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TMI Blog2018 (12) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... d the facts of the case in treating the assessee as being in default for delay in deposit of TDS, though the cheques towards the amount of TDS were tendered by the assessee with the government bank within the stipulated time period, had been deliberated upon and adjudicated by us while disposing off the appeal of the assessee for the ‘first quarter‟ for the year under consideration therefore, our order therein passed shall apply mutatis mutandis for disposing off the present appeal of the assessee for the ‘first quarter‟. Before parting, we may herein observe that as we have quashed the interest levied by the A.O under Sec. 201(1A), therefore, the consequential demand raised by the A.O towards additional late payment interest and Interest under Sec. 220(2) shall also stand vacated. - ITA Nos. 5394 to 5398/Mum/2017 - - - Dated:- 30-11-2018 - Shri Pradip Kumar Kedia, Accountant Member and Shri Ravish Sood, Judicial Member For The Appellant : Shri Rajesh Simhan And Shri Ashish Sodhani, A.Rs For The Respondent : Shri V.Vidhyadhar D.R ORDER Per Bench, The present appeals filed by the assessee for A.Y 2008-09 are directed against the respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the TDS Reconciliation Analysis and Correction Enabling System (for short TRACES‟), Ghaziabad on 04.03.2015. On the basis of an intimation under Sec. 200A interest of ₹ 37,510/- on late payment of TDS was charged in the hands of the assessee. On the basis of an online justification report obtained by the assessee from TRACES‟, it was observed by the assessee that interest of ₹ 37,510/- was levied under Sec. 201(1A) for late deposit of TDS @ 1% for every month or part of a month, on the amount of such tax, from the date on which such tax was deductible till the date on which such tax was actually paid. 3. Aggrieved, the assessee assailed the levy of interest under Sec. 201(1A) in appeal before the CIT(A). It was the contention of the assessee before the CIT(A) that though the cheque towards payment of TDS was tendered on 04.07.2007 to the bank i.e State Bank of India, Branch: Bandra Kurla Complex, Mumbai well within the stipulated due date‟ i.e prior to 07.07.2007, however the bank had delayed the remittance of the amount to the government account. It was submitted by the assessee that the DCIT-CPC(TDS), Ghaziabad considering the delay on the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the stipulated time period i.e. on 04.07.2007, therefore, it could safely be held to have been discharged from its liability in respect of depositing of the TDS with the government exchequer, as the said payment was subsequently cleared in due course. The ld. A.R in order to drive home his aforesaid contention also took support of the judgment of the Hon‟ble Supreme Court in the case of K. Kaplana Saraswathi Vs. P.S.S. Somasundram Chettiar 1980 AIR 512 (SC). 5. Per contra, the ld. Departmental Representative (for short D.R‟) relied on the orders of the lower authorities. It was submitted by the ld. D.R that as the amount of TDS was deposited on 12.07.2007 i.e beyond the stipulated due date‟ of 07.07.2007, therefore, the A.O had rightly levied interest for the delay involved under Sec. 201(1A) of the Act. 6. We have heard the authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record. The issue involved in the present appeal lies in a narrow compass. We find that our indulgence in the present appeal has been sought by the assessee to adjudicate as to whether the CIT(A) is right in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to point out that the CBDT in all its wisdom had not even modified the Circular No. 261, dated 08.08.1979 which was issued prior to the Central Government Account (Receipt and Payments) Rules, 1983 . Be that as it may, the aforesaid benevolent circular‟ viz. Circular No. 261, dated 08.08.1979 issued by the CBDT on the date of tendering of the cheque by the assessee towards the amount of TDS to the government bank, did hold the ground and was thus binding on the revenue. We are unable to persuade ourselves to subscribe to the observations of the CIT(A), that as the Central Treasury Rules (Old Rules) had been rendered as redundant, therefore, the CBDT Circular No. 261, dated 08.08.1979 would therein follow and also has to be taken as having been rendered as otiose. 7. We shall now advert to certain judicial pronouncements which fortifies the claim of the ld. A.R that the assessee stood discharged of its liability of depositing the TDS on the date on which it had tendered the cheque with the government bank. We find that that Hon‟ble Supreme Court in the case of K. Kaplana Saraswathi Vs. P.S.S. Somasundram Chettiar 1980 AIR 512 (SC) has held that payment by cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government Account (Receipts and Payments) Rules, 1983 and the CBDT Circular No. 261, dated 08.08.1979, concluded that where the cheque was deposited with a bank before the 7th day of the month following the month in which TDS was deducted, no interest could be charged. 8. We have deliberated at length on the issue under consideration before us in the backdrop of the facts and the aforesaid judicial pronouncements. In terms of our aforesaid observations, we are of the considered view that as the assessee had admittedly tendered the cheque with the bank i.e. State Bank of India, Branch: Bandra Kurla Complex, Mumbai well within the stipulated due date‟, therefore, it cannot be held as being in default for the delay on the part of the bank or the clearing house in making the remittance of the said amount to the Government Account. We thus in the backdrop of our aforesaid deliberations, not being able to persuade ourselves to subscribe to the view taken by the lower authorities that the assessee was to be treated as being in default for delay in deposit of the amount of TDS, thus set aside the order of the CIT(A) and delete the interest of ₹ 37,510/- levied by the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, Branch: Bandra Kurla Complex, Mumbai before the stipulated due date‟, however the bank had delayed the remittance of the amount to the government account. It was submitted by the assessee that the DCITCPC (TDS), Ghaziabad considering the delay on the part of the bank as the delay in payment of TDS by the assessee, had thus wrongly levied interest under Sec. 201(1A). However, the CIT(A) after deliberating on the contentions of the assessee was not persuaded to subscribe to the same and treating the assessee as being in default for not depositing the amount of TDS within the stipulated time period, thus upheld the order of the A.O. 13. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. We find that as the issue involved in the present appeal i.e as to whether the CIT(A) is right in law and the facts of the case in treating the assessee as being in default for delay in deposit of TDS, though the cheques towards the amount of TDS were tendered by the assessee with the government bank within the stipulated time period, had been deliberated upon and adjudicated by us while disposing off the appeal of the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te deposit of TDS @ 1% for every month or part of a month, on the amount of such tax, from the date on which such tax was deductible till the date on which such tax was actually paid. 17. Aggrieved, the assessee assailed the intimation under Sec. 154 passed by the DCIT, CPC-(TDS), Ghaziabad levying interest under Sec. 201(1A) in appeal before the CIT(A). It was the contention of the assessee before the CIT(A) that though the cheques towards payments of TDS were tendered with the bank i.e State Bank of India, Branch: Bandra Kurla Complex, Mumbai before the stipulated due date‟, however the bank had delayed the remittance of the amount to the government account. It was submitted by the assessee that the DCITCPC( TDS), Ghaziabad considering the delay on the part of the bank as the delay in payment of TDS by the assessee, had thus wrongly levied interest under Sec. 201(1A). However, the CIT(A) after deliberating on the contentions of the assessee was not persuaded to subscribe to the same and treating the assessee as being in default for not depositing the amount of TDS within the stipulated time period upheld the order of the A.O. 18. The assessee being aggrieved with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest. It was observed by the assessee that interest was levied under Sec. 201(1A) for late deposit of TDS @ 1% for every month or part of a month, on the amount of such tax, from the date on which such tax was deductible till the date on which such tax was actually paid. 22. Aggrieved, the assessee assailed the intimation passed under Sec. 154 by the DCIT, CPC-(TDS), Ghaziabad levying interest under Sec. 201(1A) in appeal before the CIT(A). It was the contention of the assessee before the CIT(A) that though the cheques towards payments of TDS were tendered to the bank i.e State Bank of India, Branch: Bandra Kurla Complex, Mumbai before the stipulated due date‟, however the bank had delayed the remittance of the amount to the government account. It was submitted by the assessee that the DCITCPC (TDS), Ghaziabad considering the delay on the part of the bank as the delay in payment of TDS by the assessee, had thus wrongly levied interest under Sec. 201(1A). However, the CIT(A) after deliberating on the contentions of the assessee was not persuaded to subscribe to the same and treating the assessee as being in default for not depositing the amount of TDS within the stipula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23,200/- was determined towards viz. (i). Interest on late payment : ₹ 13,35,950/- ; (ii). Short deduction/collection : ₹ 3.44; (iii). additional late payment interest : ₹ 226/-; and (iv). Interest under Sec. 220(2) : ₹ 1,87,018/-. It was observed by the assessee that interest was levied under Sec. 201(1A) for late deposit of TDS @ 1% for every month or part of a month, on the amount of such tax, from the date on which such tax was deductible till the date on which such tax was actually paid. 27. Aggrieved, the assessee assailed intimation under Sec. 154 passed by the DCIT, CPC-(TDS), Ghaziabad levying interest under Sec. 201(1A) in appeal before the CIT(A). It was the contention of the assessee before the CIT(A) that though the cheques towards payments of TDS were tendered with the bank i.e State Bank of India, Branch: Bandra Kurla Complex, Mumbai on 06.02.2008 i.e before the stipulated due date‟, however the bank had delayed the remittance of the amount to the government account. It was submitted by the assessee that the DCIT-CPC (TDS), Ghaziabad considering the delay on the part of the bank as the delay in payment of TDS by the assessee, had thu ..... 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