2015 (10) TMI 2295

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....noured. 2. The CIT (A) has erred in placing reliance on the CBDT Circular No,261 dtd. 08.08.1979, 3. The CIT(A) has erred in not appreciating the fact that CBDT Circular No.261 dtd. 08.08.1979 was based on Rule 80 of the compilation of Treasury Rules and the said rules were replaced by Central Government Accounts (Receipts and Payments) Rules 1983. 4. The CIT(A) has erred in not appreciating the fact that as per Rule 20 of the Central Government Accounts (Receipts and Payments) Rules 1983, where cheque or draft is tendered to the bank, the date on which it was cleared and entered in the receipt scroll shall be the date of actual payment. 5. The CIT(A) has failed to appreciate that to avoid levy of interes....

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....ing on Central Government Account (Receipts and Payments) Rules, AO came to a conclusion that there were delays in remittance of TDS amounts. Interest was levied on the assessee u/s.201(1A) of the Income-tax Act, 1961 ('the Act' in short) for the alleged delays. 03. Aggrieved assessee moved in appeals before the CIT (A). Ld. CIT (A) relying on CBDT circular No.261, held that payments through cheques would relate back to presentation of cheques, once cheques were honoured and assessee could not be held liable for delays on the part of clearing banks. Relevant finding of CIT (A) is reproduced hereunder: 6. I have considered the written submission filed by the appellant and also gone through the orders passed by the Assessi....

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....ount of Rs. 60958,372/- u/s 192B was remitted on 5.3.2010 {due date 7.3:2010) but credited on 8.3.2010, resulting in demand u/s 201(1 A) for Rs. 1219,167. It has also been stated that some payments u/s 192B, 194C, 194J and 1941 made in April-May,2009 related to FY 2008-09, and have been included in Q4 return for the FY 2008-09, and therefore should be excluded as payable in FY 2009-10 (AY 2010-11) for the purposes of Section 201(1 A). Ld. AR has also relied on the CBDT Circular No.261 dated 8.8.1979 which clarified that the date of payment would relate back to the date of presentation of cheque, if the cheque is honoured, stating that the said circular was referred in the appellant's submission dated 3.2.2011 before the Assessing Office....