The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ), while waiving off the interest levied by the income tax department for short-levy of TDS, has held that interest cannot be levied for one delay in debiting amount from the bank due to the mistake of the Banker.
The assessee-Company, M/s Natma Securities Limited is a non-banking Finance Company, engaged in acceptance of inter-corporate deposits. During the Financial Year 2012-13, the assessee Company has accepted inter-corporate deposits to the tune of Rs. 363 crores upon which provision for interest was made for Rs. 31,62,69,531/- against which the TDS for Rs. 3,16,26,953/- was provided @ 10% u/s 194A of the Income Tax Act, 1961.A demand under section 201/201(1A) has been generated by the CPC which has been sought for rectification under section 154 of the Act by the assessee and the Ld. Assistant Commissioner of Income Tax has dismissed the application for rectification filed u/s 154 of the Act vide order dated 31/03/2017.
The question before the ITATwas as to ‘whether the payment would be deemed to have been made on the date of handing over of cheque to the banker or on the date of clearance of cheque by debiting the Assessee’s account for the purpose of tendering the TDS’.
Dr. B. R. R. Kumar, Accountant Member and Sh. Yogesh Kumar U.S., Judicial Member observed that “In the instance case, there is One day delay in debiting the amount from the Assessee’s bank account which is apparently due to the mistake to the banker. Further by relying on the ratio laid down in the case of Standard Chartered Bank (Supra) we are of the opinion that the payment of TDS by the assessee would relate bank to the date of presentation of the cheque i.e. on 31/07/2013 by the assessee to the banker.”
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