TDS payment date under receipt scroll rules upheld for interest on delayed deposit under section 201(1A)

Delayed deposit of tax deducted at source attracted interest under section 201(1A) because payment through bank was treated as made only on the date the cheque or challan was cleared and entered in the receipt scroll. The Tribunal applied Rule 20(i) of the Receipts and Payments Rules and accepted the later challan date as the relevant date of payment, as the assessee could not show that it should be ignored. On that basis, the delay in deposit was established and the levy of interest was upheld against the assessee.

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Issues: Whether interest under section 201(1A) of the Income-tax Act, 1961 was rightly levied on the delayed deposit of tax deducted at source by treating the date of clearing and entry in the receipt scroll as the date of payment.

Analysis: The assessee could not show that the date reflected in the challan should be ignored. The Tribunal accepted the finding that there was delay in deposit of TDS. It also accepted the application of Rule 20(i) of the Receipts and Payments Rules, under which payment through bank is deemed to be made on the date on which the cheque or challan is cleared and entered in the receipt scroll. On that basis, the date of payment was taken as the later date shown in the challan, and the delay attracted interest under section 201(1A).

Conclusion: The levy of interest was upheld and the issue was decided against the assessee.

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