2020 (2) TMI 454 - AT - Income Tax

Demand on Interest on delayed payment of TDS - calculation of interest - Orders passed u/s. 201 and 201(1A) - Period of limitation - AY 2004-05 - HELD THAT - The Hon ble Madras High Court in the case of CIT vs. Chennai Metropolitan Water Supply Sewerage Board 2011 (9) TMI 224 - MADRAS HIGH COURT had held that interest u/s. 201(1A) has to be calculated from the date on which tax should have been deducted to the date on which payee should have filed its return under provisions of the Act. It was further held by Hon ble High Court that interest u/s. 201(1A) of I.T. Act is automatic. As mentioned earlier, the Assessing Officer had only passed order u/s. 201(1A) of I.T. Act for AY 2004-05. The interest u/s. 201(1A) since it is to be calculated from the date on which tax is to be deducted and being mandatory, the Assessing Officer has correctly calculated interest u/s. 201(1A) of the I.T. Act for the amount of TDS outstanding as on 31-03-2004., It is ordered accordingly. Thus, the appeal of the assessee for the assessment year 2004-05 is dismissed. AY 2005-06 - DR submitted that the payment has been made subsequent to the order passed u/s. 201(1) 201(1A) and there is no point in remitting the issue to the file of the Assessing Officer - The impugned order u/s. 201(1) and 201(1A) of the I.T. Act was passed on 04/02/2013. In the said order, balance TDS outstanding as on 31/03/2005 was determined at ₹ 1,50,529/- and interest u/s. 201(1A) of the I.T. Act was calculated up to the date of the order, i.e., 04.02.2013 amounting to ₹ 1,43,002/-. The payment made subsequent to the date of order, i.e., 04.02.2013 gets adjusted to the amount determined in the order dated 04.02.2013. The assessee has taken the plea that payments have been made on 13/03/2013 for the full amount of ₹ 1,50,529/- which is TDS outstanding as on 31/03/2005. The amount paid gets automatically adjusted to the amount determined as per the order passed u/s. 201(1) and 201(1A) of the I.T. Act. Therefore, there is no requirement of remitting the case of the file of the Assessing Officer. AY 2006-07 - Department itself has reduced the liability u/s. 201(1) 201(1A) of the I.T. Act to ₹ 4,430/- for the AY 2006-07 from ₹ 13,019/- originally determined. No other contentions have been raised. Hence, the appeal of the assessee for the assessment year 2006-07 is dismissed. A.Y. 2007-08 - According to the assessee there is no TDS payment outstanding for the A.Y. 2007-08 as per the addendum to the auditor s report dated 11/08/2008. It is to be noted that the assessee has filed rectification application before the Assessing Officer. It is for the assessee to pursue the rectification application filed before the Assessing Officer and prove its case that no TDS payment is outstanding as on 31/03/2007. Thus dismiss the appeal filed by the assessee

Summary

Issues:
Appeals against CIT(A) order u/s. 201(1) and 201(1A) of the I.T. Act for AYs 2004-05 to 2007-08.

Analysis:

Issue 1: Barred by Limitation
- The appeals raised concerns about orders u/s. 201 and 201(1A) being barred by limitation.
- The AR did not contest this aspect, and the Tribunal proceeded to adjudicate the appeals for each assessment year individually.

Issue 2: TDS Payment Dispute (AY 2004-05)
- Assessing Officer found TDS not remitted to the Government account, leading to interest calculation under section 201(1A) of the I.T. Act.
- CIT(A) upheld the calculation, and the Tribunal concurred based on the Madras High Court ruling regarding interest calculation.
- The appeal for AY 2004-05 was dismissed due to the correct interest calculation on outstanding TDS.

Issue 3: TDS Payment Dispute (AY 2005-06)
- Similar to AY 2004-05, the AO calculated outstanding TDS and interest, which was confirmed by CIT(A).
- The Tribunal noted that subsequent payments adjusted the outstanding amount, leading to the dismissal of the appeal for AY 2005-06.

Issue 4: TDS Payment Dispute (AY 2006-07)
- AO determined TDS not remitted, leading to interest calculation, which was later reduced by the Department.
- As no other contentions were raised, the appeal for AY 2006-07 was dismissed based on the reduced liability.

Issue 5: TDS Payment Dispute (AY 2007-08)
- AO held the assessee liable for TDS deduction and interest, which was confirmed by CIT(A).
- Assessee presented an addendum to the auditor's report indicating no demand payable for AY 2007-08.
- The Tribunal advised the assessee to pursue rectification application to prove no outstanding TDS, dismissing the appeal for AY 2007-08.

Conclusion:
- The Tribunal dismissed all appeals for AYs 2004-05 to 2007-08, upholding the orders passed by the Assessing Officer and CIT(A) regarding TDS deductions and interest calculations under sections 201(1) and 201(1A) of the I.T. Act.