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TMI Blog2021 (6) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... djudication in the appeal are reproduced herein below: "1 (a) The Id. Commissioner of Income Tax (Appeals) - 59, Mumbai ("the ld. CIT (A)") erred in facts and law in confirming the action of the ld. Assessing Officer and/or CPC (TDS), Ghaziabad in not rectifying the mistake apparent from record u/s. 154 of the Act. (b) The ld. CIT (A) erred in facts and law in treating the subject matter of rectification u/s. 154 of the Act as debatable one with two views possible. 2 The Id. CIT(A) erred in facts and law in confirming the action of the Id. Assessing Officer and/or CPC (TDS), Ghaziabad of imposing interest of Rs. 12,49,461/- u/s. 201(1A) of the Act by considering the date of realisation as the date of payment, instead of the date of tender / presentation of cheque." 3. Shri Rushabh Mehta appearing on behalf of the assessee, narrating the facts of case submitted, that the assessee is an autonomous body established under Mumbai Municipal Corporation Act, 1888, to administer civic affairs of Mumbai city. During the period relevant to assessment years under appeal, the assessee had made payments to contractors and employees after deducting tax at source under section 194C and 194 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. DCIT, 103 taxamann.com 396(Mum); (2) Moody's Analytics Knowledge Services India Pvt. Ltd. vs. ITO(TDS), 113 taxamman.com 448 (Bang); (3) Sahara Airlines Ltd. vs. Commissioner of Customs, 110 Taxman 378 (GOI); and (4) P L Haulwel Trailers Ltd. vs. DCIT, 100 ITD 485 (Chennai) 3.2. The ld. Authorized Representative of the assessee submitted that in the aforesaid decisions, after considering CBDT Circular No.261 (supra) it has been held that the date of tendering cheque be considered as the deemed date of payment and not the date of realization of cheque. The ld. Authorized Representative of the assessee further pointed that in the case of Sahara Airlines Ltd. (supra) the Government of India, Ministry of Finance, Department of Revenue has reiterated that upon tendering of a cheque, if it is not dishonoured later, it shall be deemed that payment has been made on the date when it was handed over to the Government's bankers. The above decision was rendered after considering Compilation of the Treasury Rules (in short 'CTR') and the Central Government Account (Receipts & Payment) Rules 1983 (in short 'the R&P Rules'). Sh. Mehta asserted that Circular No. 261 (supra) is still ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... become ineffective. 5. We have heard the submissions made by opposing sides and have examined the orders of authorities below. We have also considered the decisions on which the rival sides have placed reliance to buttress their respective arguments. The two issues that have emerged for adjudication before us are: (i) Whether rectification petition filed by the assessee under section 154 of the Act is maintainable in the facts and circumstances of the case? (ii) Whether the date of deposit of TDS amount through cheque is, the date of tendering cheque or the date of realization of cheque? 6. Before we proceed to decide above issues, it would be imperative to highlight the undisputed facts in this case. The assessee has not received original intimation under section 200A /201(1A) of the Act for the impugned quarters. The assessee has only received orders under section 154 of the Act for some of the quarters. It is an accepted fact that the assessee had tendered cheques for deposit of TDS collected under section 194C and 194J of the Act on or before the due date. The cheques deposited by the assessee were duly realized on presentation. For the sake of completeness the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the payment. In so far as the Department is concerned there is no ambiguity or element of vagueness on the issue. There may have been divergent views on this issue by the Appellate Forum, it is a settled legal position that the Board Circulars are not binding on the Appellate Tribunal or the Hon'ble High Courts. In so far as the Department is concerned, the Department cannot take a plea contrary to the circular issued by the Board that has not been withdrawn. Hence, the findings of the CIT(A) that the rectification petition under section 154 of the Act is not maintainable being a debatable issue is unsustainable. 8. The CIT(A) has relied on the decisions of Tribunal in the case of ICICI Bank Ltd. (supra), and GM, MPRRDA, PIU, Shivpuri vs. ITO(TDS) (supra) to hold that the date of realization of cheque is the date of payment. The CIT(A)'s reliance on the aforesaid decisions to conclude that the issue is debatable is misplaced. We observe that in both aforesaid cases, ostensibly, CBDT Circular No.261 (supra) was not brought to the notice of Bench. Thus, while rendering aforesaid decisions, the Bench was oblivious to Board Circular binding on the Department. 9. We further observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 and the receipt was issued on that date, however, the cheque was realized in the next financial year, the assessee was eligible for benefit under section 80G of the Act i.e. on the date of deposit of the cheque. 13. Similar view was taken by the Hon'ble Madras High Court in the case of CIT vs. REPCO Home Finance Ltd. 53 taxmann.com 47. In the aforesaid case the issue was with regard to charging of interest under section 234C of the Act. The question of law before the Hon'ble High Court for consideration was:- "Whether under the facts and circumstances of the case, the Tribunal was right in holding that the date of presentation of cheque in the bank is to be reckoned as the date of payment of advance tax and not the date on which the cheque is cleared and entered in the receipt roll as required under Rule 20 of the Central Government Account (Receipts and Payments) Rules 1983, for the purpose of calculating interest under Section 234C of the Income Tax Act?" The Hon'ble High Court after considering the judgment rendered in the case of CIT vs. Ogale Glass Works Ltd. (supra) and Raunaq Education Foundation (supra) held that once cheque issued by the assessee is encashed, the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f payment of government dues. The CIT(A) drawing support from the Central Government Account (Receipts and Payments) Rules, 1983, had therein concluded that as per the amended rules the government dues tendered in form of a cheque or draft shall be deemed to have been paid on the date on which it is cleared and entered in the receipt of scroll. Admittedly, we are in agreement with the view taken by the CIT(A) that the "Central Treasury Rules (Old Rules)" had been substituted by the "Central Government Account (receipts and payments) Rules. 1983". As per which the date on which a cheque or a draft is cleared is to be deemed as the date of making of the payment by a person towards government dues etc. However, at the same time we cannot remain oblivious of the fact that the CBDT Circular No. 261[F.No.385/6I/79-TT(B)], dated 08.08.1979 had not been withdrawn, and as such holds the ground as on date. Rather, it would be relevant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . From the analyses of decisions referred above, it can be securely deduced that the 'date of payment' to Government exchequer through cheque shall be the date of tendering/depositing the cheque, subject to cheque being honoured on presentation. After taking into consideration the facts of instant case and the decisions discussed above, we hold that the TDS deducted under section 194C and 194J of the Act was deposited by the assessee through cheque to the Government's Banker before the due date. Hence, no interest under section 201(1A) of the Act for alleged delay in deposit of TDS amount is chargeable to the assessee. The interest levied under section 201(1A) of the Act is directed to be deleted. The assessee succeeds on ground no.2 of the appeal. 18. In the result, impugned order is set aside and the appeal of assessee is allowed. ITA No. 1025 TO 1031/Mum/2019 Appeal ITA No. Assessment Year/Quarter 1025/Mum/2019 2012-13 - (26Q-Q2) 1026/Mum/2019 2012-13 - (26Q-Q3) 1027/Mum/2019 2012-13 - (26Q-Q3) 1028/Mum/2019 2012-13 - (26Q-Q4) 1029/Mum/2019 2011-12 - (26Q-Q4) 1030/Mum/2019 2012-13 - (26Q-Q3) 1031/Mum/2019 2012-13 - (26Q-Q2) 19. We find that identical grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X
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