2023 (5) TMI 411 - AT - Income Tax

Levy of interest on delay in deposit of TDS - HELD THAT - When the payments have been electronically made on 07.07.2020 which is the due dates and the money has flown from the bank account of the assessee it should not make any difference when the same has been shown to be credited to the Governments account. This is evident from the bank statement. We are of the view that the assessee has deposited tax on or before the due date, therefore, the AO is directed to delete the impugned addition. Decided in favour of assessee.

Summary

Issues involved: Appeal against levy of interest on delay in TDS deposit for A.Y. 2021-22.

Summary:
The ITAT New Delhi heard three separate appeals by the assessee against orders of NFAC Delhi regarding the levy of interest on alleged delay in TDS deposit for A.Y. 2021-22. Common issues were addressed collectively for convenience. The grievance was in respect of interest on the delay in TDS deposit. The assessee was required to deposit TDS by 7th July 2020 as per IT Rules 1962. Although the amount was debited on 07.07.2020, the stamp on the challans showed 08th July 2020. Interest was levied u/s. 201(1A) of the Act for the delayed deposit, which was challenged before CIT(A) unsuccessfully. The Counsel argued that the assessee fulfilled its duty by depositing the tax on time, and no interest should be levied due to bank transfer delay. The DR supported NFAC's findings.

Upon review, the ITAT found that the payments were made electronically on the due date, and the money left the assessee's account on time, as evidenced by the bank statement. The ITAT concluded that the tax was deposited on or before the due date, directing the AO to delete the addition. Consequently, the appeals by the assessee were allowed, and the order was pronounced on 19.04.2023.