TMI Blog2011 (6) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... y the revenue and the cross objection filed by the assessee are directed against the order of the CIT (A) LTU, Bangalore dated 12.04.2010. The relevant assessment year is 2007-08. 2. The revenue has raised the following grounds of appeal:- 1) The learned CIT (A) has erred in holding that the provisions of section 234C are not attracted even though the cheques were realized after the due dates for payment of advance tax even though the assessee had deposited the cheques in the bank within time. 2). The learned CIT (A) has erred in relying judgment which were relating to the period in which the Central Government Treasury rules were in operation. These rules were replaced by Central Government Account (Receipts and Payments) rules, 1983 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.03.2007 17,500,000 14.3.2007 16.3.2007 Total 80,000,000 4. As against intimation, the assessee filed a rectification application, which was dismissed and being aggrieved, the assessee carried the matter before the first appellate authority. 5. The CIT (A) for her elaborate reasoning mentioned in para 3.1 of the order, allowed the appeal of the assessee. The relevant finding of the CIT (A) reads as follows:- Inview of the foregoing analysis, on account of the fact that the CB~T Circular No.261 dt.08.08.1979 clarifying that the date of payment would relate back to the date of presentation of the cheque if the cheque is honoured on presentation has not been withdrawn and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the jurisdictional High Court and the Bangalore Bench of the Tribunal. 6.2 In the case of Sahara Airlines Ltd. v Commissioner of Customs (Appeals) 110 Taxman 0378 (Kar.), it has been held that upon tendering of a cheque, if it is not dishonoured, it shall be deemed that payment has been made on the date when it was handed over to the Government s banker. The relevant finding of the Hon ble High Court reads as follows:- A harmonious reading of these provisions makes it clear that government dues can be presented in the form of cheque into the accredited bank. Upon tendering of a cheque, if it is not dishonored later, it shall be deemed that payment has been made on the date when it was handed over to the government s bankers. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le framing the assessment for the year under reference, the Income Tax Officer did not determine the interest payable by the Department to the assessee as contemplated u/s 214 of the Act. 6.4 In the appeal before the Appellate Assistant Commissioner, the assessee submitted that the Income Tax Officer should have determined and paid interest to the assessee in respect of the installment of advance tax paid by way of cheque on September 13, 1974. The Appellate Assistant Commissioner, however, held that since the assessee ought to have paid the installment on September 15, 1974, it was not entitled to any interest u/s 214. According to the Appellate Assistant Commissioner, the date of handing over the cheque to the Income Tax Officer was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her reliance was placed on the Board Circular No.261 dt.8.8.79 and the decision of the Supreme Court in the case of LJCO Bank in 238 ITR 88A. Looking to the aforesaid decisions, we find that it is a settled law that the date of presentation of the cheque should be treated as the date of payment of tax, inspite of the fact that some time was requiredfor realization of the cheque . 7. In the light of the above finding of the Hon ble jurisdictional High Court and the Tribunal, we hold that the date of presentation of the instrument is to be reckoned while calculating interest u/s 234C of the Act. 8. In the result, the appealfiled by the assessee is allowed 8.1 in the instant case, admittedly, the cheques were presented and deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X
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