Appellant wins appeal on advance tax default for AYs 2007-08 & 2008-09 due to timely payments.

The appellant successfully appealed against the orders of the ld. CIT(A) regarding default in payment of advance tax for AYs 2007-08 & 2008-09. The Tribunal ruled in favor of the assessee, stating that the payments were made on time but cleared by the bank after due dates, following Circular No. 676 of CBDT. As the assessing officer's decisions on interest u/s 234B and 234C were overturned, the interest receivable under Section 244A needed revision. Additionally, the Tribunal found in favor of the assessee regarding the addition on account of differences in income reported in AIR for AY 2009-10, resulting in all appeals being allowed.

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Issues:
1. Default in payment of advance tax - Interest charged u/s 234B and 234C.
2. Grant of interest u/s 244A.
3. Addition on account of difference in income reported in AIR.

Analysis:

Issue 1: Default in payment of advance tax - Interest charged u/s 234B and 234C
- The appellant filed appeals against the orders of ld. CIT(A) regarding default in payment of advance tax for AYs 2007-08 & 2008-09.
- Revenue claimed interest u/s 234B and 234C as the assessee paid advance tax after due dates.
- Assessee argued that payments were made on time but cleared by the bank after due dates, supported by a Circular No. 676 of CBDT.
- Circular clarified that if the last day for payment falls on a holiday, payment on the next working day is acceptable without interest charges.
- The collecting banker acts as an agent of the customer, and if the cheque is cleared after the due date, it is deemed as paid on time.
- The Tribunal concluded that the assessee paid advance tax within due dates and was not liable for interest u/s 234B and 234C.

Issue 2: Grant of interest u/s 244A
- For AY 2007-08, the Assessing Officer denied interest u/s 244A, claiming the refund didn't exceed 10% of total tax payable.
- Since interest u/s 234B and 234C was decided in favor of the assessee, interest receivable needed upward revision.
- The AO was directed to re-compute interest payable as per Section 244A(1)(a).

Issue 3: Addition on account of difference in income reported in AIR
- In AY 2009-10, the AO added a sum due to differences in income reported in AIR.
- Assessee explained that interest income was accounted for provisionally due to pending TDS certificates.
- The difference in interest was adjusted in the next financial year, ensuring no tax avoidance or deferment.
- The Tribunal noted that the mismatch was due to TDS deductions and interest earned, with the assessee consistently following the same accounting system.
- Considering the revenue-neutral nature of the exercise and consistent tax rates, no disallowance was warranted.
- Consequently, all appeals of the assessee were allowed.

This detailed analysis covers the issues of default in payment of advance tax, grant of interest u/s 244A, and addition due to differences in income reported in AIR, as addressed in the ITAT Delhi judgment.

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