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Income Tax Appellate Tribunal, MUMBAI BENCHES “F”, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI S. RIFAUR RAHMAN
O R D E R
PER SAKTIJIT DEY, JM
This is an appeal by the assessee against the order dated 27.03.2018 of learned Commissioner of Income Tax (Appeals)-60, Mumbai for the assessment year 2009-10.
2. When the appeal was taken up for hearing, none appeared on behalf of the assessee to represent the case. On perusal of record, we find that the appeal was fixed for hearing on 17.07.2019. However, neither anyone appeared on behalf of the assessee nor any request for adjournment was made. Thereafter, though, the appeal was fixed for hearing on various occasions, however, the situation did not improve and the assessee always remained Assessment Year: 2009-10 absent. The aforesaid facts clearly reveal lack of interest by the assessee in pursuing the appeal. In view of the aforesaid, we proceed to dispose of the appeal ex-parte qua the assessee after hearing the learned Departmental Representative and based on materials on record. 3. The effective grounds raised by the assessee are as under:- 1. “That having regard to the facts & circumstances of the case, the Ld. CIT (A) has erred in facts & laws of the case by confirming the action of Ld. AO for levy of interest u/s 201(1A) of the IT Act, 1961 amounting to Rs. 273054/- for alleged delay in deposing the TDS to the credit of the Department within the prescribed time.
That having regard to the facts & circumstances of the case the Ld. CIT (A) 60- Mumbai, has erred in not considering & distinguishing the judgments of Hon‟ble Gujarat High Court in the case of KanGold (India) Ltd. v/s CIT (1999) 239 ITR 814 & ITAT Lucknow Bench „B‟ in the case of ICICI Bank Ltd. ITA No. 11/Lkw/11.”
Briefly the facts are, the assessee is a Branch of the Jammu & Kashmir Bank Ltd. and is engaged in the business of banking. Based on the TDS return filed by the assessee in Form 26Q, the Assessing Officer (AO) initiated proceeding under section 201 of the Income Tax Act, 1961. As observed by the AO, the assessee did not respond to the show cause notice issued under section 201(1)/201(1A) of the Act. Accordingly, he proceeded to pass order raising demand of Rs. 3,52,670/- comprising of TDS and interest thereon. Against, the aforesaid order passed by the AO, assessee preferred an appeal before learned Commissioner (Appeals). Rejecting assessee’s submissions, learned Commissioner (Appeals) upheld the demand raised by the AO. Assessment Year: 2009-10 However, taking note of correction statement generated through system, the demand was reduced to Rs. 2,73,054/-.
We have considered the submissions of learned Departmental Representative and perused the materials on record. It is evident, before the First Appellate Authority, the assessee had submitted that though it had deducted tax at source amounting to Rs. 3,22,70,071/- and issued payment order No. 085301 dated 04.07.2008 favoring Reserve Bank (RBI) of India a/c TDS towards remittance of the TDS amount to the Government account, which was deposited with the RBI on 04.07.2008. However, it was presented and collected by RBI on 07.07.2008. Thus, the delay in remitting the TDS to Government account was due to RBI. As could be seen, the aforesaid submission of the assessee did not find favour with learned Commissioner (Appeals). Ignoring the fact that the assessee has deposited the TDS amount through a pay order in time, learned Commissioner (Appeals) has held that since the amount was credited to the Government account after due date, the assessee is liable for payment of interest under section 201(1A) of the Act. 6. On a reading of section 201(1A)(ii), which is applicable to the assessee, it is seen that interest at the prescribed rate would be chargeable from the date on which such tax was deducted to the date on which such tax is actually paid. If, we consider the expression “actually paid” in the context of the facts involved in the present appeal, there cannot be any doubt that the assessee has actually paid the TDS amount within the due date by deposing it with the RBI through a pay order. Thus, the assessee has discharged its statutory obligation in time. The delay in remittance to the Government account is not Assessment Year: 2009-10 attributable to the assessee. The documentary evidences furnished by the assessee before learned Commissioner (Appeals) clearly established that it is the RBI, who presented the pay order for collection with delay. Therefore, since the delay in remittance of TDS to the Government account is not because of any laches or negligence of the assessee, it cannot be saddled with interest under section 201(1A) of the Act. Keeping in view the aforesaid factual position, the assessee cannot be treated as the assessee in default under section 201(1) so as to levy interest under section 201(1A) of the Act. Further, the ratio laid down by Hon’ble Gujarat High Court in case of KanGold India Ltd. vs. CIT