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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 ..... on and has not examined the contents of the petition. Para 2 of the petition clearly states the reason for seeking rectification based on CBDT Circular. Therefore, the CIT(A) has erred in not examining the petition of assessee in entirety. We hold that the rectification petition under section 154 of the Act for seeking correction in the date of deposit of TDS amounts was maintainable in its present form. The ground No.1 raised in appeal by the assessee, is thus, allowed. Where the TDS amount has been deposited to the Government Exchequer thorough cheque, whether the date of tendering cheque to the Government s Banker or the date of realization of the cheque is the date of actual payment - The Hon'ble Supreme Court of India in the case of CIT vs. Ogale Glass Works Ltd., [ 1954 (4) TMI 3 - SUPREME COURT ] held that where the payment is made by cheque, the date of payment would be date of delivery of cheque, provided the cheque is honoured on presentation to the bank. Thus 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 ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airs 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 194J of the Act. The assessee tendered Tax Deducted at Source (TDS) for each quarter to the Government Exchequer by way of cheque. The TDS amounts were deposited before the due date. Later, the assessee discovered from TRACES Portal that demands were raised for different quarters falling in Financial Years 2010-11 and 2011-12. The assessee did not receive original intimations, under section 200A of the Act for the quarters under dispute, barring few. The intimation received from the DCIT (TDS)-1(3), Mumbai (Assessing Officer) were not the original intimations but were the rectified orders. After examining intimations, it transpired that interest under section 201(1A) of the Act has been levied for delay in deposit of TDS amounts. The assessee filed rectification petition under section 154 of the Act to delete the interest as the payments were made through cheque before due date. It was specifically urged that as per CBDT Circular, the date of deposit of cheque was the date of payment and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 effective as the same has not been withdrawn by the CBDT till date. The CIT(A) has erred in holding that after introduction of R P Rules w.e.f. 01/6/1983, CTR and Circular No.261 would no longer be applicable. 3.3. The ld. Authorized Representative of the assessee submitted that the CIT(A) has erred in holding that rectification petition filed by assessee under section 154 was not amenable. The CIT(A) has erred in recording that the application under section 154 was made by the assessee for seeking rectification in the date of challan. The ld. Authorized Representative of the assessee pointed that the rectification petitions filed under section 154 of the Act are at page 1 to 25 of the Paper Book. It has been categorically stated in the petition that the assessee is seeking rectification in the date for considering date of payment/deposit of TDS. It was pointed that the date of tendering cheque should be considered as date of payment/deposit of TDS amount instead of date of realization of the cheque. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4C 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 dates are tabulated herein below: Section Tax Deducted (in Rs.) Date of Deposit of Cheque Due Date Date of realization of Cheque 194J 3,34,815/- 06/8/2011 08/8/2011 09/8/2011 194C 1,63,55,074/- 06/8/2011 08/8/2011 09/8/2011 7. The first issue for our consideration is maintainability of rectification petition filed by the assessee under section 154 of the Act. The assessee had filed rectification petition seeking correction in the date of tendering/deposit of challans along with cheque. The prayer of the assessee was to consider date of tendering/deposit of cheque in the bank as deemed date of payment of TDS amount instead of date of realization of the cheque. Reference was made to CBDT Circular No.261 (supra). The relevant extract of the circular on which reliance was placed reads as under:- In terms of Rule 80 of the Compilation of the Treasury Rules, if a cheque or draft tendered in payment of Government dues and accepted under the provisions of Rule 79 is honoured on presentation, the payment is deemed to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while rendering aforesaid decisions, the Bench was oblivious to Board Circular binding on the Department. 9. We further observe that the CIT(A) in impugned order has only referred to the title (subject) of rectification petition and has not examined the contents of the petition. Para 2 of the petition clearly states the reason for seeking rectification based on CBDT Circular. Therefore, the CIT(A) has erred in not examining the petition of assessee in entirety. We hold that the rectification petition under section 154 of the Act for seeking correction in the date of deposit of TDS amounts was maintainable in its present form. The ground No.1 raised in appeal by the assessee, is thus, allowed. 10. The second issue in appeal before us is, where the TDS amount has been deposited to the Government Exchequer thorough cheque, whether the date of tendering cheque to the Government s Banker or the date of realization of the cheque is the date of actual payment. To decide this question, it would be relevant to refer to some decisions rendered over the period of time on this issue. 11. The Hon'ble Supreme Court of India in the case of CIT vs. Ogale Glass Works Ltd., (1954) 25 ITR 529 he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (supra) and Raunaq Education Foundation (supra) held that once cheque issued by the assessee is encashed, the payment relates back to the date of receipt of cheque. Here it would not be out of place to mention that the Hon ble High Court decided the issue of date of payment of advance tax after considering R P Rules, 1983. 14. The Co-ordinate Bench of Tribunal in the case of ONGC vs. DCIT (supra) after considering CBDT Circular No.261 (supra) and the Central Government Account (Receipts Payments) Rules 1983 and catena of judgments on this issue held that the date of tendering cheque shall be deemed to be the date of deposit. The relevant extract of the Tribunal order read as under:- 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 and the facts of the case in treating the assessee as being in default for delay in deposit of TDS, though the cheque towards the amount of TDS was ten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt 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. [Emphasized by us] The Tribunal after considering CTR, R P Rules, 1983 and Circular No.261 (supra) concluded that the Department is bound by Board Circular. Since, the said circular has not been withdrawn, it is still valid and holds the ground. Thus, the date of deposit of cheque in the bank is the date of payment. Similar view has been expressed in the case of Moody s Analytics Knowledge Services India Pvt. Ltd. vs. ITO (TDS) (supra), P L Haulwel Trailers Ltd. vs. DCIT (supra) and in the recent decision by the Co-ordinate Bench in the case of Standard Chartered Bank vs. DCIT, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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