M/s NHAI, Siliguri V. A.C.I.T,(TDS), Siliguri

ITA 2296/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4599 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 26-08-2013
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR J
• Assessee Lawyers: S M SURANA
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.2296/KOL/2013 ASSESSMENT YEAR:2009-10 M/S NHAI, PIU-SILIGURI, SEVOKE ROAD, SILIGURI 734001 [ PAN NO.AAATN 1963 H ] / V/S . ACIT, (TDS), SILIGURI, PIN-734001 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI S.M.SURANA, ADVOCATE /BY RESPONDENT SHRI SAURABH KUMAR, JCIT-DR /DATE OF HEARING 04-05-2016 /DATE OF PRONOUNCEMENT -06-2016 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS), SILIGURI DATED 18.06.2013. AS SESSMENT WAS FRAMED BY ACIT(TDS), SILIGURI U/S 201(1)/201(1A) OF THE INCOM E TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 26.03.2013 FOR ASSESSMENT YEAR 2009-10.THE GROUNDS RAISED BY ASSES SEE PER ITS APPEAL ARE AS UNDER:- 1. FOR THAT THE ORDER OF THE LD. CIT(A) IS ARBITRAR Y, ILLEGAL AND BAD IN LAW. 2. FOR THAT THE ORDER IS BAD IN LAW AND IS BARRED B Y LIMITATION AND IS THEREFORE LIABLE TO BE QUASHED. ITA NO.2296/KOL/2013 A.Y.2009 -10 M/S NHAI, V. ACIT (TDS) SLG. PAGE 2 3. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO WHEN, BEFORE PASSING THE IMPUGNED ORDER THE LD. AO DID NOT PASS ANY ORDER TREATING THE ASSESSEE AS ASSESSEE IN DEFAULT. 4. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO IGNORING THE DATE ON WHICH THE TAX DEDUCTED WAS ACTUALLY PAID AN D TAKING INTO ACCOUNT THE AMOUNT CREDITED TO THE ACCOUNT OF THE CENTRAL GOVER NMENT AS ACTUALLY PAID. 5. FOR THAT THE LD. CIT(A) SHOULD HAVE KEPT IN MIND THAT THE BANK TO WHOM, CHEQUES WERE TENDERED WERE ACTING ON BEHALF OF THE CENTRAL GOVERNMENT AS PER THE NOTIFICATIONS ISSUED BY THE CENTRAL GOVERNM ENT FOR COLLECTION OF THE GOVERNMENT DUES. 6. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND ACCEPTED PRINCIPLES OF LAW THE LD. CIT(A) SHOULD HAVE TREATED THE PAYME NT TENDERED BY THE ASSESSEE AS THE DATE OF PAYMENT OF THE TAXES. 7. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE ORDER OF THE CIT(A) BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PR AYED FOR. SHRI S.M.SURANA, LD AUTHORIZED REPRESENTATIVE APPE ARED ON BEHALF OF ASSESSEE AND SHRI SAURAABH KUMAR, LD DEPARTMENTAL REPRESENTATIVE APPEARED ON BEHALF OF REVENUE. 2. THE INTER-CONNECTED COMMON ISSUE IN ALL THE GROU NDS OF ASSESSEE IS THAT LD CIT(A) ERRED IN CONFIRMING THE ACTION O F ASSESSING OFFICER BY IMPOSING THE INTEREST OF 1,17,310/- ON ACCOUNT OF LATE DEPOSIT OF TAX DEPOSITED AT SOURCE (TDS FOR SHORT) AMOUNT U/S. 201 (1)/201(1A) OF THE ACT. 3. FACTS IN BRIEF ARE THAT ASSESSEE IN THE PRESENT CASE IS AN AUTONOMOUS BODY UNDER THE MINISTRY OF ROAD TRANSPO RT & HIGHWAYS, GOVT. OF INDIA AND ENGAGED IN THE BUSINESS OF CONST RUCTION OF NATIONAL HIGHWAY. DURING THE COURSE OF ASSESSMENT PROCEEDING S, ASSESSING OFFICER OBSERVED THAT THERE WAS A DELAY IN MAKING T HE PAYMENT OF TDS AMOUNT AS STIPULATED U/S 201 OF THE ACT AND DETAILS OF TDS PAYMENT AS UNDER:- ITA NO.2296/KOL/2013 A.Y.2009 -10 M/S NHAI, V. ACIT (TDS) SLG. PAGE 3 SL. NO. DATE OF PAYMENT SHOWN AMOUNT OF PAYMENT TAX AMOUNT DEPOSITED DATE OF DEPOSIT SHOWN ACTUAL DATE OF DEPOSIT MONTHS OF DEFAULT AMOUNT OF INTEREST CLAIMED AMOUNT OF INTEREST PAYABLE 1 03.10.08 300081393.00 681554.00 08.11.08 06.11.08 0.00 13632.00 0.00 2 17.10.08 56953431.00 1020085.00 08.11.08 06.11.08 0.00 10201.00 0.00 3 20.10.08 77882560.00 1764819.00 08.11.08 06.11.08 0.00 17648.00 0.00 4 21.10.08 48444661.00 1097756.00 08.11.08 06.11.08 0.00 10978.00 0.00 5 31.10.08 3059101.00 7281.00 08.11.08 06.11.08 0.00 72.00 0.00 15 03.10.08 2932364 126721 08.11.08 06.11.08 0.00 2535.00 0.0 0 16 21.10.08 80000 8240 08.11.08 06.11.08 0.00 83.00 0.0 0 6 02.11.08 40579222 919525 10.12.08 05.12.08 0.00 18391.00 0.00 8 05.11.08 65118870 1369388 10.12.08 05.12.08 0.00 27388.00 0.00 10 10.11.08 48733 1004 10.12.08 05.12.08 0.00 10.00 0. 00 11 12.11.08 39213191 444285 10.12.08 05.12.08 0.00 4443.00 0.00 13 21.11.08 43031730 864014 10.12.08 05.12.08 0.00 8639.00 0.00 17 03.11.08 926341 104954 10.12.08 05.12.08 0.00 2099.00 0.00 19 10.12.08 53900 5552 10.12.08 05.12.08 0.00 56.00 0. 00 20 25.11.08 95600 9939 10.12.08 05.12.08 0.00 100.00 0.0 0 7 03.11.08 291449 3002 12.12.08 10.12.08 0.00 60.00 0 .00 9 08.11.08 1173882 26600 12.12.08 10.12.08 0.00 532.00 0. 00 12 18.11.08 5155 106 12.12.08 10.12.08 0.00 1.00 0.0 0 18 05.11.08 15000 1545 12.12.08 10.12.08 0.00 31.00 0.00 14 24.12.08 1806200 40928 13.01.09 13.01.29 0.00 409.00 0.00 IN VIEW OF ABOVE, AO HAS LEVIED THE INTEREST OF 1,17,310/- OF THE ACT LATE DEPOSIT OF TDS AMOUNT. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D CIT(A) WHO CONFIRMED THE ACTION OF AO BY HAVING RELIANCE IN TH E ORDER OF ITAT AGRA BENCH DATED OF 08.06.2012 IN THE CASE OF G.M.MPRRDA, PIU V. ITO (TDS) IN ITA NOS. 370-371/AGRA/2011 FOR A.Y. 2008-09 AND BY OBSERVING AS UNDER:- FOLLOWING THE ABOVE ORDER OF THE HON'BLE ITAT, AGR A BENCH I HOLD THAT THE LD ACIT, (TDS), SILIGURI WAS JUSTIFIED IN LEVYING INTE REST U/S. 201(1A) OF THE IT ACT, 1961. I FURTHER HOLD THAT LEVY OF INTEREST U/S. 201 (1A) IS MANDATORY IF TDS HAS NOT BEEN ACTUALLY PAID TO THE GOVERNMENT ACCOUNT BY THE DUE DATE OF DEPOSIT AS PER THE RELEVANT PROVISIONS OF THE ACT. IN THE P RESENT CASE AS THE ASSESSEE ITA NO.2296/KOL/2013 A.Y.2009 -10 M/S NHAI, V. ACIT (TDS) SLG. PAGE 4 HAS NOT ACTUALLY PAID TDS BY THE DUE DATE OF DEPOSI T DUE TO REASONS OF LATE CLEARING OF CHEQUES LEVY OF INTEREST U/S. 201(1A) O F THE ACT N THE ASSESSEE IS FULLY JUSTIFIED. THEREFORE, I AM NOT INCLINED TO IN TERFERE WITH THE ORDER OF THE LD. ACIT (TDS), SILIGURI U/S. 201(1)/201(1A) OF THE IT ACT, 1961 FOR FORM NO.26Q FOR 3 RD QUARTER OF FINANCIAL YEAR 2008-09. BEING AGGRIEVED BY THIS ORDER OF LD CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 5. BEFORE US LD AR SUBMITTED THAT TDS AMOUNT WAS D EPOSITED BEFORE DUE DATE ON 06.11.2008 VIDE CHEQUE NO.131217 DRAWN ON AXIS BANK BUT THE CREDIT WAS GIVEN ON 08.11.2008. SIMILA RLY, TDS PERTINENT TO MONTH OF NOVEMBER CHEQUE WAS ISSUED ON 05.12.2008 B UT CREDIT WAS GIVEN ON 10.12.2008 HOWEVER, IN SOME CASES, THE TDS PERTAINING TO MONTH OF NOV. CHEQUE WAS ISSUED ON 10.12.08 AFTER I TS DUE DATE. IN ALL THE CASES, CHEQUES WERE DEPOSITED IN THE AXIS BANK WHICH IS AUTHORIZED BANK FOR THE COLLECTION OF GOVERNMENT TAXES. IN TER MS OF CIRCULAR NO. 232 [F.NO.385/79/77-IT(B)], DATED 26-11-1997. THERE WAS NO DELAY ON THE PART OF ASSESSEE FOR MAKING THE PAYMENT OF TDS ON I TS DUE DATE. HOWEVER, THE CREDIT WAS GIVEN BY THE BANK AFTER THE DUE DATE AND THAT TIME WAS TAKEN BY BANK IN ITS CLEARING PROCESSING B EING NO FAULT ON THE PART OF ASSESSEE. THEREFORE, THE ASSESSEE SHOULD NO T BE PENALIZED. ON THE OTHER HAND, LD DR VEHEMENTLY RELIED ON THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING DISCUSSION, WE FIND THAT INTEREST WAS IMPOSED BY AO ON ACCOUNT OF LATE DEPOSIT OF TAX AND SAME WAS CONFIRMED BY LD CIT(A) RELYING ON THE ORDER OF ITA T AGRA BENCH IN THE CASE OF G.M.MPRRDA, PIU (SUPRA). FROM THE FACTS OF THE CASE, WE FIND ITA NO.2296/KOL/2013 A.Y.2009 -10 M/S NHAI, V. ACIT (TDS) SLG. PAGE 5 THAT CENTRAL BOARD OF DIRECT TAXES, IN EXCISE OF PO WERS CONFERRED UNDER THE INCOME TAX ACT, 1961 ISSUED CIRCULAR NO.261 DAT ED AUGUST 8, 1979 (CBDT CIRCULAR) IN LINE WITH THE ABOVE RULES, CLARI FYING THAT IN CASE OF PAYMENT OF CHEQUE/DRAFT, IF HONORED, THE DATE OF PA YMENT WOULD RELATE BACK TO THE DATE OF HANDING OVER OF CHEQUE/DRAFT TO THE GOVERNMENTS BANKERS. HOWEVER THEREAFTER CENTRAL GOVERNMENT ACCOUNT (RECE IPTS AND PAYMENTS) RULES 1983 RULES) WERE FRAMED. THESE RULE S PROVIDE THAT DATE OF PAYMENT FOR GOVERNMENT DUES TENDERED IN FOR M OF CHEQUE/DRAFT SHALL BE THE DATE ON WHICH IT WAS CLEARED AND ENTER ED IN THE RECEIPT SCROLL. HOWEVER WE FIND THAT AFTER FRAMING THE RULE S, THE CIRCULAR NO. 261 SHOULD HAVE BEEN WITHDRAWN BY CBDT BUT THE SAME WAS NOT WITHDRAWN. SO IN THE BACKDROP OF THE ABOVE, AN ISSUE ARISES AS TO WHETHER THE CBDT CIRCULAR WHICH WAS ISSUED IN THE CONTEXT OF TH E OLD RULES STILL HOLDS GOOD AFTER ENFORCEMENT OF THE 1983 RULES. THE CHENNAI TRIBUNAL (TRIBUNAL), IN A RECENT JUDGMENT, IN THE CASE OF PL HAULWEL TRAILERS LTD V DCIT [2006] 100 ITD 485 (CHENNAI) HAD AN OCCASION TO DW ELL ON THE ISSUE. THE ASSESSEE, IN THIS CASE, PAID ADVANCE TAX , FOR ASSESSMENT YEAR 1996-97, BY DEPOSITING THE CHEQUES WITH THE AU THORIZED BANK WITHIN THE DUE DATE. THESE CHEQUES HOWEVER, WERE REALIZED AFTER THE DUE DATE. THE ASSESSING OFFICER TAKING THE ACTUAL DATE OF REA LIZATION OF CHEQUES, AS THE DATE OF PAYMENT, LEVIED INTEREST FOR DEFERMENT OF ADVANCE TAX U/S. 234C OF THE INCOME-TAX ACT 1961.THE TRIBUNAL OBSERV ED THAT CBDT CIRCULAR, WHICH WAS ISSUED BY THE APEX ADMINISTRATI VE BODY UNDER THE INCOME-TAX ACT, 1961, WAS NOT WITHDRAWN AFTER THE R ULES WERE FRAMED, I.E. IT STILL HOLDS GOOD AND WOULD HENCE BE BINDING ON THE INCOME-TAX AUTHORITIES IN PREFERENCES TO ANY OTHER EXECUTIVE I NSTRUCTION ISSUED BY ANY OTHER AUTHORITY. THE TRIBUNAL THUS HELD THAT, A S CHEQUES WERE PRESENTED AND DEPOSITED WITH THE AUTHORIZED BANKER WITHIN THE DUE DATE ITA NO.2296/KOL/2013 A.Y.2009 -10 M/S NHAI, V. ACIT (TDS) SLG. PAGE 6 AND ENCASHED SUBSEQUENTLY, DATE OF TENDER OF THE CH EQUE SHOULD BE TAKEN AS THE DATE OF PAYMENT. WHILE RENDERING ITS D ECISION, THE TRIBUNAL HAS DULY CONSIDERED THE CONFLICT BETWEEN THE RULES, CIRCULAR AND THE PROVISIONS OF NEGOTIABLE INSTRUMENTS ACT, 1881. OTH ER THAN UPHOLDING THE BINDING NATURE OF THE CIRCULAR, THE TRIBUNAL HAS OB SERVED THAT UNDER THE NEGOTIABLE INSTRUMENTS ACT, 1881 IT HAS BEEN HELD T HAT ONCE THE CHEQUE IS ENCASHED IN ORDINARY COURSE, IT WILL DISCHARGE T HE DRAWER FROM PAYMENT, AND THUS THERE EXISTS AN APPARENT CONFLICT BETWEEN INTERPRETATION OF NEGOTIABLE INSTRUMENT ACT, 1881 A ND THE RULES WHICH HAVE BEEN FRAMED BY EXECUTIVE AUTHORITIES IN EXERCI SE OF POWERS UNDER ARTICLE 283(1) OF THE CONSTITUTION OF INDIA. THE TR IBUNAL HAS THEREAFTER, HELD THAT IN SUCH A SCENARIO, THE LAW ENACTED BY TH E PARLIAMENT WOULD PREVAIL I.E. NEGOTIABLE INSTRUMENTS ACT, 1881 WOULD PREVAIL OVER THE RULES. SO ,ONE THING IS CLEAR THAT THOUGH THE RULES OF CENTRAL GOVT. HAS BEEN CHANGED BUT CBDT HAS NOT WITHDRAWN THE CIRCULA R ISSUED IN THIS REGARD SO IT WILL BINDING ON TAX AUTHORITY UNLESS I T WITHDRAWN CBDT HAS CLARIFIED IN ITS CIRCULAR NO 678 OF JANUARY 14, 199 4, THAT IF THE LAST DATE FOR PAYMENT IS A HOLIDAY, SECTION 10 OF THE GENERAL CLAUSES ACT, 1897 WILL BE APPLICABLE AND, ACCORDINGLY, THE ASSESSEE C AN MAKE THE PAYMENT ON THE NEXT IMMEDIATELY FOLLOWING WORKING DAY AND, IN SUCH CASES, THE MANDATORY INTEREST LEVIABLE UNDER SECTIONS 234B AND 234C WOULD NOT BE CHARGED SO WE CAN SOME UP THE ISSUE WITH THE FOLLOW ING THAT IF THERE IS A CLEAR PROVISION UNDER THE ANY ACT/RULES./CIRCULAR/N OTIFICATION/PRESS RELEASE THEN THEY PREVAILS AND CHEQUE TENDER DATE WILL BE T REATED AS PAYMENT DATE. IF THERE IS NO SUCH CLEAR PROVISION THAN FOR GOVERN MENT DUE 'CENTRAL GOVERNMENT ACCOUNT (RECEIPTS AND PAYMENTS) RULES 19 83 'WILL APPLY ACCORDING TO WHICH THE DATE OF PAYMENT OF GOVERNMEN T DUES TENDERED IN FORM OF CHEQUE/DRAFT SHALL BE THE DATE ON WHICH IT WAS CLEARED AND ENTERED IN THE RECEIPT SCROLL; ITA NO.2296/KOL/2013 A.Y.2009 -10 M/S NHAI, V. ACIT (TDS) SLG. PAGE 7 IN THE INSTANT CASE, ASSESSEE HAS DEPOSITED THE TDS AMOUNT ON OR BEFORE 7 TH DAY OF NEXT MONTH IN EACH TAX WAS DEDUCTED. HOWEVE R, IN SOME CASES, TAX WAS DEPOSITED LATE I.E. AFTER DUE D ATE. IN THE SIMILAR FACTS AND CIRCUMSTANCES, VARIOUS COURTS HAVE DECIDE D THE ISSUE IN FAVOUR OF ASSESSEE IN THE CASE OF CIT V. NENMONY INVESTMENTS & AGENCIES LTD. (1978) 113 ITR 354, RELYING ON THE ABOVE JUDGMENT O F HON'BLE SUPREME COURT WE REACH TO THE CONCLUSION THAT THE CASES WHE RE THE CHEQUE HAD BEEN DEPOSITED WITH THE BANK OR BEFORE 7 TH DAY OF NEXT MONTH IN WHICH TDS WAS DEDUCTED NO INTEREST WILL BE CHARGEABLE. TH E AO ACCORDINGLY DIRECTED. HENCE, THIS GROUND OF ASSESSEE IS ALLOWED . 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30/06/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WAS EEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP ! - 30/06/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/SNHAI, PIU-SILIGURI, SEVOKE ROAD, SILI GURI-734001 2. /RESPONDENT-ACIT(TDS), SILIGURI, PIN 734001 3. '#$ $ % / CONCERNED CIT SILIGURI 4. $ $ % - / CIT (A) SILIGURI 5. &'( ))'# , $ '# / DR, ITAT, KOLKATA 6. (*+,- / GUARD FILE. BY ORD ER/ $ , /TRUE COPY/ / $ '#,