TMI Blog2013 (4) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanations furnished by the assessee. For the sake of reference, we extract below the grounds of appeal in ITA No. 661/LKW/2011:- 1. Because the assessment order dated 16.08.2010 under challenged is against the fact and law. 2. Because, levy of interest for default u/s 201 (1-A) of Income Tax Act 1961 was wrong and that too without any valid reason. 3. Because interest is wrongly calculated for full month not for part of month as per the provision of clause-B of Rule-119-A of the Income Tax Rules, 1962. 4. Because, the Id. assessing officer below did not appreciate the evidence filed on record. 5. Because reply filed in response to show cause notice dated 20.03.2010 was not considered in a right manner. 6. Because Id. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit and can only be presumed to be the date on which it was cleared and entered in the receipt. Following Rule 20 (i) of Receipts and Payments Rule, the date of payment of TDS was taken to be 10.10.2007. the Assessing Officer accordingly levied interest on the delayed payment, against which an appeal was filed before the ld. CIT(A) and placed reliance upon certain case laws which were distinguished by the ld. CIT(A) and the ld. CIT(A) placed heavy reliance upon the Receipt and Payment Rule applicable w.e.f. 1.6.1983 and has come to a conclusion that the date of payment can only be 10.10.2007. Therefore, interest was properly levied. The relevant observations of the ld. CIT(A) are extracted hereunder:- 3.1.1. I have considered the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 201(1A) makes the payment of simple interest mandatory. The payment of interest under that provision is not a penal provision. There is therefore no question of waiver of such interest on the basis that the default was not intentional or on any other basis. It is further held in CIT v. Majestic Hotel Ltd. [2006] 155 Taxman 447 (Delhi) / CIT v. Munni Lal Co. [2006] 157 Taxman 466 (Raj.) that the question whether the assessee had any bona fide belief or reasonable cause for not making the deduction at source is wholly irrelevant to the question whether it is in default within the meaning of section 201. It is only for purposes of levy of a penalty as contemplated under section 201, read with section 221, that the sufficiency of reasons for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been made on the date on which it was handed over to the Government bankers. However, the issue has been discussed in the decision of the Authority for Advance Rulings in Y Ltd., In re [1996] 87 TAXMAN 59/221 ITR 172 (AAR, NEW DELHI) as well wherein relying on Rule 19(1)(c) and Rule 20(i) of the Receipts and Payments Rule, it has been held that the date of clearing and entering in the receipt scrolls is the date of payment to the Government account as Receipts and Payments Rules (and not Central Treasury Rules) are applicable w.e.f. 01.06.1983. The relevant finding is reproduced as under: The present situation was governed by the RPR and not the CTR with effect from 1-6-1983. There is a material difference between the two sets of ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uitable precaution to ensure that his cheque or draft reaches the bank or the departmental office concerned in good time, keeping in view the provisions of Rule 20 (i) and (ii). The bank, and or departmental office may at its discretion, refuse to accept- (i) cheques or drafts tendered on the last day to the former and on the last two working days to the latter respectively; and, or (ii) cheques or drafts which require clearance at the inter-bank clearing house before credit can be afforded to Government Account, if and when work of such clearing house disrupted or apprehended to get disrupted so as to impede realization of credit hereof by the due date. EXPLANATION. - for the purpose of this rule and Rule 20 working day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2007 and the decision relied upon is distinguishable as it has referred to the compilation of Treasury Rules which are not applicable for the year under consideration. Since the appellant had not paid the TDS in time, the interest was correctly levied. Hence, the grounds of appeal No.1 to 8 are rejected and the order of the Assessing Officer is hereby confirmed. 4. Now the assessee is in appeal before the Tribunal, but could not establish as to why the date which appears in the challan should not be taken as the actual date of deposit. We, however, carefully examined the order of the ld. CIT(A) and find that there was delay in deposit of TDS, therefore, the Revenue has rightly levied interest on the delayed period of payment. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X
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