Advance tax payment by net banking with debitchallan date mismatch; interest denied as payment treated timely

Payment initiated by net banking and debited from the assessee's account on 15 December 2023 was treated as payment within the statutory due date despite the challan reflecting 16 December 2023. The tribunal reasoned that crediting to the department is a bank-driven process prone to technical delay and that the revenue must prove a contrary fact; therefore interest for delayed advance tax was not leviable when the taxpayer's bank statement showed timely debit. Decision favoured the taxpayer on the date-of-payment issue and denied interest liability arising solely from a subsequent challan date.

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Issues: Whether the assessee's advance tax payment for the third quarter made by electronic mode (debited from bank account on 15.12.2023) is to be treated as paid within time for A.Y. 2024-25 for the purposes of Section 234C of the Income-tax Act, 1961, notwithstanding that the challan receipt was generated on 16.12.2023.

Analysis: The Tribunal examined the undisputed record showing the amount was initiated and debited from the assessee's bank account on 15.12.2023 while the challan receipt bearing the same bank reference number was generated on 16.12.2023. The Tribunal applied principles established in authority holding that the date of presentation/debit is the operative date of payment (presentation of cheque/negotiable instrument relates back to presentation) and recognised that electronic/net-banking payments are analogous for determining the date of payment. The Tribunal further noted that crediting of funds to the Government account is a bank/processing function subject to technical delay, which is not attributable to the taxpayer, and that the Revenue must prove contrary to rebut the presumption that payment was made within the statutory due date.

Conclusion: The advance tax payment is to be treated as made on 15.12.2023 and interest under Section 234C is not leviable; decision is in favour of the assessee.

Ratio Decidendi: For determining timely payment of tax, the operative date is the date on which the taxpayer effects payment (debit/presentation date) including electronic debits, and delays in generation/crediting of challan by banks or the department do not make the payment late.

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