Income Tax Appellate Tribunal - Panji
Ajmer Vidhyut Vitran Nigam Ltd., Ajmer vs Dcit, Jaipur on 3 August, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 494/JP/16
fu/kZkj.k o"kZ@Assessment Year : 2010-11
Ajmer Vidyut Vitran Nigam Ltd., cuke The DCIT(TDS), CPC,
AO (CPC) Panscheel Ajmer. Vs. Ghaziabad.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN No.: AACCA8562E
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrhdh vksj ls@Assessee by : Shri Sunil Porwal
jktLo dh vksj ls@Revenue by : Shri Verinder Mehta and
Shri R.A.Verma (Addl.CIT)
lquokbZ dh rkjh[k@Date of Hearing : 01/08/2017
?kks"k.kk dh rkjh[k@Date of Pronouncement: 03/08/2017.
vkns'k@ORDER
PER SHRI VIKRAM SINGH YADAV, A.M.
This is an appeal filed by the assessee against the order of Ld. CIT(A), Ajmer dated 29.02.2016 for A.Y. 2010-11 wherein the assessee has taken following grounds of appeal are as under:-
"1. That the learned CIT(Appeals) Ajmer erred in dismissing our Appeal by maintaining the interest u/s 201(1A) of the I.T. Act 1961 without appreciating full facts and circumstances of the case.
2. That the learned CIT(Appeals) Ajmer erred on the facts that the assessee has deposit the TDS on 08/08/2009 next working day. The due date was 07/08/2009, the delay was due to strike of the bank on 06/08/2009 and 07/08/2009. As per the section 10 of general Clause Act, 1897 the next working day should be treated as due date. The ITA No. 494/JP/16 Ajmer Vidyut Vitran Nigam Vs. DCIT(TDS)CPC Board also has issued circular no 676 dt 14/01/1994 and 639 dated 13/11/1992 which is binding on department.
3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in directing the AO to verify the rate of interest chargeable U/s 201(1A) of IT Act 1961 instead of dealing with the matter itself."
2. Briefly the facts of the case are that an intimation u/s 154 of the IT Act was received by the assessee from DCIT-CPC TDS in respect of TDS Return (Form 26Q) filed for the 2nd quarter of F.Y. 2009-10, determining interest liability of Rs. 1,33,614/- on account of late payment of TDS. On pursing the intimation & the default statement, it was further observed that TDS of Rs. 66,92,054/- was deposited by the assessee on 08.08.2009 in place of due date which was 07.08.2009 and interest liability has been determined on late payment of TDS u/s 201(1A) @ 1.5%. Being aggrieved, the assessee carried the matter in appeal who has confirmed the interest demand.
3. The relevant findings of the ld. CIT(A) which are under challenge before us are reproduced as under:-
"4.0 I have gone through the statement of facts filed by the appellant carefully. The appellant has contended that he could not deposit the fact on 07.08.2009 (which was the due date), as there was a strike of the bank on 07.08.2009, therefore, the delay in depositing the TDS may be condoned. In support of his argument, the appellant has relied on the Circular no. 639 dated 13.11.1992. I have gone through circular carefully. This circular has been issued in respect of filing of return of income and it does not cover the payment of tax. Under the Act, there is no provision to condone the delay in depositing the TDS. The charging of interest u/s 201(1)(a) is mandatory. Therefore, the contention of the appellant that the delay in deposit of TDS may be condoned is not acceptable.
2 ITA No. 494/JP/16Ajmer Vidyut Vitran Nigam Vs. DCIT(TDS)CPC As far as the other argument of the appellant that the period of delay is one month only and not two month and rate of interest applicable for the A.Y. 2010-11 was 1% whereas the interest has been charged by the DCIT CPC @ 1.5% are concerned, the assessee has not furnished any evidence to substantiate the facts narrated by him. Therefore, the AO is directed to verify the contention of the appellant regarding the period of delay and rate of interest from the record and rectify the mistake, if any, after verification of the record."
4. During the course of hearing, the ld. AR submitted that the demand has been raised on account of interest on deposit of TDS for Rs. 66,92,054/- on 08.08.2009 as against due date of 07.08.2009. There was bank strike on 06.08.2009 and 07.08.2009 and due to Bank strike, no transactions either of deposit or withdrawals could have been made. The CIT(Appeals) has not allowed the appeal because of mandatory provision for charging interest u/s 201(1)(a) and no provisions for condone the delay in payment even due to reasonable cause of bank Strike and hence not accepted our request to delete our day late deposit interest Rs. 1,33,614/-.
5. In support, reliance was placed on decision reported in 157ITD 415 in the case of Damodar Valley Corporation V/s ACIT wherein it was held as under:
"VSDl tek djokus dh vfUre frfFk dks jfookj gkus ikj vxys dk;Z fnol dks tek djok;k x;k VSDl dh igyh fd'r tek djokus dh ns; frfFk 15-06-2008 FkhA bl fnu jfookj Fkk] ,sls esa dEiuh }kjk 16-06-2008 dks ,Mokal VSDl dh igyh fd'r tek djokbZ xbZA tc bl fjVuZ dk QSlyk bUde VSDl foHkkx }kjk fd;k x;k rks ,Mokal VSDl nsjh ls tek djokus ckcr /kkjk 234 lh ds rgr rhu ekg dk C;kt yxk fn;k x;kA dEiuh dk dguk Fkk fd mlds }kjk ,Mokal VSDl dh fd'r Hkjus esa nsjh ugha dh xbZ- cfYd 15-06-2008 dks jfookj gksus ds dkj.k cSd a can FksA ,sls esa dEiuh 15-06- 2008 dks ,Mokal VSDl dh fd'r tek ugha djok ik;sA 3 ITA No. 494/JP/16 Ajmer Vidyut Vitran Nigam Vs. DCIT(TDS)CPC ;g ekeyk ekuuh; fVz~C;wuy rd igqp a kA ekuuh; fVz~C;wuy ds le{k ;g rdZ fn;k x;k fd General Clauses Act dh /kkjk 10 ;g dgrh gS fd fdlh dk;Z dks djus dh vfUre frfFk dks ;fn jktdh; vodk'k gS rks mlds ckn tks vxyk dk;Z fnol gksxk ,oa mls dk;Z dks djus dh vfUre frfFk ekuh tk,xhA Ekuuh; fVz~C;wuy us bl rdZ dks Lohdkj djrs gq, dEiuh ds i{k esa fu.kZ; nsrs gq, fy[kk fd" if the last day for payment of any installments of advance tax is a day on which the receiving bank is closed, the assessee can make payment on the next immediately following working day, and in such cases, the mandatory interest leviable under 234B and 234C of the Income Tax Act, 1961 would not be charged. Following the aforesaid Circular No. 676, dated 14.01.1994 and section 10 of General Clauses Act, it was concluded that assessee has not committed any default in payment of first installment of advance tax."
It was submitted that in our case, the bank was closed due to strike on 06.08.2009 and 07.08.2009 both days was also equal to holiday because of no working due to not attending the staff due to strike and we have deposited the sums on next working day i.e. 08.08.2009 as admitted by both the lower authorities and hence the deposit date should be considered as deposited in time limit and no interest should have been charged by considering delay in deposit. The case is fully covered by our case.
That there is also a case decided by Allahabad High Court in (2014) 304 ELT 652 (All.) in the case of Qurtzone shoe Component (India) Pvt.) Ltd. V/s Union of India-Held- "vkf[kjh rkjh[k NqV~Vh gksus ij vxyk dk;Z fnol ekuk tk;sxk"
6. In support, reliance was also placed on CBDT circular no. 676 dated 14.01.1994 wherein it has clarified as under:-
"That if the last day for payment of any installment of advance tax is a day on which the receiving bank is closed the assessee can make the payment as the next immediately following working day, and in such cases, the mandatory 4 ITA No. 494/JP/16 Ajmer Vidyut Vitran Nigam Vs. DCIT(TDS)CPC interest leviable u/s 234B and 234C income tax Act, 1961 would not be charged."
As the above circular is beneficial in the public interest the same should be followed by all Courts as decided by Supreme Court in the case of M/s Suchitra components ltd. V/s Commissioner of Central Excise (2009) 20 VST 726(SC) (2008) 13 VST 151(SC).
Even without prejudice to above the beneficial CBDT circular &/or instruments are always binding on all subordinates &/or offices of Income Tax Deptt.
In view of any circular as well as sec. 10 of General Clauses Act, there is no any default committed by us in payment of TDS in time. The delay of one day is only on account of Bank holiday as admitted in Bank certificate produced before Appellate Authority and there is no delay on our part. In such cases mandatory interest leviable would not be charged as per this circular also.
7. The ld. DR vehemently argued the matter and supported the order of the lower authorities. He submitted that there is no provision for condonation of delay and interest u/s 201(IA) is mandatory in nature
8. Clause 10 of the General Clauses Act reads as under:-
"(1) Where, by any (Central Act) or regulation made after the commencement of this Act, any act or proceeding is directed to allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or that day or the last day of the prescribed period, the Act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open.
Provided that nothing is this section shall apply to any act or proceeding to which the (Indian Limitation Act, 1877(15 of 1877), applies.
5 ITA No. 494/JP/16Ajmer Vidyut Vitran Nigam Vs. DCIT(TDS)CPC This section applies also to all (Central Acts) and Regulations made on or after the fourteenth day of January 1887."
9. CBDT circular no. 676 dated 14.01.1994 reads as under:-
"1. Representations have been received by the Board seeking waiver of interest chargeable under sections 234B and 234C of the Income-tax Act, 1961 for default in payment of instalments of advance tax by the due dates which are prescribed under section 211 of the Income-tax Act. In cases where the last date for making payment of such instalments ( i.e. 15th September, 15th December and 15th March) happens to be a holiday and the assessee pays the due amount of advance tax on the next working day.
2. The matter has been carefully considered by the Board and it is felt that in such cases section 10 of the General Clauses Act, 1897 will be applicable. This section lays down that where any Act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office (in the present case the bank which is authorised to receive payment of advance tax from the assessee) is closed on that day or on the last day of the prescribed period, the Act or proceeding shall be considered as done or taken in due time after it is done or taken on the next day, afterwards, on which the Court or office ( or the bank) is open. In view of this provision, it is hereby clarified that if the last day for payment of any instalments of advance tax is a day on which the receiving bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the mandatory interest leviable under sections 234B and 234C of the Income-tax Act, 1961 would not be charged."
10. We have heard the rival contentions and perused the material available on record. It is not in dispute that the taxes deducted have been deposited with a delay of one day. It is also not in dispute that on the due date of deposit i.e, 7.8.2009, there was bank strike and an effective bank holiday and 6 ITA No. 494/JP/16 Ajmer Vidyut Vitran Nigam Vs. DCIT(TDS)CPC no taxes could have been deposited on the said date. The CBDT has received similar representation in context of deposit of advance tax when the last date of deposit of installment of advance tax happens to be a holiday and taking into consideration the provisions of section 10 of the General Clauses Act, has clarified vide its circular no. 676 dated 14.1.1994 that "if the last day for payment of any installment of advance tax is a day on which the receiving bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the mandatory interest leviable u/s 234B and 234C income tax Act, 1961 would not be charged." In the instant case, the bank was closed on 7.8.2009 on account of bank strike and the taxes have been deposited on 8.8.2009. In our view, circular no. 676 dated 14.1.1994 draws support from section 10 of the General Clauses Act and is equally applicable to deposit of TDS where on the due date of deposit, the bank is closed and the taxes are deposited on the next working day. We are cognisance of the fact that the period under consideration relates to period where internet banking and e-deposit of taxes were not in vogue. In light of above, there is no default on the part of the assessee and interest u/s 201(1)(a) is not leviable in the instant case. The grounds are thus allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 03/08/2017.
Sd/- Sd/-
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(Kul Bharat) (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Jaipur
Dated:- 03/08/2017
Santosh
vkns'k dh izfrfyfi vxzsf"kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Ajmer Vidyut Vitran Nigam Ltd., AO (CPC) Panscheel Ajmer.7 ITA No. 494/JP/16
Ajmer Vidyut Vitran Nigam Vs. DCIT(TDS)CPC
2. izR;FkhZ@The Respondent- DCIT(TDS), CPC, Ghaziabad.
3. vk;dj vk;qDr@CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT,
6. xkMZ QkbZy@Guard File (ITA No.494/JP/2016) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar.
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