RUBRIK INDIA PRIVATE LIMITED,BANGALORE vs. INCOME TAX OFFICER TDS WARD 3(1), BENGALURU

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ITA 1075/BANG/2026Status: DisposedITAT Bangalore21 October 2026AY 2025-2611 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) had fundamentally misconstrued the issue, treating the demand as a late-filing fee under section 234E instead of interest for delayed remittance of TDS under section 201(1A). The CIT(A)'s order was therefore unsustainable. The Tribunal noted that the assessee had initiated the payment process well before the due date of 7 January 2025, with final approval recorded on that date. Although the assessee's bank account was debited on 8 January 2025, the Tribunal, following precedents such as Standard Chartered Bank v. Dy. CIT and Kumudam Publications (P.) Ltd. v. CIT, held that payment is deemed to be made on the date the instruction is tendered to the bank, provided sufficient funds are available and the delay in actual credit is attributable to the bank or clearing house. The Tribunal found no delay on the part of the assessee in tendering the payment. Accordingly, the Tribunal directed the Assessing Officer to delete the interest charged of ₹1,81,79,890.

What were the facts?

Rubrik India Private Limited (the assessee) filed an appeal for assessment year 2025-26 against an order of the CIT(A) which upheld a demand from the Central Processing Centre (CPC). The CPC had issued an intimation under section 200A of the Income Tax Act, 1961, demanding interest of ₹1,81,79,892 under section 201(1A) for delayed remittance of Tax Deducted at Source (TDS). The assessee had deducted TDS of ₹60,60,36,809 on 30 December 2024. Payment instructions were submitted to Bank of America on 3 January 2025, with final approval on 7 January 2025. However, due to the bank's process, the assessee's account was debited on 8 January 2025, resulting in a one-day delay in actual remittance to the government account. The CIT(A) erroneously treated the demand as a fee under section 234E for late filing of the TDS statement.

What were the issues?

1. Whether the CIT(A) erred in adjudicating the appeal as if it pertained to a fee levied under section 234E, when the appeal actually related to interest levied for delayed payment of TDS under section 201(1A) of the Act. 2. Whether the CIT(A) erred in disposing of the appeal without addressing the grounds raised by the Appellant. 3. Whether the CIT(A) erred in upholding the levy of interest under section 201(1A) of the Act for a one-day delay in depositing TDS. Assessee's Contentions: - The CIT(A) misconstrued the dispute as concerning a fee under section 234E, whereas it was about interest under section 201(1A) for delayed payment. - The assessee had completed all necessary steps for payment by the due date of 7 January 2025, as the payment instruction was approved on that date and funds were reserved. - The delay of one day was unintentional and due to the bank's processing, not the assessee's fault. - Charging interest for two months for a one-day delay was unjustified. - Relied on judicial precedents like Standard Chartered Bank v. Dy. CIT, NHAI, PIU Siliguri v. ACIT, ITO V/s Broadcom Communication Technology Pvt. Ltd., Natma Securities Ltd. vs. ACIT, and Kumudam Publications (P.) Ltd. v. CIT. Revenue's Contentions: - The Government of India received the payment only on 8 January 2025, after the due date of 7 January 2025. - The delay covered parts of December and January, attracting interest for two months. - Statutory provisions do not permit relaxation, and the CPC's order was correct.

Which sections of the Income-tax Act were involved?

Section 200A,Section 201(1A),Section 234E,Section 220

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDARARAJAN K.

आयकर अपीलीय अधिकरण, बेंगलुरू पीठें, बेंगलुरू INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE BENCH: B BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA 1075/Bang/2026 (निर्धारण वर्ा/Assessment Year : 2025-26) RUBRIK INDIA PRIVATE INCOME TAX OFFICER LIMITED TDS WARD 3(1), 7TH FLOOR, BUILDING 9, HMT BUILDING, OUTER RING ROAD, BENGALURU-560095, KADUBEESANAHALLI, KARNATAKA Vs. VARTHUR, BANGALORE RURAL, BENGALURU-560087, KARNATAKA अपीलधर्थी Appellant प्रत्यर्थी Respondent

Permanent Account Number of Assessee: AAICR2131C

अपीलधर्थी द्वारा/Appellant represented by: Sri. Chavali Narayan - CA प्रत्यर्थी द्वारा/Respondent represented by: Sri. Pradeep S - Addl. CIT सुनवाई की तारीख / Date of conclusion of hearing: 18-Aug-2026 घोषणा की तारीख / Date of pronouncement: 21-Oct-2026 आदेश / ORDER PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT

1.

Rubrik India Private Limited (the assessee/appellant/company) has filed this appeal for assessment year 2025-26 against the order dated 13 January 2026 dismissing its appeal against the Central Processing Centre’s order dated 5 February 2025 under section 200A of the Income Tax Act, 1961 (the Act).

2.

The assessee provides technical support, development support, general and administrative services, and marketing support to its holding company. On 5 February 2025, the Central Processing Centre passed an order concerning its third-quarter TDS return in Form 24Q, charging interest for late payment. The interest amount is stated in the Rs. 181,79,892”. For December 2024, the assessee incurred salary expenditure stated as Rs. 169,55,59,964” and deducted tax of ₹60,60,36,809 on 30 December 2024. It submitted payment details to Bank of America on 3 January 2025 for remittance by the due date, 7 January 2025. Owing to an error, payment was approved only at 23:25 on 7 January 2025, still within the due date. As Bank of America was not authorised to collect income tax, it routed the payment through an authorised bank on 8 January 2025. The assessee’s account was debited that day, resulting in a one-day delay.

3.

Upon processing the return, the Central Processing Centre issued an intimation dated 5 February 2025 under section 200A of the Act, demanding interest under section 201(1A) for delayed remittance of TDS. The demand is stated in the source as “₹180 1,79,890”.

4.

The assessee appealed to the learned CIT(A), setting out these facts. However, the learned CIT(A) treated the demand as a fee under section 234E for late filing of the TDS statement, with the amount stated in the source as “₹180 1,79,892”. Relying on that provision and several judicial precedents, the learned CIT(A) upheld the Central Processing Centre’s action and dismissed the appeal. The assessee has therefore appealed before us.

5.

The Assessee has raised the following grounds of appeal: General Ground: 1. Erred in adjudicating the appeal as if it pertained to the fee levied u/s 234E of the Act, whereas the appeal actually related to the interest levied for delayed payment of TDS u/s 201(1A) of the Act.

2.

Erred in disposing of the appeal without addressing or providing comments on the various grounds raised by the Appellant.

Levy of Interest: 3. Erred in determining a sum of INR 1,81,79,892 as interest payable by the Appellant u/s 201(1A) of the Act.

4.

Erred in computing INR 1,81,79,890 towards interest for 2 months u/s 201(1A) of the Act even through there was a delay of only 1 day.

5.

Erred in levying interest without appreciating that the delay of 1 day was unintentional and circumstantial on the part of the Appellant.

6.

Erred in computing the interest even though request for payment of TDS was made by the Appellant to the bank within the due date.

7.

Without prejudice to above, the Ld. CPC has erred in levying the interest u/s 201(1A) of the Act for 2 months instead of 1 month.

8.

Erred in levying interest u/s 220 of the Act without issuing a separate and valid demand notice for such levy.

The Appellant submits that each of the above grounds is independent and without prejudice to one another.

The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal, so as to enable the Hon’ble Tribunal to decide on the appeal in accordance with the law.

6.

The learned authorised representative submitted a paper book in three volumes and referred principally to screenshots of the banking transactions. He stated that the payment instruction was created and approved on 3 January 2025, with three levels of authorisation completed on 4 January 2025, and submitted for payment on 7 January 2025. He contended that the assessee had paid within time because the amount was reserved in its bank account on or before 7 January 2025 and was unavailable for withdrawal. This was not a case where a payment instruction tendered on 3 January 2025 was subsequently reversed. Relying on the principle that the date of tendering a cheque or challan constitutes the date of payment, he submitted that there was no delay and that the Central Processing Centre’s order under section 200A of the Income Tax Act was incorrect. Referring extensively to the banking transaction trail, he argued that no interest was chargeable. He further submitted that the learned CIT(A) had misconstrued the dispute as concerning a fee rather than interest. Since all the judicial precedents relied upon concerned the levy of fees, the learned CIT(A)’s order was unsustainable.

7.

Alternatively, he submitted that the payment was debited from the assessee’s bank account on 8 January 2025. As the assessee was not responsible for the one-day delay, charging interest for two months was unjustified. He therefore sought deletion of the interest in the interests of justice.

8.

The learned departmental representative strongly supported the orders of the lower authorities. He submitted that the Government of India received the payment only on 8 January 2025, rather than the due date of 7 January 2025. Since tax had been deducted on 30 December 2024, the delay covered parts of both December and January. He contended that the statutory provision permitted no relaxation and that the Central Processing Centre’s order was therefore correct.

9.

We have considered the rival contentions and perused the orders of the lower authorities. The learned CIT(A) misconstrued the issue, which concerned interest charged by the Central Processing Centre for an alleged one-day delay in depositing tax. Instead, he treated the demand as a late- filing fee and upheld it by relying on judicial precedents concerning such fees. His order is therefore unsustainable.

10.

The records show that Bank of America, one of the assessee’s bankers, was not authorised by the Income Tax Department to collect income tax directly. The assessee processed the payment through that bank, tendering the payment advice on 3 January 2025 and obtaining approval the same day. All three levels of authorisation were completed on 4 January 2025. Final payment authorisation was recorded on 7 January 2025 at “20:00 3.24 hours”. The payment was scheduled and accepted by the target system on 7 January 2025. Thus, the assessee completed all steps on its part by that date, although its bank account was debited on 8 January 2025. According to the Central Processing Centre, the TDS of ₹60,60,36,809, deducted on 30 December 2024, was realised on 8 January 2025; the text also refers to deduction on 30 December 2025. If 8 January 2025 is treated as the payment date, the delay spans parts of December and January, attracting interest for two months. The question, however, is whether payment should be regarded as made only on 8 January 2025 when the assessee had tendered the instruction on 3 January 2025 and Bank of America had submitted it for payment on 7 January 2025.

11.

In Standard Chartered Bank v. Dy. CIT [IT Appeal No. 2153 to 2156 (Mum.) of 2018, dated 21-08-2020] wherein it is held as under:-

'5. We have carefully considered the rival arguments and perused relevant material on record including judicial pronouncements as cited and relied upon during the course of hearing before us. After going through the cited order of this Tribunal in Oil and Natural Gas Corporation Ltd. V/s DCIT (103 Taxmann.com 396 30/11/2018), we find that identical factual matrix as well as controversy has been dealt by the Tribunal and ultimately the issue has been decided in assessee's favor. The operative part of the decision, for convenience and ease of reference, could be extracted as follows:— 6. We have heard the authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record. The issue involved in the present appeal lies in a narrow compass. We find that our indulgence in the present appeal has been sought by the assessee to adjudicate as to whether the CIT(A) is right in law and the facts of the case in treating the assessee as being in default for delay in deposit of TDS, though the cheque towards the amount of TDS was tendered by the assessee to the government bank within the stipulated time period. We have deliberated at length on the issue under consideration, and find that that as per CBDT Circular No. 261 [F.No. 385/61/79-IT (B)], dated 8-8-1979, it has been clarified that the date of tendering of cheque for payment of government dues shall be deemed to be the date of payment of such taxes. We find that the aforesaid CBDT circular is applicable to all government dues, and makes no distinction whether the payment is by way of TDS, advance tax, self-assessment tax etc. The relevant extract of the aforesaid CBDT Circular No. 261, dated 8-8-1979 reads as under: "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 banker............." On a perusal of the order of the CIT(A), we find that he had declined to accept the aforesaid CBDT Circular No. 261, dated 8-8-1979, for the reason that as per him the "Central Treasury Rules (Old rules)" had been substituted by the "Central Government Account (Receipts and Payments) Rules, 1983" which therein governed the provisions of payment of government dues. The CIT(A) drawing support from the Central Government Account (Receipts and Payments) Rules, 1983, had therein concluded that as per the amended rules the government dues tendered in form of a cheque or draft shall be deemed to have been paid on the date on which it is cleared and entered in the receipt of scroll. Admittedly, we are in agreement with the view taken by the CIT(A) that the "Central Treasury Rules (Old Rules)" had been substituted by the "Central Government Account (receipts and payments) Rules, 1983", as per which the date on which a cheque or a draft is cleared is to be deemed as the date of making of the payment by a person towards government dues etc. However, at the same time we cannot remain oblivious of the fact that the CBDT Circular No. 261[F.No.385/61/79-IT(B)], dated 8-8-1979 had not been withdrawn, and as such holds the ground as on date. Rather, it would be relevant to point out that the CBDT in all its wisdom had not even modified the Circular No. 261, dated 8-8-1979 which was issued prior to the "Central Government Account (Receipt and Payments) Rules, 1983". Be that as it may, the aforesaid 'benevolent circular' viz. Circular No. 261, dated 8-8-1979 issued by the CBDT on the date of tendering of the cheque by the assessee towards the amount of TDS to the government bank, did hold the ground and was thus binding on the revenue. We are unable to persuade ourselves to subscribe to the observations of the CIT(A), that as the Central Treasury Rules (Old Rules) had been rendered as redundant, therefore, the CBDT Circular No. 261, dated 8-8-1979 would therein follow and also has to be taken as having been rendered as otiose. 7. We shall now advert to certain judicial pronouncements which fortifies the claim of the ld. A.R that the assessee stood discharged of its liability of depositing the TDS on the date on which it had tendered the cheque with the government bank. We find that that Hon'ble Supreme Court in the case of K. Kaplana Saraswathi (supra) has held that payment by cheque should be taken to be due payment, if the cheque is subsequently encashed in the ordinary course. Further, the Hon'ble High Court of Madras in CIT v. Kumudam Publications (P.) Ltd. [1981] 128 ITR 617 after deliberating on the Treasury Rules, had therein concluded that in view of Treasury Rules when cheques are handed over to the government officials or to the government officer authorised to received payment on behalf of the government, payment would be deemed to have been made on the date the cheque was handed over. We find that a coordinate bench of the Tribunal viz. ITAT Chennai in the case of P.L. Haulwel Trailers Ltd. v. Dy. CIT [2006] 100 ITD 485 (Chennai) while deliberating on the levy of interest under Sec. 234C of the Act, had observed that as the assessee had paid 'Advance Tax' by depositing the cheques with the authorized banks within the 'due date', therefore, the date of payment was to be taken as the date of presentation of the cheques by the assessee. The Tribunal had arrived at the aforesaid view after considering viz. (i) CBDT Circular No. 261, dated 8-8- 1979; (ii) Central Government Account (Receipts & Payments) Rules, 1983; and (iii) the judgment of the Hon'ble Supreme Court in the case of K. Kaplana Saraswathi (supra). Still further, the ITAT, Bangalore in ITO v. Bradcom Communication Technologies (P) Ltd. [ITA No. 895 & 900/2014] had observed that where the assessee had made the payment before the 'due date', it was thereafter beyond its control to ensure the transmission of the amount to the government account within the stipulated 'due date'. On the basis of the aforesaid observations, it was held by the Tribunal that the assessee could not be faulted for delay on the part of the bank or the clearing house, whatever may be the rules governing receipts and payments into the Central Government Account. We find that a similar view was also taken by the ITAT, Kolkata in NHAI, PIU Siliguri v. ACIT [ITA No. 2296/Kol/2013]. In the said case though the assessee had deposited the TDS amount before the 'due date', but credit was given by the bank after the said 'due date'. On the basis of the said facts, the A.O considering the delay in depositing of the TDS charged interest under sec. 201(1A). On appeal, the Tribunal after considering the Central Government Account (Receipts and Payments) Rules, 1983 and the CBDT Circular No. 261, dated 8-8-1979, concluded that where the cheque was deposited with a bank before the 7th day of the month following the month in which TDS was deducted, no interest could be charged. 8. We have deliberated at length on the issue under consideration before us in the backdrop of the facts and the aforesaid judicial pronouncements. In terms of our aforesaid observations, we are of the considered view that as the assessee had admittedly tendered the cheque with the bank i.e. State Bank of India, Branch: Bandra Kurla Complex, Mumbai well within the stipulated 'due date', therefore, it cannot be held as being in default for the delay on the part of the bank or the clearing house in making the remittance of the said amount to the Government Account. We thus in the backdrop of our aforesaid deliberations, not being able to persuade ourselves to subscribe to the view taken by the lower authorities that the assessee was to be treated as being in default for delay in deposit of the amount of TDS, thus set aside the order of the CIT(A) and delete the interest of Rs. 37,510/-levied by the A.O under sec. 201(1A) of the Act. 9. The appeal of the assessee is allowed. Upon perusal, we find that it was held by the bench that Circular No. 261, dated 08/08/1979 issued by the CBDT, unless withdrawn or amended, would hold the ground and would be binding on the revenue. Further, the payment would be deemed to have been made on the date the cheque was handed over to the banker and the date of payment was to be taken as the date of presentation of the cheques by the assessee. It also supports the proposition that the payment would relate back to the date of presentation of cheque unless the cheque is dishonored. The binding decisions cited by the assessee before Ld. CIT(A) also supports the said proposition. Similar view has been taken by Bangalore Tribunal in ITO V/s Broadcom Communication Technology Pvt. Ltd. (ITA Nos. 895 & 900/Bang/2014 dated 11/09/2015). No contrary decision is on record. Respectfully following the ratio of all these decisions, we hold that payment of TDS by the assessee would relate back to the date of presentation of cheques by the assessee to the banker. Accordingly, TDS-CPC, Ghaziabad is directed to revise the aforesaid intimation by taking the date of tender of cheques by the assessee as the actual date of payment and re-compute interest payable by the assessee, if any. The interest demand u/s 220(2) being consequential in nature, may also be recomputed. Resultantly, the appeal stands allowed to the extent indicated in the order.' 12. Similarly, in Natma Securities Ltd. vs. ACIT [2022] 145 taxmann.com 291 (Delhi - Trib.)/[2023] 199 ITD 31 (Delhi - Trib.)[30-11-2022], the coordinate bench considered a one-day delay in depositing TDS for which interest had been charged for two months. It held that no interest was leviable under section 201(1A) where the assessee had tendered the cheque to the bank within the due date, but the amount was debited one day late owing to an apparent error by the bank.

13.

The Hon’ble Madras High Court in [1981] 128 ITR 617 (Madras)/[1981] 21 CTR 333 (Madras)[01-09-1980] in Kumudam Publications (P.) Ltd. considered whether a cheque tendered before the due date but cleared afterwards constituted timely payment. The assessee tendered a cheque for advance tax of Rs. 4,30,500 on December 14, 1973, against a due date of December 15, 1973, and had sufficient funds in its account on the date of tender. Under the Treasury Rules, payment was deemed made when the cheque was handed to a Government official or officer authorised to receive it. The Court held that the payment was timely, as the subsequent delay in encashment was attributable to departmental officials. Although the decision concerned payment by account-payee cheque tendered with a challan to the banker, the same principle should apply to online payments initiated before the due date where sufficient funds are available and the payment subsequently clears, but the account is debited one day late for reasons beyond the assessee’s control.

14.

The banking transaction trail shows that the assessee tendered payment on 3 January 2025, before the due date, although it cleared in the bank statement only on 8 January 2025. We therefore find no delay in payment of tax. Even if the later clearance is treated as a delay, the date of tendering the challan, 3 January 2025, must be taken as the payment date in view of the two decisions cited above and the circulars and treasury rules considered therein. The learned departmental representative has not controverted these authorities.

15.

Accordingly, we direct the learned Assessing Officer to delete the interest charged of ₹1,81,79,890.

16.

In the result, the assessee’s appeal is allowed. Order pronounced in the open court on 21st October, 2026.

Sd/- Sd/- SOUNDARARAJAN K. PRASHANT MAHARISHI JUDICIAL MEMBER VICE PRESIDENT Bangalore Dated: 21.10.2026 *TNTS* Copy to: RUBRIK INDIA PRIVATE LIMITED 7TH FLOOR, BUILDING 9, 1 OUTER RING ROAD, KADUBEESANAHALLI, VARTHUR, BANGALORE RURAL, BENGALURU-560087, KARNATAKA INCOME TAX OFFICER TDS WARD 3(1), 2 HMT BUILDING, BENGALURU-560095, KARNATAKA 3 THE PCIT / CIT, 4 THE CIT(APPEALS) 5 THE D.R., ITAT, BANGALORE BENCH BY ORDER

ASSISTANT REGISTRAR I.T.A.T., BANGALORE Digitally signed P G by P G RAJANI Date: RAJANI 2026.10.30 16:35:15 +05'30'

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