Tribunal upholds interest levy on late TDS payment, dismisses appeals for assessment years.

The Tribunal dismissed all appeals, upholding the levy of interest on late payment of TDS under Section 201(1A) of the Income-tax Act, 1961. The dismissal of appeals for assessment years 2014-15 and 2017-18 to 2019-20 due to delay in filing was also affirmed. Despite acknowledging errors in the handling of the delay, the Tribunal upheld the Commissioner's decisions on the merits of the case.

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Issues Involved:
1. Levying interest on late payment of TDS under Section 201(1A) of the Income-tax Act, 1961.
2. Dismissal of appeals due to delay in filing.

Summary:

1. Levying Interest on Late Payment of TDS:
The primary issue in these appeals was whether the authorities were justified in levying interest on late payment of TDS under Section 201(1A) of the Income-tax Act, 1961. The Assessee, a Third Party Administrator (TPA) for insurance companies, made payments to various hospitals under a cashless scheme on behalf of insurance companies. The CPC-Bangalore charged interest on late payments of TDS under Section 201(1A) of the Act. The Assessee's first appeal was dismissed by the Commissioner, who upheld the levy of interest, referencing CBDT Circular No. 8/2009 and the Delhi High Court's decision in Writ Petition (Civil) No. 121 of 2010, which clarified that Section 194J applies to payments made by TPAs to hospitals. The Commissioner noted that the Assessee did not provide any documentary evidence to avoid being treated as an assessee-in-default and emphasized that interest under Section 201(1A) is consequential and not subject to financial hardship.

2. Dismissal of Appeals Due to Delay in Filing:
The appeals for assessment years 2014-15 and 2017-18 to 2019-20 were also dismissed as barred by limitation. The Assessee claimed delays were due to the departure of their CFO in 2015 and ongoing efforts to correct significant demands in TRACES. However, the Commissioner found these reasons insufficient, attributing the delay to negligence. The Tribunal noted that once the Commissioner decided the appeals on merits, it implied that the delay was condoned. Citing the Madras High Court's decision in Vijayeswari Textiles Ltd vs. CIT, the Tribunal held that deciding on merits while refusing to condone the delay was erroneous. Nevertheless, the Tribunal upheld the Commissioner's decision on the merits of the case.

Conclusion:
The Tribunal dismissed all appeals, affirming the levy of interest on late payment of TDS and the Commissioner's handling of the delay in filing appeals. The order was pronounced in open court on 29/03/2023.

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