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2015 (10) TMI 2295 - AT - Income TaxDelays in remittance of TDS amounts - delay on the part of the bank or the clearing house - Held that - Remittance of TDS which were effected by the assessee either through e-gateways, or by cheques. These were admittedly done before the due dates. Such payments once made before the due date, it was beyond the control of assessee to ensure its transmission to the Government account within such due date. Assessee could never be faulted for delay on the part of the bank or the clearing house, whatever may be the rules governing receipts and payments into the Central Government account. In our opinion, reason given by the CIT (A) cannot be faulted with. We do not find any reason to interfere with his orders.- Decided in favour of assessee.
Issues:
- Interpretation of payment date in relation to cheque presentation - Reliance on CBDT Circular No. 261 - Application of Central Government Accounts (Receipts and Payments) Rules 1983 - Consideration of delays in TDS remittance - Liability for interest under section 201(1A) of the Income-tax Act, 1961 Interpretation of Payment Date in Relation to Cheque Presentation: The case involved a dispute over the date of payment concerning tax deducted at source (TDS) by the assessee. The Assessing Officer (AO) contended that TDS amounts were received in the Government account beyond the stipulated time, leading to the imposition of interest under section 201(1A) of the Income-tax Act, 1961. The assessee argued that the date of payment related back to the date of cheque presentation or electronic transfer. The CIT (A) supported the assessee's position, citing CBDT Circular No. 261, which stated that payment through cheques would relate back to the cheque presentation date upon clearance. Reliance on CBDT Circular No. 261: The CIT (A) relied on CBDT Circular No. 261 to support the assessee's contention regarding the payment date in the case of cheque presentations. The circular clarified that if a cheque tendered for Government dues is honored upon presentation, the payment is deemed to have been made on the date it was handed over to the Government bankers. This interpretation was crucial in determining the validity of the assessee's argument and played a significant role in the decision-making process. Application of Central Government Accounts (Receipts and Payments) Rules 1983: The AO based the decision on delays in TDS remittance on the Central Government Accounts (Receipts and Payments) Rules 1983. The AO emphasized that for government dues payable within a specific date, the payer should ensure timely receipt in the Government account. However, the CIT (A) disagreed, noting that the assessee's payments were made before the due dates, and any delays in transmission to the Government account were beyond the assessee's control, especially in cases of cheque clearance delays. Consideration of Delays in TDS Remittance: The issue of delays in TDS remittance was central to the dispute, leading to the imposition of interest under section 201(1A) of the Income-tax Act, 1961. The AO argued that delays occurred in remitting TDS amounts to the Government account, justifying the interest levy. In contrast, the assessee maintained that payments were made on time, either through electronic transfers or cheques, and any delays were due to external factors beyond their control, such as bank processing times. Liability for Interest under Section 201(1A) of the Income-tax Act, 1961: Ultimately, the Tribunal upheld the CIT (A)'s decision, dismissing the Revenue's appeals. The Tribunal found that the assessee had made TDS remittances before the due dates, absolving them of liability for delays in the transmission to the Government account. The Tribunal emphasized that the assessee could not be faulted for delays caused by banking processes, supporting the application of CBDT Circular No. 261 in determining the payment date for cheque transactions. As a result, the interest levy under section 201(1A) was deemed unwarranted, leading to the dismissal of the Revenue's appeals.
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