The Kangra Co-operative Bank Ltd., New Delhi V. ACIT, CIRCLE- 62(1), New Delhi

ITA 3595/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7181 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALKA GAUTAM
• Assessee Lawyers: SL GUPTA
• Keywords: TDS
• Section: 244A; 234B; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SH. KUL BHARAT, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 3594/DEL/2018 : ASSTT. YEAR : 2007-08 ITA NO. 3595/DEL/2018 : ASSTT. YEAR : 2008-09 ITA NO. 3596/DEL/2018 : ASSTT. YEAR : 2009-10 THE KANGRA CO-OPERATIVE BANK LTD., JAIN KHANDELWAL & CO., CA, 510, NEW DELHI HOUSE, 27, BARAKHAMBA ROAD, NEW DELHI-110001 VS ACIT, CIRCLE-62(1), NEW DELHI-110002 (APPELLANT) (RESPONDENT) PAN NO. AA ATT0361M ASSESSEE BY : SH. S. L. GUPTA, CA REVENUE BY : MS. ALKA GAUTAM, SR. DR DATE OF HEAR ING: 25 . 0 8 .20 2 1 DATE OF PRONOUNCEMENT: 01 .0 9 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSE E AGAINST THE ORDERS OF LD. CIT(A)-20, NEW DELHI DATE D 28.02.2018 AND 28.03.2018. A.YS. 2007-08 & 2008-09 2. AS PER THE REVENUE, THE ASSESSEE HAS PAID ADVANC E TAX ON 18 TH SEPTEMBER, 18 TH DECEMBER AND 17 TH MARCH WHEREAS THE DUE DATE FOR PAYMENT OF ADVANCE TAX WAS 15 TH SEPTEMBER AND 15 TH ITA NO. 3594, 3595 & 3596/DEL/2018 KANGRA CO-OPERATIVE BANK LTD. 2 MARCH. ACCORDINGLY, THE REVENUE CHARGED INTEREST U/ S 234B AND 234C FOR DEFAULT IN PAYMENT OF ADVANCE TAX. 3. THE ASSESSEE CONTENDED THAT THE AMOUNTS HAVE BEE N INDEED PAID ON 15 TH SEPTEMBER, 14 TH DECEMBER AND 14 TH MARCH. THE ASSESSEE HAS SUBMITTED CERTIFICATE FROM THE PUN JAB NATIONAL BANK THAT THE CHEQUES ISSUED BY THE ASSESSEE HAVE B EEN DEPOSITED AND SENT FOR CLEARING ON THE SAME DATE (I .E. BEFORE 15 TH ) BUT WERE CLEARED AFTER THE DUE DATE (17 TH AND 18 TH ). HENCE, HE ARGUED THAT THE ASSESSEE WAS NOT LIABLE T O PAY INTEREST FOR DEFAULT OF PAYMENT OF ADVANCE TAX. THE LD. AR ALSO RELIED ON THE CIRCULAR NO. 676 OF CBDT DATED 14.01. 1994. 4. WE HAVE GONE THROUGH THE CIRCULAR WHICH IS REPRO DUCED AS UNDER: SECTION 211 INSTALMENTS OF ADVANCE TAX 1197. WHETHER, IN CASE LAST DAY FOR PAYMENT OF ANY INSTALLMENT OF ADVANCE TAX IS DAY ON WHICH RECEIVING BANK IS CLOSE D, ASSESSEE CAN MAKE PAYMENT ON NEXT IMMEDIATELY FOLLOWING WORKING DAY, AND IN SUCH CASES MANDATORY INTEREST LEVIABLE UNDER SECTIO NS 234B AND 234C WOULD NOT BE CHARGED. 1. REPRESENTATIONS HAVE BEEN RECEIVED BY THE BOARD SE EKING WAIVER OF INTEREST CHARGEABLE UNDER SECTIONS 234B AND 234C OF THE INCOME-TAX ACT, 1961 FOR DEFAULT IN PAYMENT OF INSTALLMENTS OF ADVA NCE 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 SUC H INSTALLMENTS (I.E., 15TH SEPTEMBER, 15TH DECEMBER AND 15TH MARCH ) HAPPENS TO BE A HOLIDAY AND THE ASSESSEE PAYS THE DUE AMOUNT OF ADV ANCE TAX ON THE NEXT WORKING DAY. 2. THE MATTER HAS BEEN CAREFULLY CONSIDERED BY THE BO ARD AND IT IS FELT THAT IN SUCH CASES SECTION 10 OF THE GENERAL CLAUSES ACT , 1897 WILL BE ITA NO. 3594, 3595 & 3596/DEL/2018 KANGRA CO-OPERATIVE BANK LTD. 3 APPLICABLE. THIS SECTION LAYS DOWN THAT WHERE ANY A CT OR PROCEEDING IS DIRECTED OR ALLOWED TO BE DONE OR TAKEN IN ANY COUR T OR OFFICE ON A CERTAIN DAY OR WITHIN A PRESCRIBED PERIOD, THEN, IF THE COU RT OR OFFICE (IN THE PRESENT CASE THE BANK WHICH IS AUTHORIZED TO RECEIV E 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 C ONSIDERED 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 T HAT 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 THE PAYMENT O N THE NEXT IMMEDIATELY FOLLOWING WORKING DAY, AND IN SUCH CASE S, THE MANDATORY INTEREST LEVIABLE UNDER SECTIONS 234B AND 234C OF THE INCOME-TAX ACT, 1961 WOULD NOT BE CHARGED. CIRCULAR : NO. 676, DATED 14-1-1994. 5. A COLLECTING BANKER ACTS AS AN AGENT OF THE CUST OMER IF HE CREDITS THE LATTERS ACCOUNT WITH THE AMOUNT OF THE CHEQUE AFTER THE AMOUNT IS ACTUALLY REALIZED FROM THE DRAWEE BAN KER. THEREAFTER THE CUSTOMER IS ENTITLED TO DRAW THE AMO UNT OF THE CHEQUE. THE BANKER THUS ACTS AS AN AGENT OF THE CUS TOMER AND CHARGES FROM HIM A COMMISSION FOR COLLECTING THE AM OUNT FROM OUTSTATION BANKS. 6. AS AN AGENT OF HIS CUSTOMER, THE COLLECTING BANK ER DOES NOT POSSESS TITLE TO THE CHEQUE BETTER THAN THAT OF THE CUSTOMER. IF THE CUSTOMER HAS NO TITLE THERETO, OR HIS TITLE IS DEFECTIVE, THE COLLECTING BANKER CANNOT HAVE GOOD TITLE TO THE CHE QUE. IN CASE THE CHEQUE COLLECTED BY HIM DID NOT BELONG TO HIS C USTOMER, HE WILL BE HELD LIABLE FOR CONVERSION OF MONEY, I.E., ILLEGALLY INTERFERING WITH THE RIGHTS OF TRUE OWNER OF THE CH EQUE. ITA NO. 3594, 3595 & 3596/DEL/2018 KANGRA CO-OPERATIVE BANK LTD. 4 7. FROM THE CONCURRENT READING OF THE ABOVE, IT CAN BE SAID THAT THE ASSESSEE IS DEEMED TO HAVE PAID THE ADVANC E TAX WITHIN THE DUE DATE OF PAYMENT. HENCE, NOT LIABLE T O BE CHARGED ANY INTEREST U/S 234B AND 234C. A.Y. 2007-08 8. THE ASSESSING OFFICER DENIED GRANT OF INTEREST U /S 244A ON THE GROUNDS THAT THE REFUND DETERMINED DOESNT EXCE ED 10% OF THE TOTAL TAX PAYABLE. SINCE, THE ISSUE OF INTEREST U/S 234B AND 234C HAS BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE , THERE WOULD BE UPWARD REVISION OF THE INTEREST RECEIVABLE . THE ASSESSING OFFICER IS HEREBY DIRECTED TO RE-COMPUTE THE INTEREST PAYABLE AND ISSUE THE SAME AT THE EARLIEST AS PER S ECTION 244A(1)(A). A.Y. 2009-10 9. THE ASSESSING OFFICER HAS ADDED BACK RS.3,54,385 /- ON ACCOUNT OF DIFFERENCE IN INCOME REPORTED IN AIR. 10. IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143 (3) THE LD. ASSESSING OFFICER HAS ADDED A SUM OF RS.7,03,654/- ON ACCOUNT OF DIFFERENCE IN INTEREST INCOME SHOWN BY THE ASSES SEE FROM VARIOUS BANKS, (ICICI BANK RS.70,396/-, VIJAYA BANK RS.9,575/- AND HDFC BANK RS.6,23,683/-) WHILE COMPARING THE SA ME FROM DATA RECEIVED THROUGH AIR. 11. IT WAS ARGUED THAT DURING THE YEAR UNDER APPEAL , THE ACCOUNTS OF THE ASSESSEE WERE FINALIZED AND SIGNED ON 18.05.2009 AND INTEREST RECEIVABLE ON DEPOSITS WITH OTHER BANKS FOR THE YEAR WAS PROVIDED ON PROVISIONAL/APPROXIMAT E BASIS AS ITA NO. 3594, 3595 & 3596/DEL/2018 KANGRA CO-OPERATIVE BANK LTD. 5 TILL THAT DATE INTEREST/TDS CERTIFICATE WERE NOT RE CEIVED FROM THE BANKS WHO HAS DEDUCTED THE TAX AT SOURCE. 12. IT WAS ARGUED THAT IF THERE IS ANY DIFFERENCE I N THE INTEREST PROVIDED BY THE ASSESSEE AND THE INTEREST PROVIDED BY OTHER BANKS ON WHICH INCOME TAX AT SOURCE IS DEDUCTED, TH E SAME IS ACCOUNTED FOR IN THE NEXT FINANCIAL YEAR AND ULTIMA TELY THERE IS NO INCOME WHICH IS NOT ACCOUNTED FOR IN THE BOOKS O F THE ASSESSEE BANK. ALL THE RECEIPTS/INCOME OF THE ASSES SEE BANK IS ROUTED ONLY THROUGH ITS PROFIT & LOSS A/C. IF THERE IS ANY EXCESS/SHORTFALL IN INTEREST IN TWO FIGURES IN ONE FINANCIAL YEAR, THE SAME IS TAKEN CARE OF IN THE NEXT PERIOD AND TH ERE IS NO TAX AVOIDANCE/DEFERMENT AS THERE IS SAME INCOME TAX SLA B. 13. ACCORDINGLY, IN CASE OF INTEREST RECEIVED FROM ICICI BANK, VIJAYA BANK & HDFC BANK, THE DIFFERENCE OF INTEREST IN TWO FIGURES IN THE A.Y. 2009-10 IS ACCOUNTED FOR IN THE NEXT PERIOD/MATURITY OF DEPOSIT, AS IT IS A ROUTINE FEAT URE IN CASE OF INTEREST ON DEPOSITS WITH BANKS. ACTUAL FIGURE OF I NTEREST CANNOT BE ACCOUNTED FOR TILL THE RECEIPT OF TDS CERTIFICAT E AND ACCOUNTS CANNOT BE HELD PENDING TILL THE RECEIPT OF TDS CERT IFICATE, AS THE DIFFERENCE IS MINOR AND ALSO THE SAME IS BEING TAKE N CARE OF IN THE NEXT FINANCIAL YEAR. ACCORDINGLY, ALL THE INCOM E IS INCLUDED IN ITS RETURN OF INCOME ON WHICH DUE INCOME TAX IS PAID. THE ASSESSEE IS FOLLOWING THE SAME ACCOUNTING POLICY AN D PROCEDURE SINCE LONG AND THERE IS NO CHANGE IN THIS REGARD. ITA NO. 3594, 3595 & 3596/DEL/2018 KANGRA CO-OPERATIVE BANK LTD. 6 14. DETAIL OF INTEREST INCLUDED IN THE TOTAL INCOME IS AS FOLLOWS: A.Y. HDFC BANK ICICI BANK VIJAYA BANK 2008-09 23,94,320/- ----- ----- 2009-10 34,11,239/- 27,96,713/- 2,05,479/- 2010-11 7,68,357/- 39,92,463/- 3,70,942/- 2011-12 10,54,110/- 25,73,380/- 12,36,829/- TOTAL INT. INCOME 76,28,026/- 93,62,556/- 18,13,250/- 15. DETAILS OF INTEREST AS PER CERTIFICATE ISSUED B Y THEM IS AS FOLLOWS: A.Y. HDFC BANK ICICI BANK VIJAYA BANK 2008-09 22,41,903/- ----- ----- 2009-10 36,85,653/- ----- 2,15,054/- 2010-11 6,46,360/- ----- 4,99,674/- 2011-12 10,54,110/- 31,69,178/- 12,25,702/- TOTAL INT. INCOME 76,28,026/- 31,69,178/- 19,40,430/- AS PER 26AS 76,28,026/- 71,44,823/- 18,74,430/- 16. FROM THE ABOVE, IT IS CLEAR THAT WHILE CHECKING THE TOTAL INTEREST DURING THE PERIOD FROM AYS 2008-09 AND 200 9-10, INTEREST SHOWN AS INCOME BY THE BANK AS A WHOLE IS MUCH HIGHER THAN THE INTEREST SHOWN IN THE 26AS AND INTEREST CE RTIFICATES. SO THE DATA PROVIDED IN AIR IS VARIABLE, HENCE THE ADD ITIONS DESERVES TO BE DELETED. 17. WE FIND THAT THE MISMATCH AROSE DUE TO DIFFEREN CE IN THE TDS DEDUCTED, THE RECEIPT OF TDS CERTIFICATE AND TH E INTEREST EARNED. THE ASSESSEE HAS BEEN CONTINUOUSLY FOLLOWIN G THE SAME SYSTEM OF ACCOUNTING AND FOUND TO BE ACCOUNTING FOR THE INTEREST RIGHTLY MORE THAN WHICH HAS BEEN REFLECTED IN THE 26AS. ITA NO. 3594, 3595 & 3596/DEL/2018 KANGRA CO-OPERATIVE BANK LTD. 7 18. KEEPING IN VIEW, THE SIMILAR RATE OF TAX FOR AL L THE YEARS, IT IS A REVENUE NEUTRAL EXERCISE AND NO DISALLOWANCE O N ACCOUNT OF MISMATCH IS CALLED FOR. 19. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/09/2021. SD/- SD/- (KUL BHARAT) (DR. B. R. R. KUMAR) JUDICIAL MEMBER AC COUNTANT MEMBER DATED: 01/09/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR