- (1.) ALL the aforesaid appeals have been filed by the Revenue, challenging the order passed by the Tribunal. The grounds of challenge are the same. They involve similar issues though for different assessment years, therefore, we are deciding these appeals by a common order.
(2.) THE assessee company during the asst. yrs. 1996 -97, 1997 -98, 1998 -99 and 2001 -02 in IT Appeal Nos. 106/2006, 107/2006, 108/2006 and 109/2006 and asst. yrs. 1996 -97, 1997 -98 and 1998 -99 in IT Appeal Nos. 110/2006, 111/2006 and 112/2006 was carrying on the business of mobilization of deposit and was registered with RBI as residuary non -banking company. It failed to file TDS returns in compliance of the provisions of s. 206 r/w r. 37 of the IT Rules for the different financial years. The AO observed that any person who was responsible for paying any income by way of interest shall at the time of credit of such income to the account of payee or at the time of payment thereof in cash/ cheque/draft/other mode whichever is earlier deduct income -tax. It was noticed by the AO that the deduction of the TDS was made on different dates in the different financial years and that the date of filing of Form No. 26A (return) was also made clear. Consequently, proceedings under s. 272A(2)(c) of the Act for paying penalty were initiated against the assessee and the penalty was, thus, imposed.
(3.) IN appeal, it was urged by the assessee, that as per terms and conditions of the scheme, majority of which were recurring in nature, interest payable on deposit varies according to behaviour pattern of account as premature encashment of account and, therefore, it was not possible for the assessee to know as to what rate of interest was to be paid to the depositor, as the rate on which interest will be paid, will automatically be different according to deposit accounts behaviour pattern/premature encashment/tenure accounts, etc. Consequently the assessee company had not credited any interest to the account of individual depositor and the interest was provided by the assessee company on the balance outstanding under a scheme as whole in accordance with the mercantile system of accounting. Thus, it was submitted that since the interest provision was in the nature of global provision made on the gross amount of deposit scheme - -wise irrespective of the fact whether any individual deposit account attracted the provisions of s. 194A or not, it was not possible for the assessee company to attribute interest to individual account because of the varying terms and conditions vis -a -vis rate payable on the deposit under the scheme. However, the plea raised, was not accepted and the appeal was dismissed. The Tribunal relying upon the judgment passed by the Tribunal in Sahara Air Lines Ltd in ITA Nos. 146 to 149/Luck/2005 for the asst. yrs. 1998 -99, 1999 -2000, 2000 -01 and 2001 -02 allowed the appeals in part after directing that the penalty under s. 272A(2)(c) could not be levied but proceedings under s. 271C may continue. The Tribunal also directed that the AO may compute the penalty in thirty days' time from the date of deposit of tax.;