Govt.depts-not assesable don't want tds -don't provide certi

Govt.Depts. who are depositing their surplus funds do not want any TDS to be deducted AS THEY DO NOT HAVE ANY PAN No.-THEY DON't HAVE ANY BECAUSE THEY ARE NOT ASSESSABLE TO TAX.     tHIS IS the logic.

Is it acceptable.

Apart from the other provisions - Is there any provision which says that TDS should not be deducted from the deposits of those who are not assessable to tax like (including those exempted U/s 35, 35AB, 35AC(like CSIR),  35CCA(rural Devt.)