MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY, MUMBAI V. DCIT (TDS) 2(3), MUMBAI

ITA 1944/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9206 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MUMBAI METRO; SUMAN KUMAR LD DR ITA NO
• Assessee Lawyers: DEVENDRA JAIN LD
• Keywords: Maximum Marginal Rate
• Section: 154

Judgement Text

ITA NO. 1944 & 1840/M/2015 MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY ASSESSMENT YEAR-2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.1944 /MUM/2015 ( / ASSESSMENT YEAR: 2010-11) MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY PLOT NO.C-14 &15 MMRDA BUILDING, BKC BANDRA (E) MUMBAI - 400 051 / VS. DE PUTY COMMISSIONER OF INCOME TAX-CPC (TDS) MUMBAI ( ! /APPELLANT ) : ( '# ! / RESPONDENT ) & ./I.T.A. NO.1840 /MUM/2015 ( / ASSESSMENT YEAR: 2010-11) ACIT (TDS) - 1(3) ROOM NO.703, 7 TH FLOOR SMT. K.G.MITTAL AYURVEDIC HOSPITAL BDG. CHARNI ROAD MUMBAI 400 002 / VS. MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY PLOT NO.C-14 &15 MMRDA BUILDING, BKC BANDRA (E), MUMBAI -400 051 $ ./ ./PAN/GIR NO. AAATM-7106-R ( ! /APPELLANT ) : ( '# ! / RESPONDENT ) A SSESSEE BY : DEVENDRA JAIN,LD. AR RE VENUE BY : SUMAN KUMAR, LD. DR ITA NO. 1944 & 1840/M/2015 MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY ASSESSMENT YEAR-2010-11 2 / DATE OF HEARING : 15/09/2017 / DATE OF PRONOUNCEMENT : 04 /10/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THESE ARE CROSS APPEALS FOR ASSESSMENT YEAR [AY ] 2010-11 ARISING OUT OF ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-59 [CIT(A)], MUMBAI DATED 06/01/2015. THE ONLY ISSUE I NVOLVED IN THE APPEAL IS QUANTUM OF INTEREST U/S 201(1A) ON ACCOUN T OF LATE DEPOSIT OF TDS BY THE ASSESSEE. THE REGISTRY HAS NOTED THAT TH E APPEAL OF THE REVENUE HAS BEEN FILED WITH A DELAY OF 23 DAYS. HOW EVER, LD. DEPARTMENTAL REPRESENTATIVE [DR] HAS DRAWN OUR ATTE NTION TO THE FACT THAT THE DATE OF COMMUNICATION OF IMPUGNED ORDER WA S WRONGLY WRITTEN IN FORM 36 AND THE APPEAL WAS WITHIN TIME CONSIDERING THE CORRECT DATE. THE LD. AR RAISED NO OBJECTION AGAINST THE SAME. TH EREFORE, FINDING THE SAME IN ORDER, WE PROCEED FURTHER TO DECIDE THE SAM E ON MERITS. 2. BRIEFLY STATED, THE ASSESSEE TRUST, HOLDIN G TAN- MUMM16747D FILED TDS RETURN FOR QUARTER-1 OF THE IMPUGNED AY W HICH WAS PROCESSED BY TDS CPC VIDE COMMUNICATION REFERENCE NO. TDS/0910/26Q/D/100004861194 DATED 26/12/2013 AND ACCORDINGLY, INTIMATION U/S 154 WAS SENT TO THE ASSESSEE, RAISIN G A DEMAND OF RS.45,24,980/- WHICH INCLUDED AN AMOUNT OF RS.33,50 ,041/- UNDER SL. ITA NO. 1944 & 1840/M/2015 MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY ASSESSMENT YEAR-2010-11 3 NO. 3(C)-ADDITIONAL LATE PAYMENT INTEREST AGAINST T HE PROCESSING OF LATEST CORRECTION. THIS AMOUNT OF INTEREST HAS BEEN REDUCED TO RS.33,3 8,668/- SINCE THE ASSESSEE FILED CORRECTION STATEMENT ON 28 /10/2014 VIDE ACKNOWLEDGEMENT NO. 148069600015455 WHERE THE AGGRE GATE DEMAND HAS BEEN REDUCED TO RS.37,39,300/-. THIS ADDITIONAL INTEREST REPRESENT INTEREST U/S 201(1A) FOR LATE PAYMENT OF TDS AND TH E SAME IS THE SUBJECT MATTER OF THIS APPEAL. 3. AGGRIEVED BY IMPOSITION OF INTEREST, THE ASSESSE E CONTESTED THE SAME WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IM PUGNED ORDER DATED 06/01/2015. IT WAS CONTENDED THAT AS PER JUSTIFICAT ION REPORT RECEIVED BY THE ASSESSEE, INTEREST FOR 2 MONTHS HAVE BEEN CHARG ED AS AGAINST DELAY OF MERE ONE DAY AND HENCE, THE SAME WAS NOT JUSTIFI ED. THE LD.CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESSEE BY MAKING FO LLOWING OBSERVATIONS:- 5. I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBM ISSION OF THE APPELLANT. THE APPELLANTS AR HAS STATED THAT ENTIRE DEMAND IS DUE TO INCORREC T COMPUTATION OF INTEREST BY THE SYSTEM U/S. 201(1A). FROM THE DETAILS FILED IT IS OBSERVED THAT TAX PAYMENTS WAS DUE ON 07.07.2009 AND IT HAS BEEN PAID ON 08.07.2009. THUS, THERE IS ONLY ONE DAY DELAY IN PAYMENT OF TAXES. AS PER PROVISIONS OF SECTION 201(1A) INTEREST IS TO BE CHARGED FOR ONLY ONE MONTH WHEREAS SYSTEM HAS COMPUTED IT FOR THREE MONTHS. THE AO IS DIRECTED TO COMPUTE THE INTEREST FOR ONE MONTH. ISSUE REVISED DN AND CHALLANS. GROUND IS ALLOWED IN PART. AGGRIEVED, THE ASSESSEE AS WELL AS REVENUE IS IN AP PEAL BEFORE US. THE ASSESSEE IS AGGRIEVED BY IMPOSITION OF INTEREST FOR ONE MONTH WHEREAS REVENUE IS AGGRIEVED BY RELIEF PROVIDED TO THE ASSE SSEE BY LD. CIT(A). 4. THE LD. REPRESENTATIVE FOR ASSESSEE [AR] WHILE D RAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN THE PAPER BOOK, EXPLAINED THAT THE DUE DATE FOR DEPOSIT OF TDS WAS 07/07/2009 AND THE ASSESSEE DEPOSITED FOUR CHEQUES ALL DATED 06/07/2009 VIDE PA Y-IN-SLIP DATED 07/07/2009. HOWEVER, THE AMOUNT WAS DEBITED FROM TH E ACCOUNT OF THE ITA NO. 1944 & 1840/M/2015 MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY ASSESSMENT YEAR-2010-11 4 ASSESSEE ON 08/07/2009 AND HENCE THE CHALLANS WERE GENERATED ON THE SAID DATE. NEVERTHELESS, THE DEEMED DATE OF PAYMENT WAS 07/07/2009 WHEN THE CHEQUES WERE DEPOSITED BY THE ASSESSEE WIT H THE BANK AND THEREFORE, THE IMPOSITION OF INTEREST WAS NOT JUSTI FIED. RELIANCE HAS BEEN PLACED ON SEVERAL JUDICIAL PRONOUNCEMENTS. THE BANK ERS CERTIFICATE TO SUPPORT THE SAID CONTENTION HAS BEEN PLACED ON RECO RD. PER CONTRA, LD. DR DREW OUR ATTENTION TO THE STATUTORY PROVISIONS A ND CONTENDED THAT ACTUAL DATE OF PAYMENT WAS 08/07/2009 SINCE CHALLAN S WAS GENERATED ON THAT DATE AND THE SYSTEM HAS RIGHTLY COMPUTED IN TEREST FOR TWO MONTHS SINCE THE DEFAULT PERIOD IS TO BE COUNTED FR OM THE DATE OF DEDUCTION AND PART OF MONTH HAS TO BE ROUNDED OFF T O ONE MONTH. 5. HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. FROM THE PERUSAL OF RECORD, FIRST OF ALL, I T IS NOTED THAT THE CORRESPONDING PAYMENT AGAINST WHICH TDS WAS DEPOSIT ED PERTAINED TO THE MONTH OF JUNE, 2009 ONLY AND THE DUE DATE FOR D EPOSIT OF TDS AGAINST THE SAME WAS 07/07/2009. THE PERUSAL OF JUS TIFICATION REPORT REVEALS THAT INTEREST HAS BEEN CHARGED FOR TWO MONT HS I.E. JUNE & JULY, 2009 SINCE DATE OF PAYMENT PERTAINED TO THE MONTH O F JUNE, 2009 AND CHALLANS WERE GENERATED ON 08/07/2009 I.E. BEYOND D UE DATE AND ACCORDINGLY, SYSTEM HAS TAKEN PART OF JUNE AND JULY , 2009 AS FULL MONTH AND COMPUTED THE INTEREST. THEREFORE, THE LD. CIT(A ) ERRED IN NOTING THAT THE SYSTEM HAS CHARGED INTEREST FOR THREE MONTHS. 6. PROCEEDING FURTHER, ASSESSEE HAS DEPOSITED 4 CHE QUES TOWARDS DEPOSIT OF TDS I.E. CHEQUE NOS. 812011, 812012, 812013 & 812025 WHICH ARE ALL DATED 06/07/2009 AND THE SAME CHEQUES ARE REFLECTED IN THE JUSTIFICATION REPORT. ALL THESE CHEQUES ARE DEP OSITED VIDE SEPARATE ITA NO. 1944 & 1840/M/2015 MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY ASSESSMENT YEAR-2010-11 5 PAY-IN-SLIPS WHICH ARE ALL DATED 07/07/2009, HOWEVE R, THE SAME DO NOT BEAR ANY STAMP FROM THE BANK. IN SUPPORT, THE ASSES SEE HAS FURNISHED ONE CERTIFICATE NO.AP-7/I TAX/MMRDA/2016-17 DATED 1 8/11/2016 FROM HIS BANKER BANK OF MAHARASHTRA WHICH STATES THAT THE SAID CHEQUES WERE RECEIVED BY THE BANK ON 07/07/2009 LATE AND THE SAME COULD NOT BE PUNCHED IN TAX SOFTWARE AND ACCORDINGLY, THE SAME W AS DEBITED TO THE ACCOUNT ON 08/07/2009 & TAX RECEIPT WERE GENERATED BY THE SYSTEM BEARING DATE 08/07/2009. 7. WITH A VIEW TO SETTLE THE CONTROVERSY REGARDING DEEMED DATE OF PAYMENT, WE ARE INCLINED TO REPRODUCE THE RELEVANT EXTRACT FROM THE JUDGMENT OF HONBLE APEX COURT RENDERED IN DIT(E) VS. RAUNAQ EDUCATION FOUNDATION [350 ITR 420] WHICH IN TURN, RELIES UPON THE JUDGMENT OF THE SAME COURT RENDERED IN CIT VS. OGALE GLASS WORKS LTD. [25 ITR 529]:- 14) THE SUBMISSION MADE ON BEHALF OF THE RESPONDENT -ASSESSEE IS SUPPORTED BY THIS COURT IN THE CASE OF M/S OGALE GLASS WORKS LTD. (SUPRA). RELYING UPON OTHER AUTHORITIES, THIS COURT OBSERVED AS UNDER IN THE AFORESAID CASE : WHEN IT IS SAID THAT A PAYMENT BY NEGOTIABLE INST RUMENT IS A CONDITIONAL PAYMENT WHAT IS MEANT IS THAT SUCH PAYMENT IS SUBJECT TO A CONDITIO N SUBSEQUENT THAT IF THE NEGOTIABLE INSTRUMENT IS DISHONOURED ON PRESENTATION THE CREDI TOR MAY CONSIDER IT AS WASTE PAPER AND RESORT TO HIS ORIGINAL DEMAND : STEDMAN V. GOOCH (1 793) 1 ESP.5. IT IS SAID IN BENJAMIN ON SALE, 8TH EDITION, PAGE 788 :- THE PAYMENT TAKES EFFECT FROM THE DELIVERY OF THE BILL, BUT IS DEFEATED BY THE HAPPENING OF THE CONDITION, I.E., NON-PAYMENT AT MATURITY. IN BYLES ON BILLS, 20TH EDITION, PAGE 23, THE POSIT ION IS SUMMARISED PITHILY AS FOLLOWS : A CHEQUE, UNLESS DISHONOURED, IS PAYMENT. TO THE SAME EFFECT ARE THE PASSAGES TO BE FOUND IN HART ON BANKING, 4TH EDITION, VOLUME I, PAGE 342. IN FELIX HADLEY & CO. V. HADLEY (L.R. (18 98) 2 CH.D.680, BYRNE J. EXPRESSED THE SAME IDEA IN THE FOLLOWING PASSAGE IN HIS JUDGMENT AT PAGE 682 : IN THIS CASE I THINK WHAT TOOK PLACE AMOUNTED TO A CONDITIONAL PAYMENT OF THE DEBT; THE CONDITION BEING THAT THE CHEQUE OR BILL SHOULD BE D ULY MET OR HONOURED AT THE PROPER DATE. IF THAT BE THE TRUE VIEW, THEN I THINK THE POSITION IS EXACTLY AS IF AN AGREEMENT HAD BEEN EXPRESSLY MADE THAT THE BILL OR CHEQUE SHOULD OPERA TE AS PAYMENT UNLESS DEFEATED BY DISHONOUR OR BY NOT BEING MET; AND I THINK THAT THA T AGREEMENT IS IMPLIED FROM GIVING AND TAKING THE CHEQUES AND BILLS IN QUESTION. THE FOLLOWING OBSERVATIONS OF LORD MAUGHAM IN RHOKA NA CORPORATION V. INLAND REVEUE COMMISSIONERS (L.R. [1938] AC 380 AT P.399) ARE ALS O APPOSITE: ITA NO. 1944 & 1840/M/2015 MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY ASSESSMENT YEAR-2010-11 6 APART FROM THE EXPRESS TERMS OF SECTION 33, SUB-SE CTION 1, A SIMILAR CONCLUSION MIGHT BE FOUNDED ON THE WELL KNOWN COMMON LAW RULES AS TO TH E EFFECT OF THE SENDING OF A CHEQUE IN PAYMENT OF A DEBT, AND IN THE FACT THAT THOUGH THE PAYMENT IS SUBJECT TO THE CONDITION SUBSEQUENT THAT THE CHEQUE MUST BE MET ON PRESENTAT ION, THE DATE OF PAYMENT, IF THE CHEQUE IS DULY MET, IS THE DATE WHEN THE CHEQUE WAS POSTED. IN THE CASE BEFORE US NONE OF THE CHEQUES HAS BEEN DISHONOURED ON PRESENTATION AND PAYMENT CANNOT, THEREFORE, BE SAID TO HAVE BEEN DEF EATED BY THE HAPPENING OF THE CONDITION SUBSEQUENT, NAMELY DISHONOUR BY NON-PAYMENT AND THA T BEING SO THERE CAN BE NO QUESTION, THEREFORE, THAT THE ASSESSEE DID NOT RECEIVE PAYMEN T BY THE RECEIPT OF THE CHEQUES. THE POSITION, THEREFORE, IS THAT IN ONE VIEW OF THE MAT TER THERE WAS, IN THE CIRCUMSTANCES OF THIS CASE, AN IMPLIED AGREEMENT UNDER WHICH THE CHEQUES WERE ACCEPTED UNCONDITIONALLY AS PAYMENT AND ON ANOTHER VIEW, EVEN IF THE CHEQUES WE RE TAKEN CONDITIONALLY, THE CHEQUES NOT HAVING BEEN DISHONOURED BUT HAVING BEEN CASHED, THE PAYMENT RELATED BACK TO THE DATES OF THE RECEIPT OF THE CHEQUES AND IN LAW THE DATES OF PAYMENTS WERE THE DATES OF THE DELIVERY OF THE CHEQUES. 15) LOOKING INTO THE AFORESTATED UNDISPUTED FACTS, AND THE VIEW EXPRESSED BY THIS COURT IN THE CASE OF M/S OGALE GLASS WORKS LTD. (SUPRA), WE ARE OF THE VIEW THAT NO IRREGULARITY HAD BEEN COMMITTED BY THE ASSESSEE TRUST AND THERE WAS NO VIOLATION OF THE PROVISIONS OF SECTIONS 13(2)(B) OR 13(2)(H) OF THE ACT. THE FACT THAT MOST OF THE T RUSTEES OF THE ASSESSEE TRUST AND THE DIRECTORS OF M/S APOLLO TYRES LTD. AR E RELATED IS ABSOLUTELY IRRELEVANT. 8. FURTHER, WE ARE INCLINED TO REPRODUCE RELEVANT P ORTION OF CBDT CIRCULAR NO. 261 DATED 08/08/1979 WHICH READS AS FO LLOWS:- CIRCULAR: NO. 261 [F. NO. 385/61/79-IT(B)], DATED 8-8-1979. RECORDING DATE OF TENDER OF CHEQUE AND DATE OF ITS REALISATION ON CHALLANS FOR PAYMENT OF DIRECT TAXES IS TO BE DONE BY BRANCH OF AUTHORISED PUBLIC SECTOR BANK WHERE IT IS TENDERED FOR PAYMENT 1. IN TERMS OF RULE 80 OF THE COMPILATION OF THE TREA SURY RULES, IF A CHEQUE OR DRAFT TENDERED IN PAYMENT OF GOVERNMENT DUES AND ACCEPTED UNDER TH E PROVISIONS OF RULE 79 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. THE NEED TO INDICATE ON THE CHALLAN THE DATE OF TENDER OF THE CHEQUE/DRAFT WITH THE AUTHORISED PUBL IC SECTOR BANK, WAS DULY TAKEN NOTICE OF BY THE CENTRAL BOARD OF DIRECT TAXES AND AT THE REQ UEST OF THE BOARD, THE RESERVE BANK ISSUED INSTRUCTIONS TO ALL THE AUTHORISED PUBLIC SE CTOR BANKS IN NOVEMBER 1977 STIPULATING THAT THE RECEIVING BRANCH SHOULD BRAND EITHER AN IN WARD STAMP OF RECEIPT AS SOON AS THE CHALLAN IS TENDERED OVER THE COUNTER, OR A DATE STA MPED WITH PROVISION FOR TWO DATES, I.E., THE DATE OF TENDER AND THE DATE OF THE REALISATION OF T HE CHEQUE. THE SPECIMEN OF THE DATE STAMP IS AS UNDER: 'DATE OF TENDER.............................. RECEIVED PAYMENT RS. ........................... RUPEES....................................... DATE OF REALISATION.......................... FOR.................................BANK AUTHORISED SIGNATORY' . ITA NO. 1944 & 1840/M/2015 MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY ASSESSMENT YEAR-2010-11 7 9. FURTHER, IN TERMS OF SECTION 46 OF THE NEGOTIABL E INSTRUMENTS ACT, 1881 THE MAKING, ACCEPTANCE OR ENDORSEMENT OF A PRO MISSORY NOTE, BILL OF EXCHANGE OR CHEQUE IS COMPLETED BY DELIVERY, ACT UAL OR CONSTRUCTION. 10. THE RATIO OF AFORESAID JUDGMENTS, CBDT CIRCULAR , STATUTORY PROVISIONS OF NEGOTIABLE INSTRUMENTS ACT, 1881 LEAD US TO INEVITABLE CONCLUSION THAT DATE OF TENDER OF CHEQUE IS DEEMED TO BE THE DATE OF PAYMENT AND THE PAYMENT BY CHEQUE RELATES BACK TO T HE DATE OF DELIVERY OF CHEQUES PROVIDED THE SAME ARE NOT DISHONORED UPO N PRESENTATION. 11. APPLYING THE SAME PRINCIPLE TO THE FACTS OF THE PRESENT CASE, WE FIND THAT THE BANKER OF THE ASSESSEE HAS CERTIFIED THAT THE CHEQUES WERE DEPOSITED ON 07/07/2009 AND THE CIRCUMSTANTIAL EVID ENCES VIZ. DATE OF CHEQUE, PAY-IN-SLIP ALSO SUPPORTS THE SAME. UNDISPU TEDLY, THE CHEQUES, UPON PRESENTATION, WERE REALIZED AND NOT DISHONORED AND THEREFORE, WE CONCLUDE THAT THE REVENUE WAS NOT JUSTIFIED IN IMPO SING INTEREST ON THE ASSESSEE U/S 201(1A) SINCE THE ASSESSEE FULFILLED H IS PART OF OBLIGATION WELL WITHIN DUE DATE I.E. 07/07/2009. 12. RESULTANTLY, BY DELETING THE IMPUGNED INTEREST, WE ALLOW ASSESSEES APPEAL WHEREAS REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04 TH OCTOBER, 2017. SD/- SD/- (JOGINDER SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 04.10.2017 SR.PS:- THIRUMALESH ITA NO. 1944 & 1840/M/2015 MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY ASSESSMENT YEAR-2010-11 8 / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. ''- , - , / DR, ITAT, MUMBAI 6. ./ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI