TMI Blog2012 (7) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per Bhavnesh Saini, J.M.: Both the appeals by the above assessees are directed against different orders of the ld. CIT(A), Gwalior dated 22.07.2011 for the assessment year 2008-09, challenging the demand of interest u/s. 201(1A) of the IT Act amounting to Rs.69,810/- and Rs.42,258/- respectively. 2. Both the assessees challenged the order of the AO passed u/s. 201(1A) of the IT Act before the ld. CIT(A), whereby the interest has been charged on the assessee on account of late deposit of TDS for different quarters of the financial year under consideration. During the course of proceedings before the AO, the assessee has submitted explanation for late deposit of TDS on account of time involved in bank clearing, government holidays etc., which has not been accepted by the AO. It was submitted before the ld. CIT(A) that the assessees are societies and do not fall in Government Department category and it was also explained that as per the Govt. Scheme, the assessee is developing roads and the entire amount is given by the Central Government through the authorized banks. Therefore, there was no mala fide intention of not depositing the tax deducted at source wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable by considering the delay in deposit of payment of TDS for two months instead of one month. Consequently, the demand of excess interest is raised. Therefore, the excess demand of interest is unjustified under law. He has referred to page 3 of the appellate order of both the impugned orders and highlighted that the due date of deposit of tax for May, 2007 was 07.06.2007 and the amount of tax was deposited on 18.06.2007. Therefore, the delay in deposit of tax was only 11 days, but the AO took it as 60 days and the ld. CIT(A) wrongly confirmed the order of the AO. He has submitted that though the ground of appeal is not properly worded, but the assessee challenged the order of the ld. CIT(A) in confirming the order of the AO for excess demand of interest for two months instead of one month. He has further submitted that the ld. CIT(A) has not discussed this issue in the appellate order. In principle, he has admitted that the assessee is in default of payment of taxes within the time as per law, but submitted that due to clearing time of cheques and government holidays, there was delay in deposit of TDS. Therefore, the assessee is not liable for excessive interest and recalcula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of IT Act and Rules dealing with the aforesaid subject : 5.1 Section 201(1A) of the IT Act provides as under : [(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest, (i) at one per cent for every month or part of a month on the amount of such tax from the date on which such tax was deductible to the date on which such tax is deducted; and (ii) at one and one-half per cent for every month or part of a month on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid, and such interest shall be paid before furnishing the statement in accordance with the provisions of sub-section (3) of section 200:] [ Provided that in case any person, including the principal officer of a company fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing contained in sub-rule (2), in special cases, the Assessing Officer may, with the prior approval of the Joint Commissioner, permit quarterly payment of the tax deducted under section 192 or section 194A or section 194D or section 194H for the quarters of the financial year specified to in column (2) of the Table below by the date referred to in column (3) of the said Table: TABLE Sl. No. Quarter of the financial year ended on Date for quarterly payment (1) (2) (3) 1. 30th June 7th July 2. 30th September 7th October 3. 31st December 7th January 4. 31st March 30th April B. Mode of payment (4) In the case of an office of the Government, where tax has been paid to the credit of the Central Government without the production of a challan, the Pay and Accounts Officer or the Treasury Officer or the Cheque Drawing and Disbursing Officer or any other person by whatever name called to whom the deductor reports the tax so deducted and who is responsible for crediting such sum to the credit of the Central Government, shall (a) submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x that with the Central Government, but it was paid belatedly. The assessee in its appeals before the ld. CIT(A) also only challenged the interest payable for two months instead of one month. Therefore, in principle, it is admitted fact that the assessee was liable to deduct tax at source and since the assessee did not deposit the TDS within time, therefore, the interest was levied against the assessee u/s. 201(1A) of the IT Act, which is mandatory in nature as is also held by the Hon ble Calcutta High Court in the case of West Bengal Electricity Board (supra). The provisions of section 201(1A)(ii) of the IT Act, as reproduced above, also put the assessee on liability for payment of interest at the specified rate on the amount of such tax from the date on which such tax was deducted to the date on which such tax is actually paid. Similarly, according to section 200 of the IT Act, the assessee shall have to pay and deposit the amount of TDS at the credit of Central Government, as the Board may prescribe. Rule 30 of the IT Rules noted above, also provides the modes of payment of tax deducted with the provisions of Chapter XVII by paying the amount of tax to the credit of the Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication for admission of additional ground is, accordingly, rejected. However, on consideration of the submissions of the ld. counsel for the assessee that excessive interest has been charged, we find that the contention of the ld. counsel for the assessee have some points to argue because as per the schedule noted at page 3 of the appellate orders, we find that there may be some mistake in calculating the excessive interest as is demonstrated by the ld. counsel for the assessee on examining the payment of tax for the month of May, 2007 because the delay is apparently of 11 days but the AO treated the default for 60 days. This was the only submission made by the assessee in the grounds of appeal, which has not been addressed by the ld. CIT(A) while deciding the appeals of the assessee. Therefore, to that extent, the matter requires reconsideration at the level of the ld. CIT(A). 6. Considering the above discussion, we confirm the orders of the authorities below in levying interest against the assessee u/s. 201(1A) of the IT Act, which is mandatory in nature for violation to deposit TDS with the Government of India within the prescribed time. However, the matter relating to char ..... X X X X Extracts X X X X X X X X Extracts X X X X
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