2016 (1) TMI 618

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....ontends that ld. CIT(A) has failed to appreciate the fact on record that the assessee has given cheque no. 725829 of Andhra Bank, Jaipur of Rs. 79,31,000/- to collecting bank SBBJ, SMS Highway, Jaipur and same was debited by assessee's bank on 31-05-2008 in Govt. a/c but due to Sunday on 1-06-2008, the collecting bank SBBJ affixed seal in challan 2-06-2008. Thus payment was in time and no default was on the part of the assessee. Thus charging of interest was not justified. 2.2 During the course of appellate proceedings, the assessee submitted that such demand has been raised by the AO for late deposit of TDS amounting to Rs. 79,31,000/- alleged to be paid on 02-06-2008 instead of 31-05-2008. It is stated that while raising such deman....

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....A) ignored the CBDT circular no. 261 dated 8-8-1979, placed at PB page no. 12 instructing income tax authorities as under:- "1. In terms of rule 80 of the Compilation of the Treasury Rules, if a cheque or draft tendered in payment of Government dues and accepted under the provisions of rule 79 is honoured on presentation, the payment is deemed to have been made on the date on which it was handed over to the Government bankers. The need to indicate on the challan the date of tender of the cheque/draft with the authorised public sector bank, was duly taken notice of by the Central Board of Direct Taxes and at the request of the Board, the Reserve Bank issued instructions to all the authorised public sector banks in November 1977 stip....

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....direct taxes. Circular: No. 261 [F. No. 385/61/79-IT(B)], dated 8-8-1979." 2.4 Assessee's case clearly falls under the purview of this circular as the challan and cheque in favour of I T Department was tendered with SBBJ and debited to it's a/c. Consequently impugned interest charged u/s 201(1)/ 201(1A) is unjustified and deserves to be deleted. Further reliance is placed on Delhi ITAT judgment dated 10-09-2015 in the case of Sandip Bhagat vs. ACIT (ITA Nos. 6264, 6265 & 6266/Del/.2013) wherein it has been held as under:- "13. Thus the Hon'ble High Court of Madras has held that date of tending of cheque should be taken as the date of payment of tax if the cheque is not dishonoured. The Hon'ble High Court has also....