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2022 (12) TMI 73 - AT - Income Taxwaiver of Interest charged u/s 201 - one day delay in deposit of TDS - delay in deposit of TDS caused by negligence on the part of the Bank - Whether the payment would be deemed to have been made on the date of handing over of cheque to the banker or on the date of clearance of cheque by debiting the Assessee s account for the purpose of tendering the TDS? - HELD THAT - In the instance case, there is One day delay in debiting the amount from the Assessee s bank account which is apparently due to the mistake to the banker. Further by relying on the ratio laid down in the case of Standard Chartered Bank 2020 (8) TMI 665 - ITAT MUMBAI we are of the opinion that the payment of TDS by the assessee would relate bank to the date of presentation of the cheque i.e. on 31/07/2013 by the assessee to the banker. Therefore, the interests levied by the Revenue authorities are deserves to be waived off. Accordingly, we allow the Grounds of Appeal of the assessee.
Issues:
1. Confirmation of interest charged under section 201 of the Act due to delay in TDS deposit caused by bank negligence. Detailed Analysis: The appeal was filed by the assessee, a non-banking finance company, against the order of the ld. Commissioner of Income Tax (Appeals)-30, New Delhi, for the assessment year 2012-13. The primary issue raised by the assessee was the confirmation of interest charged under section 201 of the Act due to a delay in the deposit of TDS caused by negligence on the part of the bank. The assessee had accepted inter-corporate deposits during the financial year 2012-13 and made provisions for interest and TDS accordingly. The TDS amount was deposited on 31/07/2013, but due to the bank's negligence, it was credited on 01/08/2013. The dispute arose regarding the date of payment and whether the delay should result in interest charges. The contention of the assessee was that the TDS was deposited to the bank on time, and any delay in crediting it should not penalize the assessee. The Revenue authorities, however, relied on the mandatory nature of interest under section 201(1)/201(1A) of the Act. The Tribunal examined whether the payment should be deemed made on the date of handing over the cheque to the bank or on the date of clearance for TDS tendering purposes. The Tribunal referred to a Mumbai Bench decision for the assessment year 2008-09, which favored the assessee in a similar factual scenario. The Tribunal extensively analyzed the CBDT Circular No. 261, dated 08.08.1979, which clarified the date of tendering a cheque for government dues as the date of payment. Various judicial pronouncements were cited, including Supreme Court and High Court decisions, supporting the view that payment by cheque should be considered due payment if subsequently encashed. The Tribunal highlighted that the CBDT Circular remained valid and binding, despite subsequent rule changes. It was emphasized that the date of cheque presentation should be considered the date of payment unless the cheque is dishonored. Based on the legal precedents and the specific circumstances of the case, the Tribunal concluded that the assessee should not be considered in default for the delay caused by the bank in crediting the TDS amount. The Tribunal held that the interest levied by the Revenue authorities should be waived off, and the grounds of appeal by the assessee were allowed. The decision was in line with previous judgments and established legal principles regarding TDS payments and bank delays. Overall, the Tribunal's decision favored the assessee, emphasizing the importance of considering the date of cheque presentation as the date of payment, especially in cases where delays are beyond the assessee's control. The judgment highlighted the significance of relevant legal provisions and circulars in determining the liability for interest charges related to TDS deposits.
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