- (1.) This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 15.4.2015 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 1128/CHD/2014, for the assessment year 2012-13, claiming the following substantial questions of law:- Whether the ITAT was right in law in deleting the demand created u/s 201(1) & 201(1A) in respect of Punjab Infrastructure Development Board, treating the assessee in default for not deducting the tax at source, as compulsory required u/s 194A of the Act, whereas no automatic exemption is available, even if the assessee is exempted u/s 10(23C)(iv) of the Act
(2.) Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. A TDS Inspection/ Survey under Section 133A of the Act was carried out at the business premises of the assessee on 14.5.2013. During the course of said survey, it was noticed that the assessee had made payment of interest without deduction of tax at source to the following persons:- (i) Director, PEC University of Technology, Chandigarh (Salary Account); (ii) Director, PEC University of Technology (PF Trust Fund); (iii) PEC University of Technology (Pension Fund Trust); and (iv) Punjab Infrastructure Development Board.
(3.) The Assessing Officer questioned the assessee for nondeduction of tax on interest payments, who produced lower deduction certificate for the financial year 2012-13 in respect of some of the persons but failed to produce the same for the financial year 2011-12 being not traceable. As the lower deduction of tax certificate was not produced by the assessee, the Assessing Officer held the Person Responsible (PR) as 'assessee in default' and created demand of Rs. 74,03,620/- under Sections 201(1) and 201(1A) of the Act for nondeduction of tax at source on total interest payment of Rs. 6,01,92,037/-. Further, the assessee had also not deducted tax at source on payments made to three individuals (NNND Agents) hired by the bank for daily collection purposes in respect of pigmy deposits. The Assessing Officer treated the payment made to the three individuals as commission under Section 194H of the Act and by holding the PR as 'assessee in default' for non-deduction of tax at source created the demand of Rs. 98,944/- under Section 201(1)/201(1A) of the Act. The Assessing Officer vide order dated 28.2.2014 (Annexure A-1) created a total demand of Rs. 75,02,564/- for non-deduction of tax at source. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), Chandigarh [for brevity "the CIT(A)"]. The CIT(A) vide order dated 31.10.2014 (Annexure A-2) partly allowed the appeal of the assessee and deleted the demand. Against the order, Annexure A-2, the assessee as well as revenue filed appeals before the Tribunal who vide order dated 15.4.2015 (Annexure A-3) upheld the order of the CIT(A) and dismissed both the appeals. Hence, the present appeal. 3. Learned counsel for the appellant-revenue submitted that the assessee was required to deduct TDS under Section 194A of the Act and having failed to do so, was liable for additional demand under Sections 201(1) and 201(1A) of the Act.;