ICICI Bank Ltd., Lucknow V. DCIT - (TDS), Lucknow

ITA 11/LKW/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9099 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-03-2011
• Assessment Year: 2009-2010
• Appeal Filed On: 13-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B AJAJ
• Assessee Lawyers: YOGESH AGARWAL
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI H. L. KARWA, HONBLE VICE PRESIDENT AND SHRI N. K. SAINI, ACCOUNTANT MEMBER I.T.A. NO.11/LKW/11 ASSESSMENT YEAR: 2009-2010 ICICI BANK LTD., VS. DY. C. I. T. (TDS), ALIGANJ, LUCKNOW. LUCKNOW. PAN:AAACT7434N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI YOGESH AGARWAL, ADVOCATE RESPONDENT BY: SHRI P. K. BAJAJ, D. R. ORDER PER N. K. SAINI: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31/08/2010 OF CIT(A)-III, LUCKNOW RELATING TO ASSES SMENT YEAR 2009-2010. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL R ELATES TO THE CONFIRMATION OF THE LEVY OF INTEREST 201(1A) OF THE I.T. ACT, 1961 (IN SHORT, THE I.T. ACT) AMOUNTING TO ` 2,15,750/- FOR ALLEGED DELAY IN DEPOSITING THE TDS TO THE CREDIT OF THE DEPARTMENT WITHIN TIME ALL OWED. 2 2. THE FACTS RELATED TO THIS ISSUE, IN BRIEF, ARE T HAT THE DCIT (TDS), LUCKNOW ISSUED A SHOW CAUSE NOTICE U/S 201(1) AND 2 01(1A) OF THE I.T. ACT TO THE ASSESSEE BY POINTING OUT FOLLOWING SHORT DEDUCTIONS ON THE BASIS OF E-TDS RETURN FILED BY THE ASSESSEE: SHORT DEDUCTION U/S 194A ` 40,266/- SHORT DEDUCTION U/S 194J ` 4,334/- TOTAL ` 44,600/- INTEREST ON LATE PAYMENT ` 2,15,750/- TOTAL ` 2,60,350/- 2.1 IN RESPONSE TO THE SAID NOTICE THE ASSESSEE SUB MITTED THAT NO TDS WAS TO BE DEDUCTED ON THE INTEREST PAYMENT OF ` 30,880/- TO HINDUSTAN COOPERATIVE BANK. THE SAID REPLY WAS FOUND TO BE C ORRECT FOR THE REASON THAT THE PROVISIONS OF SECTION 194A ARE NOT APPLICA BLE ON INTEREST PAYMENT TO BANK ON WHICH BANKING REGULATION ACT IS APPLICAB LE. THE ASSESSEE POINTED OUT TO THE DCIT (TDS) THAT FOR THE MONTH OF JUNE, 2008, AMOUNT OF TDS DEDUCTED WAS AT ` 2,15,73,701/- WHICH WAS DEPOSITED VIDE PAY ORDER DATED 04/07/2008 TO UNION BANK OF INDIA AND WAS COL LECTED BY THE SAID BANK ON 07/07/2008 THROUGH BANKER CLEARING HOUSE TH US, THE PAYMENT WAS MADE IN TIME. THE SAID SUBMISSION OF THE ASSESSEE WAS NOT ACCEPTED BY THE DCIT (TDS) BY STATING THAT THE DATE OF DEPOSIT AS PER VOLTAS WAS 08/07/2008 SO THERE WAS A DEFAULT OF ONE DAY WHICH WAS ROUNDED TO ONE 3 MONTH AS PER RULE 119A OF THE INCOME TAX RULES. AC CORDINGLY, INTEREST ON ACCOUNT OF LATE PAYMENT WAS LEVIED AT ` 2,15,750/-. 3. THE ASSESSEE CARRIED THE MATTER TO LEARNED CIT(A ) AND REITERATED THE SUBMISSIONS MADE BEFORE THE DCIT(TDS). IT WAS FURT HER SUBMITTED THAT DUE DATE FOR THE PAYMENT OF THE TAX DEDUCTED AT SOU RCE ON THE INTEREST PAID TO THE DEPOSITORS IN THE MONTH OF JUNE, 2008 WAS 7 TH JULY 2008 AND THE ASSESSEE DEPOSITED FULL AMOUNT OF ` 2,15,73,701/- VIDE BANK PAY ORDER NO.831222 DATED 4 TH JULY 2008 IN THE ACCOUNT OF UNION BANK OF INDIA, CHANDGANJ, LUCKNOW WHICH IS ONE OF THE AUTHORIZED B ANKS FOR THE PAYMENT OF TAX AND THE AMOUNT WAS CREDITED IN ACCOUNT OF UN ION BANK OF INDIA ON 07/07/2008 THROUGH BANKERS CLEARING HOUSE SO IT WAS THE DUTY OF THE UNION BANK OF INDIA TO CREDIT THE AMOUNT OF INCOME TAX DI RECTLY ON 07/07/2008 WHICH THE SAID BANK FAILED TO DO SO, HOWEVER, THE A SSESSEE HAD DISCHARGED ITS LIABILITY WITHIN TIME, THEREFORE, THE INTEREST SHOULD NOT BE LEVIED. THE ASSESSEE ALSO FURNISHED COPY OF THE CHALLAN VIDE WH ICH PAYMENT WAS MADE ALONG WITH THE LETTER OF UNION BANK OF INDIA D ATED 10/07/2010 ADDRESSED TO THE BRANCH HEAD THAT THE ASSESSEE HAD DEPOSITED INCOME TAX OF ` 2,15,73,701/- AND THE SAME HAD BEEN REMITTED TO THE INCOME TAX DEPARTMENT ON 8 TH JULY 2010. IT WAS ALSO CONFIRMED IN THE SAID LETT ER THAT 4 THE PAYMENT WAS RECEIVED BY THE PAY ORDER NO. 83122 2 DATED 04/07/2008 AND COLLECTED THROUGH CLEARING ON 07/07/2008. 3.1 THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE, OBSERVED THAT THE CHALLAN FOR THE TDS WIT H BSR CODE NO.029137 FOR ` 2,15,73,701/- FOR THE ASSESSMENT YEAR 2008-2009 FOR THE PAYMENT MADE BY BANK BEARING TAN LKNB05007C SHOWS T HE DATE OF PAYMENT AS 8 TH JULY 2008. ACCORDING TO HIM THERE WAS A DELAY IN DEPOSITING THE TAX TO THE CREDIT OF CENTRAL GOVT., THEREFORE, THE ASSESSING OFFICER RIGHTLY CHARGED INTEREST ON THE SAME. ACCO RDINGLY, THE SAID ACTION OF THE ASSESSING OFFICER WAS CONFIRMED. NOW THE AS SESSEE IS IN APPEAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMI TTED THAT THE TAX DEDUCTED AT SOURCE WAS DEPOSITED WITHIN TIME AND AL SO COLLECTED BY THE AUTHORIZED BANK WITHIN DUE TIME AND IF THERE WAS AN Y DELAY IN CREDITING THE AMOUNT TO THE INCOME TAX DEPARTMENT, THE FAULT WAS AT THE LEVEL OF THE BANK AND NOT BY THE ASSESSEE. THEREFORE, THE LEARN ED CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER FOR LEVYING THE INTEREST OF ` 2,15,750/- U/S 201(1A) OF THE I.T. ACT. RELIANCE W AS PLACED ON 5 THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF KANGOLD (INDIA) LTD. VS. CIT [1999] 239 ITR 842. 5. IN HIS RIVAL SUBMISSIONS THE LEARNED D.R. STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN TH E PRESENT CASE IT IS AN ADMITTED FACT THAT THE ASSESSEE DEDUCTED A SUM OF ` 2,15,73,701/- AS TDS ON THE INTEREST PAID TO THE DEPOSITORS FOR THE MONT H OF JUNE 2008. THE DUE DATE FOR DEPOSITING THE TDS WAS 7 TH JULY 2008 AND THE ASSESSEE DEPOSITED THE SAID AMOUNT VIDE BANK PAY ORDER NO. 831222 DATE D 04/07/2008 IN THE ACCOUNT OF UNION BANK OF INDIA, CHANDGANJ, LUCKNOW WHICH IS AUTHORIZED FOR THE PURPOSE OF DEPOSITION OF TAX OF INCOME-TAX AUTHORITIES. THE SAID AMOUNT WAS COLLECTED FROM THE ASSESSEE THROUGH BANK ER CLEARING HOUSE ON 7 TH JULY 2008 I.E. THE DUE DATE FOR DEPOSITING THE TDS IN QUESTION. THE SAID AMOUNT ALTHOUGH WAS COLLECTED FROM THE ASSESSE E ON 07/07/2008, HOWEVER, IT WAS CREDITED TO THE CENTRAL GOVERNMENT ON 8 TH JULY 2008 INSTEAD OF 7 TH JULY 2008, THEREFORE, IT IS CLEAR THAT THERE WAS N O FAULT ON BEHALF OF THE ASSESSEE BECAUSE THE AMOUNT WAS COLLE CTED BY THE 6 AUTHORIZED BANK ON 7 TH JULY 2008 WHICH WAS THE DUE DATE FOR PAYMENT OF TDS FOR THE MONTH OF JUNE 2008. IN THE PRESENT CAS E, WHEN THE AMOUNT WAS COLLECTED FROM THE ASSESSEE IT WAS THE DUTY OF THE COLLECTING BANK TO CREDIT THE AMOUNT IN THE ACCOUNT OF THE CENTRAL GOV ERNMENT ON THE SAME DATE BUT THIS HAS NOT BEEN DONE, THEREFORE, THERE W AS MISTAKE ON THE PART OF THE UNION BANK OF INDIA, CHANDGANJ, LUCKNOW WHIC H IS AUTHORIZED FOR THE PURPOSE OF COLLECTING TAX ON BEHALF OF INCOME-T AX AUTHORITIES. SO IT CANNOT BE SAID THAT THE ASSESSEE COMMITTED ANY MIST AKE TO MAKE IT LIABLE FOR PAYMENT OF INTEREST ON ACCOUNT OF DELAYED PAYME NT. IN THE PRESENT CASE, IT IS NOTICED THAT THE CERTIFICATE ISSUED BY THE UNION BANK OF INDIA, CHANDGANJ, LUCKNOW DATED 10/02/2010 CLEARLY MENTION ED THAT THE ASSESSEE DEPOSITED INCOME-TAX AMOUNTING TO ` 2,15,73,701/- VIDE PAY ORDER NO. 831222 DATED 04/07/2008 WHICH WAS CREDITE D IN THE ACCOUNT OF THE BANK ON 07/07/2008 THROUGH BANKERS CLEARING HOU SE SO IT IS CLEAR THAT THE AMOUNT WAS COLLECTED BY THE AUTHORIZED BANK ON BEHALF OF THE INCOME- TAX AUTHORITIES ON 07/07/2008 SO THERE WAS NO DEFAU LT AS FAR AS THE ASSESSEE IS CONCERNED. IN THIS REGARD THE CBDT HAS ISSUED A CIRCULAR NO. 261 DATED 8 TH AUGUST 79 STATING THEREIN THAT IN TERMS OF RULE 80 OF THE COMPILATION OF THE TREASURY RULES, IF A CHEQUE OR D RAFT IS TENDERED IN 7 PAYMENT OF GOVERNMENT DUES AND ACCEPTED UNDER THE P ROVISIONS OF RULE 79 (IBID) IS HONOURED ON PRESENTATION THE PAYMENT IS D EEMED TO HAVE BEEN MADE ON THE DATE ON WHICH IT WAS HANDED OVER TO THE GOVERNMENT BANKERS. 6.1 THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF K ANGOLD (INDIA) LTD. VS. CIT [1999] 239 ITR 842 HAS HELD AS UNDER: THAT IT IS SETTLED LEGAL POSITION THAT IN CASE OF PAYMENT BY CHEQUE, THE PAYMENT IS DEEMED TO HAVE BEEN MADE ON THE DATE OF DELIVERY OF THE CHEQUE AND NOT ON THE DATE OF ENCASHMENT WHEN THE CHEQUE WAS HONOURED. THOUGH THE CHEQUE WAS ENCASHED ON APRIL 3, 1998, THE PAYMENT M UST BE DEEMED TO HAVE BEEN MADE ON MARCH 30, 1998, WHEN CH ALLAN DATED MARCH 30, 1998, WAS SUBMITTED BY THE PETITION ER TO THE DEPARTMENT ALONG WITH THE CHEQUE. THEREFORE, THE PA YMENT OF TAX WAS WITHIN THE PERIOD PRESCRIBED. 6.2 IN THE INSTANT CASE ALSO, THE PAY ORDER WAS HAN DED OVER BY THE ASSESSEE TO THE GOVERNMENT BANKER I.E. UNION BANK O F INDIA, CHANDGANJ, LUCKNOW ON 4 TH JULY 2008 I.E. PRIOR TO THE DUE DATE WHICH WAS 7 TH JULY 2008. THE SAID PAY ORDER WAS CREDITED IN THE ACCOUNT OF A UTHORIZED BANK AND WAS NOT DISHONOURED. THEREFORE, THE DATE OF PAYMEN T WAS DEEMED TO BE 4 TH JULY, 2008 AND NOT 8 TH JULY 2008 I.E. THE DATE ON WHICH THE AUTHORIZED BANK CREDITED THE AMOUNT IN THE ACCOUNT OF THE CENT RAL GOVERNMENT. IN THE 8 PRESENT CASE, IF THERE WAS ANY MISTAKE THAT WAS AT THE LEVEL OF THE AUTHORIZED BANK AND THE DEPARTMENT COULD HAVE RECEI VED THE INTEREST FOR ONE DAY FROM THE SAID BANK BECAUSE THE AMOUNT OUGHT TO HAVE BEEN CREDITED IN THE ACCOUNT OF THE CENTRAL GOVERNMENT O N 7 TH JULY 2008 INSTEAD OF 08/07/2008. THEREFORE, NO INTEREST WAS TO BE LE VIED ON ACCOUNT OF THE DELAYED PAYMENT BY THE ASSESSEE. IN THAT VIEW OF T HE MATTER, WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND DELETE THE INT EREST LEVIED BY THE DCIT (TDS) BY INVOKING THE PROVISIONS OF SECTION 201(1A) OF THE I.T. ACT. 7. IN THE RESULT, THE APPEAL IS ALLOWED. (THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 23/0 3/2011) SD/. SD/. ( H. L. KARWA ) (N. K. SAINI) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 23/03/2011 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR