TMI Blog2022 (1) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) of the I.T.Act without disposing of the assessee s grounds on merits. Hence, we deem it appropriate to restore this issue to the files of the CIT(A) in the interest of justice and equity. The CIT(A) is directed to afford a reasonable opportunity of hearing to the assessee before he dispose of this issue. It is ordered accordingly. Interest on delayed payment of service tax - AO held the same is not an allowable expenditure u/s 36 nor 37 as interest payable is not permissible for deduction u/s 37 of the I.T.Act since it is a default committed by the assessee in discharge of its statutory obligation - HELD THAT:- Separate sections govern the penal and interest consequences on delay in payment of service tax. This being the case, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, we direct the A.O. to allow deduction - Decided in favour of assessee. - ITA No.1872/Bang/2018 - - - Dated:- 7-1-2022 - Shri George George K, JM And Shri B.R.Baskaran, AM For the Appellant : None For the Respondent : Sri.Nischal B, Addl.CIT-DR ORDER PER GEORGE GEORGE K, JM : This appeal at the instance of the assessee is directed against CIT(A) s order dated 18.12.2017. The relevant assessment year is 2014-2015. 2. There is a delay of 100 days in filing this appeal. The assessee has filed a petition for condonation of delay and an affidavit of the Director of the assessee stating therein the reasons for belated filing of this appeal. On perusal of the reasons stated for belated filing of the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I.T.Act, for the reason that the assessee has not earned any exempt income during the relevant assessment year. However, the CIT(A) sustained the alternate disallowance u/s 36(1)(iii) of the I.T.Act. According to the CIT(A), the assessee has not challenged the alternative addition in appeal before him. 4.2 Aggrieved, the assessee has raised this issue before the Tribunal. None was present on behalf of the assessee. However, we proceed to dispose of the matter after hearing the learned Departmental Representative. The learned DR strongly supported the orders of the Income Tax Authorities. 4.3 We have heard the learned DR and perused the material on record. The CIT(A) deleted the addition u/s 14A of the I.T.Act for the reason th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appellate authority. The CIT(A) confirmed the view taken by the Assessing Officer. 5.2 Aggrieved, the assessee has raised this issue before the Tribunal. 5.3 We have heard learned DR and perused the material on record. During the relevant assessment year, the assessee had made payment of interest in respect of delay in payment of service tax. Section 75 of the Service Tax Laws imposes interest for delayed payment of service tax. Section 76 provides for imposition of a proportionate penalty for failure to pay the tax within the due date. Section 78 provides for levy of a penalty where the service tax has not been paid on account of fraud, collusion, mis-statement, etc. with an intention of evasion of service tax. As can be discerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g authorities for determination of the liability of interest. (iv) A separate recovery mechanism is not required for recovery of the interest on arrears of cess. 5.4 On the above basis, the Hon ble Court held that interest for arrears of a statutory levy should be treated with the same yardstick as that of the levy itself and hence in the facts of that case, the interest was eligible for deduction u/s 37 of the Act. The above view is supported by the following judicial pronouncements:- (i) Prakash Cotton Mills Pvt. Ltd. v. CIT (1993) 201 TTS 684 (SC). (ii) CIT v. Messee Dusseldorf India (P) Ltd. (2010) 129 TTJ 81 (Del) (iii) Remfry Sagar Consultants Pvt. Ltd. v. ACIT ts-540- itat-2012 (HYD) (iv) CIT v. Luxmi Devi Sugar M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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