TaxTMI 
TaxTMI 
2025 (9) TMI 241
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....ransactions pertinent to the TDS payment were inadvertently missed out by bank consequent to the acute staff shortage. Based on the Humanitarian grounds and the adversities that each one of us had to undergo at a personal level during the peak of the pandemic era, we wish to humbly request your good self to waive off the interest arising consequent to the delay in the TDS payment not due to assessee's default. So, interest levied of Rs. 23,46,390 on late deposit of TDS during COVID period must be deleted due to this reasonable cause and refund the TDS amount as it was paid out of general public welfare fund. 2.1 Apropos of the solitary ground of the assessee, it is noticed that the ld.Addl./JCIT(A) has confirmed the order of the AO as the assessee did not submit any explanation or supporting evidence to prove its grounds even though it was provided sufficient opportunities. The narration of observation made by the ld.Addl./JCIT(A) is as under:- ''6.3 The appellant, despite in the knowledge of receipt of hearing notices, seems to have chose not file any submissions, implying casual nature on part of the appellant. In view of the above, it is clear that the appellant has ....
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....ore non-liable for levy of interest u/201(1A) of the ACT 6.6.2. Even after providing sufficient opportunities during appeal proceedings, the appellant has not submitted any explanation or supporting evidences to prove its grounds. Hence, there is no need to interfere with the intimation of the CPC made u/s 143(1) of the Act and thus, order of the AO is hereby confirmed and the grounds raised by the appellant are dismissed. 7. As a result, the appeal is dismissed on account of non-prosecution and on merits.'' 2.2 In the course of hearing, the ld.AR of the assessee has prayed that the assessee got affected during the COVID period and interest levied i.e. of Rs. 23,46,390/- due to late deposit of TDS during Covid period deserve to be deleted due to said reasonable cause and TDS amount be refunded as it was paid out of general welfare fund. The written submissions put forth by the ld.AR of the assessee before the Bench is read as under:- ''Ground No. 1 The order of the CIT Appeals is ex parte and without hearing the assessee. The assessee could not respond to the notices of the CIT Appeals due to old email id. The CPC TDS cell raised a demand on i....
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....relationship with Kotak Mahindra Bank, which, however, was not an authorized bank for direct payment of TDS payments on to the Government of India. Accordingly, in order to comply with the statutory requirements, the Kotak Mahindra Bank arranged to deposit the TDS through IDBI Bank, which was an authorized bank for this purpose. The necessary TDS payment cheques were duly issued and handed over to the Kotak Mahindra Bank branch within the prescribed time. However, due to the unprecedented disruption caused by the COVID-19 pandemic, including severe staff shortages and operational constraints at the bank branch due to infections and lockdowns, there was an inadvertent delay in sending such cheques to IDBI bank for further processing and remitting the payment to the Central Government account as per copy enclosed vide PB No. 39-41 of receipt of TDS challan payment. It is pertinent to note that the assessee had discharged its duty promptly by preparing the challans and tendering the cheques to the bank well within time. The delay was entirely beyond the control of the assessee and occurred solely due to operational lapses on the bank's side. In recognition of this, the bank has also i....
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....of interest under section 201(1A) of the Income-tax Act, it is respectfully submitted that the Central Board of Direct Taxes (CBDT), vide Circular No. 11/2017 dated 24th March 2017, issued under section 119(2)(a) of the Act, has laid down guidelines enclosed vide PB No 44. permitting waiver or reduction of interest state that: "Guidelines for waiver of interest charged under section 201(1A) (i) of the Income-tax Act, 1961.In exercise of the powers conferred under clause (a) of sub-section (2) of section 119 of Income-tax Act, 1961 (the Act)Central Board of Direct Taxes (the Board), hereby directs that the Chief Commissioner of Income-tax and Director General of Income-tax may reduce or waive interest charged under section 201(1A) (i) of the Act in the classes of cases specified in paragraph 2 of this Order for the period and to the extent the Chief Commissioner of Income-tax/ Director General of Income-tax may deem fit. However, no reduction or waiver of such interest shall be ordered unless the principal demand under sections 200A, 201(1) or 234E, as the case may be, stands fully paid or satisfactory arrangements for payment of the principal demand under these sections have been m....
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....bmit that there is a reasonable cause in not depositing the tax deducted in which event interest cannot be charged. The Ld. CIT (A), agreed with the contention of the assessee and observed that in the assessee's own case, the Hon'ble ITAT, Delhi Benches exonerated the assessee from the rigour of provisions of section 201(1A) of the Act since, the assessee has deposited the amount in a separate bank account as directed by the competent jurisdictional High Court. Ld. CIT (A) also followed the decision of the Hon'ble Supreme Court in the case of ONGC and Others (SC) 354 ITR 156, wherein the Court observed that the assessee, who has scrupulously followed the decision of the Hon'ble jurisdictional High Court, cannot be said to be in default in making deposit of the Tax Deducted at Source in which event interest cannot be charged u/s 201 of the Act. He accordingly deleted the interest charged by the AO." Our case is also identical to the above case in terms of the existence of a reasonable cause for the delay in payment of TDS. The assessee is a government-controlled Association of Persons (AOP), primarily dependent on funds received from both the State ....
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....it the TDS with Central Government on the ground of financial difficulties." In our case, the assessee was also facing financial constraints due to the unprecedented global COVID-19 pandemic. The default in payment of TDS was not intentional or wilful but occurred due to genuine financial hardship and paucity of funds. The assessee is a government-controlled Association of Persons (AOP), primarily dependent on funds received from both the State Government and the Central Government. The assessee has to pau to the Insurance company for the health premium of the Rajasthan Public under Mukhyamantri Ayushmaan Arogya Yojana to the card holders. During the pandemic, there were severe disruptions in administrative functioning, including delays in the issuance of fund sanction orders by the competent authorities. These delays were beyond the control of the assessee and materially impacted its ability to discharge statutory obligations within the prescribed timelines. In light of the above, it is submitted that there existed a reasonable cause for the delay in TDS payment. Therefore, the levy of interest under section 201(1A) may kindly be considered for deletion or waiver on these....