MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY,MUMBAI V. DEPUTY COMMISSIONER OF INCOME-TAX, GHAZIABAD

ITA 7275/MUM/2025

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The case involves the Mumbai Metropolitan Region Development Authority (the appellant) challenging the interest levied on late payment of TDS under section 201(1A) of the Income Tax Act, 1961, amounting to Rs.39,57,378. The appellant argued that the interest was incorrectly applied as the cheque for the TDS payment was tendered on the due date, April 29, 2022, despite the actual realization date being May 2, 2022. The Tribunal considered various precedents and a CBDT circular that supported the appellant's position that the date of payment should be considered as the date of cheque tendering, not the date of realization.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848132 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2022-2023
• Appeal Filed On: 11-11-2025
• Other Referred Cases: CIT vs. Ogale Glass Works Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAMKOSURI
• Assessee Lawyers: VRUSHTI GALANI
• Keywords: TDS

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No.7274/Mum/2025 (Assessment Year: 2022-23) & ITA No.7275/Mum/2025 (Assessment Year: 2022-23) M/s. Mumbai Metro Politian Region Development Authority, Plot No.C-14 & C-15, Bandra Kurla Complex, Bandra East, Mumbai – 400 051 Vs. Deputy Commissioner of Income Tax, Centralized Processing Cell, TDS Or Assistant Commissioner of Income Tax, TDS, TDS Circle-1(3), TDS CPC, Aaykar Bhavan, Sector-3, Vaishali, Ghaziabad – 201010 Or DCIT(Exemptions), Circle 2, Cumballa Hill, Mumbai PAN:AAATM7106R (Appellant) : (Respondent) Assessee by : Ms. Vrushti Galani, AR Ms. Sejal Shaha, AR Respondent by : Shri Annavaram Kosuri, Sr. AR Date of Hearing : 21.01.2026 Date of Pronouncement : 24.03.2026 O R D E R Per Kavitha Rajagopal, JM: The captioned appeals are filed by the assessee challenging the order of the Learned Commissioner of Income Tax (Appeals), Delhi [‘Ld. CIT(E)’ for short], National Faceless Printed from counselvise.com ITA No.7274/Mum/2025 & ors. M/s. Mumbai Metro Politian Region Development Authority 2 Appeal Centre (“NFAC” for short) passed u/s 250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2022-23. 2. As the facts are identical, we hereby pass a consolidated order by taking ITA No.7274/M/2025 as the lead case. 3. The assessee has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in upholding the impugned intimation levying interest u/s. 201(1A) of the Act, amounting to Rs.39,24,978. 2. The CIT (A) failed to appreciate that as accepted by Tribunal in Appellant's own case, for the purpose of determining the 'date of payment', the relevant is the 'date of tender or presentation of cheque to the Bank and not the date of its realisation and accordingly, on facts and otherwise in law, no interest u/s.201(1A) of the Act is leviable. 3. The Appellant, therefore, prays that on the facts and in law, the interest levied u/s. 201(1A) of the Act be deleted. GROUND NO. II: GENERAL: The Appellant craves leaves to add to, alter, amend and / or delete the above grounds of appeal.” 4. The solitary issue involved in the present appeal is the levy of interest on late payment of TDS u/s 201(1A) of the Act amounting to Rs.39,57,378/- determined by the Learned Assessing Officer (“Ld. AO” for short) and upheld by the Ld. CIT(A). It is observed that order u/s 200A of the Act was passed and a demand notice for penalty amounting to Rs.40,82,850/- was issued which included interest on late payment of TDS amounting to Rs.39,57,378/- u/s 201(1A) of the Act. 5. The assessee challenged the interest levied before the Ld. CIT(A) stating that the due date of depositing TDS for the month of March 2022 was on 30.04.2022 for which the Printed from counselvise.com ITA No.7274/Mum/2025 & ors. M/s. Mumbai Metro Politian Region Development Authority 3 assessee had issued a cheque bearing No.974028 drawn on 29.04.2022 amounting to Rs.13,84,91,751/- to Bank of Maharashtra and the cheque was duly presented on 29.04.2022. It is further observed that the said payment was cleared from the banker’s end on 02.05.2022 and hence the lower authorities levied interest on late payment. 6. The Learned Authorized Representative (“Ld. AR” for short) for the assessee contended that the assessee had deposited and tendered the cheque on 29.04.2022 which receipt was duly stamped by the bank on the same day but due to technical glitches the payment was not reflected in the income tax portal and further since 01.05.2022 was a holiday the payment was cleared by the banker only on 02.05.2022. The Ld. AR contended that there was no delay on the part of the assessee and prayed that the interest levied be deleted as the assessee has not defaulted in the deposit of TDS which was well within the prescribed period. The Ld. AR relied on a catena of decisions. 7. The Learned Departmental Representative (“Ld. AR” for short), on the other hand, controverted the said fact and contended that the assessee has failed to furnish documentary evidences in support of its contention. The Ld. DR relied on the order of the lower authorities. 8. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has filed the copy of the acknowledgment dated 29.04.2022 received from the Bank of Maharashtra along with copy of the draft challans evidencing the fact that the assessee has deposited and tendered the cheques on 29.04.2022 and has also furnished a letter from Bank of Maharashtra stating that the assessee had deposited Printed from counselvise.com ITA No.7274/Mum/2025 & ors. M/s. Mumbai Metro Politian Region Development Authority 4 various challans of TDS/TDS tax challans for payment on 29.04.2022 and since 01.05.2022 (Sunday) the payment of challans were made on 02.05.2022. This fact was also not controverted by the Ld. DR. The legal position in such cases stand covered in favour of the assessee by various decisions of the Hon’ble Apex Court, Hon’ble High Courts and the co-ordinate Benches of the Tribunal which were relied upon by the Ld. AR. We draw support from the decision of the Hon’ble Apex Court in the case of CIT vs. Ogale Glass Works Ltd. 25 ITR 529 wherein it was held that negotiable instrument when presented tantamounts to payment unless it is dishonoured. It further reiterated that the date of payment is the date when the cheque was posted subject to the condition subsequent, that the same is not dishonoured on presentation and once the cheque is not dishonoured the payment would relate back to the date of receipt of cheque and not the date when it was cleared. We also draw support from the CBDT circular No.261 dated 08.08.1979 which has clarified that the date of payment would be the date on which it was presented to the bankers and further directed the banks to endorse an inward stamp of receipt as soon as the challan is tendered over the counter or to mention the date of tender and the date of realisation of the cheque. The extract of the Circular is cited herein under for ease of reference: “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 Treasury Rules, if a cheque or draft tendered in payment of Government dues and accepted under the 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 public sector bank, was duly taken notice of by the Central Board of Direct Taxes and at the request of the Board, the Reserve Bank Printed from counselvise.com ITA No.7274/Mum/2025 & ors. M/s. Mumbai Metro Politian Region Development Authority 5 issued instructions to all the authorised public sector banks in November 1977 stipulating that the receiving branch should brand either an inward stamp of receipt as soon as the challan is tendered over the counter, or a date stamped with provision for two dates, i.e., the date of tender and the date of the realisation of the cheque. The specimen of the date stamp is as under: \"Date of tender.............................. Received payment Rs. ........................... Rupees....................................... Date of realisation.......................... For.................................Bank Authorised Signatory\" ………………….” 9. From the above observation, it can be inferred that there was no delay on the part of the assessee and further the co-ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2010-11 have decided this issue which stands covered in favour of the assessee. By respectfully following the said observation, the appeal filed by the assessee is hereby allowed. 10. The finding given in this appeal i.e. ITA No.7274/M/2025 will apply mutatis mutandis to other appeal i.e. ITA No.7275/M/2025 as well and hence the same is also hereby allowed. 11. In the result, both the appeals filed by the assessee are allowed. Order pronounced in the open court on 24.03.2026 Sd/- Sd/- (VIKRAM SINGH YADAV) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 24.03.2026 * Kishore, Sr. P.S. Printed from counselvise.com ITA No.7274/Mum/2025 & ors. M/s. Mumbai Metro Politian Region Development Authority 6 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai Printed from counselvise.com "