TaxTMI 
TaxTMI 
2013 (4) TMI 964
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....hat TDS was deposited in time, but the Revenue has not appreciated the explanations furnished by the assessee. For the sake of reference, we extract below the grounds of appeal in ITA No. 661/LKW/2011:- 1. Because the assessment order dated 16.08.2010 under challenged is against the fact and law. 2. Because, levy of interest for default u/s 201 (1-A) of Income Tax Act 1961 was wrong and that too without any valid reason. 3. Because interest is wrongly calculated for full month not for part of month as per the provision of clause-B of Rule-119-A of the Income Tax Rules, 1962. 4. Because, the Id. assessing officer below did not appreciate the evidence filed on record. 5. Because reply filed in resp....
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....of deposition of the tax, whereas the Assessing Officer has noted that the date in the challan appears as 10.10.2007 which is the date of deposit and can only be presumed to be the date on which it was cleared and entered in the receipt. Following Rule 20 (i) of Receipts and Payments Rule, the date of payment of TDS was taken to be 10.10.2007. the Assessing Officer accordingly levied interest on the delayed payment, against which an appeal was filed before the ld. CIT(A) and placed reliance upon certain case laws which were distinguished by the ld. CIT(A) and the ld. CIT(A) placed heavy reliance upon the Receipt and Payment Rule applicable w.e.f. 1.6.1983 and has come to a conclusion that the date of payment can only be 10.10.2007. Therefor....
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....s Development Corporation Ltd. [1996] 219 ITR 324/88 Taxman 1 (Gauhati) and CIT v. Prem Nath Motors (P.) Ltd. [2002] 120 Taxman 584 (Delhi) that section 201(1A) makes the payment of simple interest mandatory. The payment of interest under that provision is not a penal provision. There is therefore no question of waiver of such interest on the basis that the default was not intentional or on any other basis. It is further held in CIT v. Majestic Hotel Ltd. [2006] 155 Taxman 447 (Delhi) / CIT v. Munni Lal & Co. [2006] 157 Taxman 466 (Raj.) that the question whether the assessee had any bona fide belief or reasonable cause for not making the deduction at source is wholly irrelevant to the question whether it is in default within the meaning of....
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....e or draft is tendered in payment of Government dues and accepted under the provisions of rule 79 (ibid) 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. However, the issue has been discussed in the decision of the Authority for Advance Rulings in Y Ltd., In re [1996] 87 TAXMAN 59/221 ITR 172 (AAR, NEW DELHI) as well wherein relying on Rule 19(1)(c) and Rule 20(i) of the Receipts and Payments Rule, it has been held that the date of clearing and entering in the receipt scrolls is the date of payment to the Government account as Receipts and Payments Rules (and not Central Treasury Rules) are applicable w.e.f. 01.06.1983. The relevant finding is reprodu....
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.... Dues, etc.- (1)(c) In the case of Government dues which are payable by a certain fixed date, the person desiring to make payments by means of cheque or bank draft must take suitable precaution to ensure that his cheque or draft reaches the bank or the departmental office concerned in good time, keeping in view the provisions of Rule 20 (i) and (ii). The bank, and or departmental office may at its discretion, refuse to accept- (i) cheques or drafts tendered on the last day to the former and on the last two working days to the latter respectively; and, or (ii) cheques or drafts which require clearance at the inter-bank clearing house before credit can be afforded to Government Account, if and when work of such clea....