TaxTMI 
TaxTMI 
2022 (12) TMI 73
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....d in the circumstances of the case and in law the ld. CIT (Appeals) erred in confirming the action of the AO refusing the cancel interest charged u/s 201 of the Act on the delay in deposit of TDS caused by negligence on the part of the Bank." 3. The assessee Company is a non-banking Finance Company, engaged in acceptance of inter-corporate deposits. During the Financial Year 2012-13, the assessee Company has accepted inter-corporate deposits to the tune of Rs. 363 crores upon which provision for interest was made for Rs. 31,62,69,531/- against which the TDS for Rs. 3,16,26,953/- was provided @ 10% u/s 194A of the Act. The assessee has deposited TDS amount on 31/07/2013 for Rs. 3,39,98,973/- which included an amount of Rs. 23,72,020/- on ....
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....st for 5 months starting from 01/03/2013 to 31/07/2013 against the same the TDS return was filed on 27/08/2013. The said amount has been tendered on 31/07/2013 by way of cheque by the assessee, which has not been credited by debiting the bank account of the assessee. But the amount has been debited from the account of the assessee on the very next day i.e. 01/08/2013. The Ld.CIT(A) was of the opinion that there is no provision in law which provide any leniency with regard to the working out of interest and interest u/s 201(1)/201(1A) of the Act is mandatory in nature. 9. We have heard the parties perused the material on record and gave our thoughtful consideration. The question as to 'whether the payment would be deemed to have been made....
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....thin the stipulated time period. We have deliberated at length on the issue under consideration, and find that that as per CBDT Circular No. 261 [F.No. 385/61/79-IT (B)], dated 08.08.1979, it has been clarified that the date of tendering of cheque for payment of government dues shall be deemed to be the date of payment of such taxes. We find that the aforesaid CBDT circular is applicable to all government dues, and makes no distinction whether the payment is by way of TDS, advance tax, self-assessment tax etc. The relevant extract of the aforesaid CBDT Circular No. 261, dated 08.08.1979 reads as under: "In terms of Rule 80 of the Compilation of the Treasury Rules, if a cheque or draft tendered in payment of Government dues and acce....
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....in all its wisdom had not even modified the Circular No. 261, dated 08.08.1979 which was issued prior to the "Central Government Account (Receipt and Payments) Rules, 1983". Be that as it may, the aforesaid 'benevolent circular' viz. Circular No. 261, dated 08.08.1979 issued by the CBDT on the date of tendering of the cheque by the assessee towards the amount of TDS to the government bank, did hold the ground and was thus binding on the revenue. We are unable to persuade ourselves to subscribe to the observations of the CIT(A), that as the Central Treasury Rules (Old Rules) had been rendered as redundant, therefore, the CBDT Circular No. 261, dated 08.08.1979 would therein follow and also has to be taken as having been rendered as o....
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....) Central Government Account (Receipts & Payments) Rules, 1983; and (iii) the judgment of the Hon'ble Supreme Court in the case of K. Kaplana Saraswathi (supra). Still further, the ITAT, Bangalore in ITO v. Bradcom Communication Technologies (P) Ltd. [ITA No. 895 & 900/2014] had observed that where the assessee had made the payment before the 'due date', it was thereafter beyond its control to ensure the transmission of the amount to the government account within the stipulated 'due date'. On the basis of the aforesaid observations, it was held by the Tribunal that the assessee could not be faulted for delay on the part of the bank or the clearing house, whatever may be the rules governing receipts and payments into the ....
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....t the assessee was to be treated as being in default for delay in deposit of the amount of TDS, thus set aside the order of the CIT(A) and delete the interest of Rs. 37,510/-levied by the A.O under Sec. 201(1A) of the Act. 9. The appeal of the assessee is allowed. Upon perusal, we find that it was held by the bench that Circular No. 261, dated 08/08/1979 issued by the CBDT, unless withdrawn or amended, would hold the ground and would be binding on the revenue. Further, the payment would be deemed to have been made on the date the cheque was handed over to the banker and the date of payment was to be taken as the date of presentation of the cheques by the assessee. It also supports the proposition that the payment would rel....