2016 (8) TMI 550

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....sessee per its appeal are as under:- "1. For that the order of the Ld. CIT(A) is arbitrary, illegal and bad in law. 2. For that the order is bad in law and is barred by limitation and is therefore liable to be quashed. 3. For that the Ld. CIT(A) erred in confirming the order of the AO when, before passing the impugned order the Ld. AO did not pass any order treating the assessee as assessee in default. 4. For that the Ld. CIT(A) erred in confirming the order of the AO ignoring the date on which the tax deducted was actually paid and taking into account the amount credited to the account of the Central government as actually paid. 5. For that the Ld. CIT(A) should have kept in mind that the Bank to whom, cheques were tendered were a....

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....'d CIT(A) who confirmed the action of AO by having reliance in the order of ITAT Agra Bench dated of 08.06.2012 in the case of G.M.Mprrda, PIU v. ITO (TDS) in ITA Nos. 370-371/Agra/2011 for A.Y. 2008-09 and by observing as under:- "Following the above order of the Hon'ble ITAT, Agra Bench I hold that the Ld ACIT, (TDS), Siliguri was justified in levying interest u/s. 201(1A) of the IT Act, 1961. I further hold that levy of interest u/s. 201(1A) is mandatory if TDS has not been actually paid to the Government account by the due date of deposit as per the relevant provisions of the Act. In the present case as the assessee has not actually paid TDS by the due date of deposit due to reasons of late clearing of cheques levy of interest u/s.....

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....e was confirmed by L'd CIT(A) relying on the order of ITAT Agra Bench in the case of G.M.Mprrda, PIU (supra). From the facts of the case, we find that Central Board of Direct Taxes, in excise of powers conferred under the Income tax Act, 1961 issued Circular No.261 dated August 8, 1979 (CBDT Circular) in line with the above rules, clarifying that in case of payment of cheque/draft, if honored, the date of payment would relate back to the date of handing over of cheque/draft to the government's bankers. However thereafter Central Government Account (Receipts and Payments) Rules 1983 Rules) were framed. These rules provide that date of payment for government dues tendered in form of cheque/draft shall be the date on which it was cleared and ....

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....sidered the conflict between the Rules, Circular and the provisions of Negotiable Instruments Act, 1881. Other than upholding the binding nature of the Circular, the tribunal has observed that under the Negotiable Instruments Act, 1881 it has been held that once the cheque is encashed in ordinary course, it will discharge the drawer from payment, and thus there exists an apparent conflict between interpretation of Negotiable Instrument Act, 1881 and the Rules which have been framed by executive authorities in exercise of powers under Article 283(1) of the Constitution of India. The Tribunal has thereafter, held that in such a scenario, the law enacted by the Parliament would prevail i.e. Negotiable Instruments Act, 1881 would prevail over t....