1990 (5) TMI 76

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....nt to the asst. yr. 1984-85, the assessee credited interest to the account of some of its creditors on which tax was deductible under s. 194A of the IT Act. Entries for interest were stated to have been passed in the month of April, 1985 relating to the previous year ending on 4th Nov., 1983 and the tax on such interest was paid to the credit of the Central Government on 26th Nov., 1985. It is the....

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....ing of accounts in November, 1985 that entries were passed for interest and soon after the tax was paid to the credit of the Government and thus there was reasonable cause even if there had been any delay. Thus, it was contended that interest is not leviable. The ITO took notice of the date of credit of interest in the accounts which was on 12th Nov., 1983 and as the tax was paid only subsequently....

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...., at the time of payment tax is to be deducted; if the credit entry preceded the actual payment, tax is deductible at the time of credit. In most of the accounts, payment of interest had not been made either during the year or during the subsequent years and in a few accounts payment was made only subsequent to the passing of the credit entry. Therefore, what is relevant for deciding the issue is ....

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....on 4th Nov., 1983, was filed only on 29th Dec, 1985 though it was due as early as 30th June, 1984, which would mean that the accounts got delayed on account of retention of the books, whether relating to this year or earlier years, by the Department. It is also pertinent to note that the learned ITO has not chosen to levy penalty under s. 201(1) r/w the proviso thereto for the delay, if any, in th....