TMI Blog2021 (6) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... he reason for seeking rectification based on CBDT Circular. Therefore, the CIT(A) has erred in not examining the petition of assessee in entirety. We hold that the rectification petition under section 154 of the Act for seeking correction in the date of deposit of TDS amounts was maintainable in its present form. The ground No.1 raised in appeal by the assessee, is thus, allowed. Where the TDS amount has been deposited to the Government Exchequer thorough cheque, whether the date of tendering cheque to the Government s Banker or the date of realization of the cheque is the date of actual payment - The Hon'ble Supreme Court of India in the case of CIT vs. Ogale Glass Works Ltd., [ 1954 (4) TMI 3 - SUPREME COURT ] held that where the payment is made by cheque, the date of payment would be date of delivery of cheque, provided the cheque is honoured on presentation to the bank. Thus the date of payment to Government exchequer through cheque shall be the date of tendering/depositing the cheque, subject to cheque being honoured on presentation. After taking into consideration the facts of instant case and the decisions discussed above, we hold that the TDS deducted under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Corporation Act, 1888, to administer civic affairs of Mumbai city. During the period relevant to assessment years under appeal, the assessee had made payments to contractors and employees after deducting tax at source under section 194C and 194J of the Act. The assessee tendered Tax Deducted at Source (TDS) for each quarter to the Government Exchequer by way of cheque. The TDS amounts were deposited before the due date. Later, the assessee discovered from TRACES Portal that demands were raised for different quarters falling in Financial Years 2010-11 and 2011-12. The assessee did not receive original intimations, under section 200A of the Act for the quarters under dispute, barring few. The intimation received from the DCIT (TDS)-1(3), Mumbai (Assessing Officer) were not the original intimations but were the rectified orders. After examining intimations, it transpired that interest under section 201(1A) of the Act has been levied for delay in deposit of TDS amounts. The assessee filed rectification petition under section 154 of the Act to delete the interest as the payments were made through cheque before due date. It was specifically urged that as per CBDT Circular, the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bankers. The above decision was rendered after considering Compilation of the Treasury Rules (in short CTR ) and the Central Government Account (Receipts Payment) Rules 1983 (in short the R P Rules ). Sh. Mehta asserted that Circular No. 261 (supra) is still effective as the same has not been withdrawn by the CBDT till date. The CIT(A) has erred in holding that after introduction of R P Rules w.e.f. 01/6/1983, CTR and Circular No.261 would no longer be applicable. 3.3. The ld. Authorized Representative of the assessee submitted that the CIT(A) has erred in holding that rectification petition filed by assessee under section 154 was not amenable. The CIT(A) has erred in recording that the application under section 154 was made by the assessee for seeking rectification in the date of challan. The ld. Authorized Representative of the assessee pointed that the rectification petitions filed under section 154 of the Act are at page 1 to 25 of the Paper Book. It has been categorically stated in the petition that the assessee is seeking rectification in the date for considering date of payment/deposit of TDS. It was pointed that the date of tendering cheque should be considered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quarters. It is an accepted fact that the assessee had tendered cheques for deposit of TDS collected under section 194C and 194J of the Act on or before the due date. The cheques deposited by the assessee were duly realized on presentation. For the sake of completeness the relevant dates are tabulated herein below: Section Tax Deducted (in Rs.) Date of Deposit of Cheque Due Date Date of realization of Cheque 194J 3,34,815/- 06/8/2011 08/8/2011 09/8/2011 194C 1,63,55,074/- 06/8/2011 08/8/2011 09/8/2011 7. The first issue for our consideration is maintainability of rectification petition filed by the assessee under section 154 of the Act. The assessee had filed rectification petition seeking correction in the date of tendering/deposit of challans along with cheque. The prayer of the assessee was to consider date of tendering/deposit of cheque in the bank as deemed dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsustainable. 8. The CIT(A) has relied on the decisions of Tribunal in the case of ICICI Bank Ltd. (supra), and GM, MPRRDA, PIU, Shivpuri vs. ITO(TDS) (supra) to hold that the date of realization of cheque is the date of payment. The CIT(A) s reliance on the aforesaid decisions to conclude that the issue is debatable is misplaced. We observe that in both aforesaid cases, ostensibly, CBDT Circular No.261 (supra) was not brought to the notice of Bench. Thus, while rendering aforesaid decisions, the Bench was oblivious to Board Circular binding on the Department. 9. We further observe that the CIT(A) in impugned order has only referred to the title (subject) of rectification petition and has not examined the contents of the petition. Para 2 of the petition clearly states the reason for seeking rectification based on CBDT Circular. Therefore, the CIT(A) has erred in not examining the petition of assessee in entirety. We hold that the rectification petition under section 154 of the Act for seeking correction in the date of deposit of TDS amounts was maintainable in its present form. The ground No.1 raised in appeal by the assessee, is thus, allowed. 10. The second issue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the Tribunal was right in holding that the date of presentation of cheque in the bank is to be reckoned as the date of payment of advance tax and not the date on which the cheque is cleared and entered in the receipt roll as required under Rule 20 of the Central Government Account (Receipts and Payments) Rules 1983, for the purpose of calculating interest under Section 234C of the Income Tax Act? The Hon ble High Court after considering the judgment rendered in the case of CIT vs. Ogale Glass Works Ltd. (supra) and Raunaq Education Foundation (supra) held that once cheque issued by the assessee is encashed, the payment relates back to the date of receipt of cheque. Here it would not be out of place to mention that the Hon ble High Court decided the issue of date of payment of advance tax after considering R P Rules, 1983. 14. The Co-ordinate Bench of Tribunal in the case of ONGC vs. DCIT (supra) after considering CBDT Circular No.261 (supra) and the Central Government Account (Receipts Payments) Rules 1983 and catena of judgments on this issue held that the date of tendering cheque shall be deemed to be the date of deposit. The relevant extract of the Tribunal or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As per which the date on which a cheque or a draft is cleared is to be deemed as the date of making of the payment by a person towards government dues etc. However, at the same time we cannot remain oblivious of the fact that the CBDT Circular No. 261[F.No.385/6I/79-TT(B)], dated 08.08.1979 had not been withdrawn, and as such holds the ground as on date. Rather, it would be relevant to point out that the CBDT in all its wisdom had not even modified the Circular No. 261. dated 08.08.1979 which was issued prior to the Central Government Account (Receipt and Payments) Rules, 1983 . Be that as it may. the aforesaid 'benevolent circular' viz. Circular No. 261, dated 08.08.1979 issued by the CBDT on the date of tendering of the cheque by the assessee towards the amount of TDS to the government bank, did hold the ground and was thus binding on the revenue. We are unable to persuade ourselves to subscribe to the observations of the CIT(A), that as the Central Treasury Rules (Old Rules) had been rendered as redundant, therefore, the CBDT Circular No. 261. dated 08.08.1979 would therein follow and also has to be taken as having been rendered as otiose. [Emphasized by us] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest under section 201(1A) of the Act for alleged delay in deposit of TDS amount is chargeable to the assessee. The interest levied under section 201(1A) of the Act is directed to be deleted. The assessee succeeds on ground no.2 of the appeal. 18. In the result, impugned order is set aside and the appeal of assessee is allowed. ITA No. 1025 TO 1031/Mum/2019 Appeal ITA No. Assessment Year/Quarter 1025/Mum/2019 2012-13 (26Q-Q2) 1026/Mum/2019 2012-13 (26Q-Q3) 1027/Mum/2019 2012-13 (26Q-Q3) 1028/Mum/2019 2012-13 (26Q-Q4) 1029/Mum/2019 2011-12 (26Q-Q4) 1030/Mum/2019 2012-13 (26Q-Q3) 1031/Mum/2019 2012-13 (26Q-Q2) 19. We find that identical grounds have been raised by the assessee in all these appeals. Both sides are unanimous in stating that facts germane to the issue in all these appeals are identica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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