income exceeded the maximum amount not chargeable to income tax?

4. We have heard Sri.Joseph Markos, learned senior counsel for the appellant, and Sri. P.G. Jayashankar, learned Standing Counsel for the respondent-revenue.

5. The sole issue arising for consideration in these appeals is as regards the sustainability or otherwise of the proceedings taken against the appellant herein, by which it has been declared as an assessee in default.

6. It is not in dispute that the appellant had a duty to deduct the tax at source under the statute. The appellant seeks to take refuge under Section 197A (1C) of the Act, providing a specialised treatment as regards the payments being made to senior citizens. The afore sub-section reads as under:-

“(1C) Notwithst