Cheque Tender Date is the date of payment; records must be corrected and interest refunded where system-recording caused artificial delay.

Where cheques for TDS were tendered to the bank within statutory due dates and subsequently honoured, the cheque-tender date constitutes the date of payment and must be treated as such; a demand based on OLTAS/portal recording of cheque-realisation dates that creates artificial delay and interest is incorrect. The administratively proper effect is to rectify records (including manual measures if system limitations prevent altering challan dates), delete the erroneous demand, and refund amounts paid under protest with interest under the statutory refund provision from the date of payment until refund.

---

---

Issues: Whether the outstanding demand for interest for late payment of TDS (arising from OLTAS recording cheque-realisation date instead of cheque-tender date) is incorrect and whether the petitioner is entitled to deletion of that demand and refund of amounts paid under protest with applicable interest.

Analysis: The factual position is admitted that cheques for TDS were tendered to the authorised bank within the statutory due dates and were subsequently honoured. Board Circular No. 261 dated 08.08.1979 treats the date of tendering a cheque as the date of payment where the cheque is honoured. The demand arose solely because the Department's OLTAS/portal recorded cheque-realisation dates as payment dates, producing an artificial delay and consequent interest liability. The Department's inability, due to system limitations, to alter challan dates or to reflect the correct tender date does not override the settled legal position that the cheque-tender date is the date of payment. Where the system cannot give effect to the legally correct position, administrative or manual measures must be adopted to rectify records and grant relief.

Conclusion: The outstanding demand based on wrongly recorded delayed payment is incorrect; the respondent authority must treat the cheque tender dates as the dates of payment, delete the erroneous demand, and refund the amount paid under protest with interest under Section 244A of the Income-tax Act, 1961 from the date of payment until refund.

---