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2015 (3) TMI 1083 - ITAT HYDERABAD

2015 (3) TMI 1083 - ITAT HYDERABAD - TMI - Interest charged under S.201(1A) - AO taking the period of delay on the basis of calendar month instead of month of 30 days as claimed by the assessee - Held that:- In the present case, clause (ii) of S.201(1A) read with Clause (b) of Rule 119A is applicable and it provides that where the interest is to be calculated for every month or part of a month comprised in a period, any fraction of a month shall be deemed to be a full month, and the interest sha .....

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e Assessing Officer as well as the learned CIT(A), the Tribunal allowed the same. When the matter was carried before the Hon’ble Gujarat High Court in an appeal filed by the Revenue, Their Lordships held that a reading of sub-section (1) of S.244A, the relevant provisions of which are analogous to the provisions of clause (ii) of S.201(1A) read with Rule 119A, would make it clear that the term ‘month’ must be given the ordinary meaning of the term of 30 days period and not the British calendar m .....

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AP, ACCOUNTANT MEMBER AND SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER For The Appellant : Shri V.Raghavendra Rao For The Respondent : Shri Rajat Mitra, DR ORDER Per P.M.Jagtap, Accountant Member : This appeal filed by the assessee is directed against the order of the learned Commissioner of Income-tax (Appeals) II, Hyderabad dated 6.8.2014, whereby he confirmed the interest charged by the Assessing Officer under S.201(1A) of the Act, as computed by the Assessing Officer by taking the period of dela .....

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e to the Government account. There was, however, delay in the said remittance, for which, according to the assessing officer, interest of ₹ 32,28,121 was payable by the assessee under S.201(1A). Since interest under S.201(1A) only to the extent of ₹ 17,84,625 was paid by the assessee, the assessing officer passed the order dated 23.11.2013, treating the assessee as liable for payment of balance interest under S.201(1A) amounting to ₹ 14,43,496. 3. Against the order passed by th .....

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rt and substantiate its stand. ……if we take the first transaction as an example: Date of payment - 04.04.2011 Due date of remittance - 07.05.2011 Actual date of remittance - 01.06.2011 (c) The assessing officer charged interest for three calendar months as under: 05.05.2011 to 30.04.2011 - One month 01.05.2011 to 31.05.2011 - One month 01.06.2011 - One month (d) The appellant s version is sicne the interest is compensatory in nature, which is levied on late remittance of tax deduct .....

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rest is to be calculated for every month and any fraction of the month shall be deemed to eb full month. It is also pertinent to mention that under S.244A, the income tax department pays interest to the assessee, the interest is to be calculated on refund as per Rule 119A, therefore, even though the rate of interest collected by the Department and paid by the department vary, the period considered. For computing the interest is same in both the cases, when the department is collecting as well as .....

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r is not a speaking order. Further, there is no merit in saying that the Assessing Officer did not specify the method of calculation of interest u/s. 201(1A). This calculation sheet, the assessee could have easily obtained from the Assessing Officer by making a request. It is pertinent to mention that the appellant himself produced a copy of interest calculation u/s 201(1A) as mentioned at para 3.1(a). 3.7 In view of the above discussion, the month referred in Rule 119A refers to calendar month .....

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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 deduction 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 percent 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 mont .....

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f a resident but is not deemed to be an assessee in default under the first proviso to sub-section (1), the interest under clause (i) shall be payable from the date on which such tax was deductible to the date of furnishing of return of income by such resident: The procedure to be followed for calculating the interest payable by the assessee or by the Central Government is given in Rule 119A of Income-tax Rules, 1962 as under 119A. In calculating the interest payable by the assessee or the inter .....

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onth comprised in a period, any fraction of a month shall be deemed to be a full month and the interest shall be so calculated; (c) the amount of tax, penalty or other sum in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred rupees and for this purpose any fraction of one hundred rupees shall be ignored and the amount so rounded off shall be deemed to be the amount in respect of which the interest is to be calculated. 6. In the present .....

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