- (1.) With the consent of the learned advocates these two writ petitions are heard and decided today.
(2.) These two writ petitions under article 226 of the Constitution are filed by the State Bank of India, Raj Bhavan Branch, Patna (hereinafter referred to as "the bank") against the orders dated August 25, 2010, made under section 154 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), by the Commissioner of Income-tax (TDS), Patna (hereinafter referred to as "the Commissioner TDS") for the assessment year 2003-04.
(3.) The matter in dispute pertains to the amount of tax deducted by the petitioner-State Bank of India at source from the amount of interest paid to the depositors. The Income-tax Officer, TDS Ward -2(1), Patna, initiated proceedings against the bank for not deducting the appropriate amount of tax at source from the amount of interest payable to the depositors for the financial year 2003-04. Under order dated July 6, 2004, made by the Income-tax Officer, TDS Ward-2(1), Patna, under section 201 of the Act, the bank was held to be in default in deducting the tax at source from the amount of interest accrued to the depositors to the extent of Rs. 2,39,098 and the bank was directed to pay a sum of Rs. 2,39,098. Feeling aggrieved the bank filed a revision application before the Commissioner of Income-tax, Patna, under section 264 of the Act. The Commissioner of Income-tax, Patna, under his order dated October 25, 2005, accepted the defence of the bank partially in respect of certain depositors who had submitted Form 15H. He modified the order dated July 6, 2004, made under section 201 of the Act and reduced the liability of the bank to Rs. 1,90,287. The Commissioner of Income-tax, Patna, did not consider the plea that the interest paid to the Government of Bihar and to its departments was not taxable and, therefore, no tax was required to be deducted at source.;