The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the interest for late deposit of Tax Deducted at Source (TDS) against the Central Bank of India as the late deposit of TDS was in compliance with interim injunction order during the pendency of writ petition.
The assessee, Central Bank of India deducted TDS amount from arrears of employees in March 2011 and the same had been remitted to the Income Tax Department on 10/04/2013, the A.O. charged interest. The assessee filed an application under Section 154 read with Section 200A of the Income Tax Act which had been dismissed by the Deputy Commissioner of Income Tax (DCIT) dated 31/12/2013.
Aggrieved by the order under Section 154 of the Income Tax Act, the assessee filed an appeal before the Commissioner of Income Tax Appeals (CIT(A)), the CIT(A) dismissed the appeal filed by the assessee vide order dated 17/02/2015 wherein the CIT(A) held that the assessee was guilty of late deposit of TDS in Government Account and opined that the interest charged was justifiable.
Sunil Kumar, on behalf of the assessee submitted that the assessee had not deposited the TDS on time in compliance with the interim order of the Madras High Court in Writ Petition No. 8102/2011 and though the interim order was in operation during the pendency of the said writ petition, the assessee inadvertently deposited the TDS but the A.O. without considering the effect of Interim Order of the Madras High Court, had erroneously levied interest on the assessee.
He further, submitted that the assessee was having sufficient cause for not depositing the TDS on time due to the Interim Order passed by the Madras High Court and the authorities had committed an error by charging interest for late deposit of TDS for Assessment Year 2011-12, therefore, prayed for allowing the Appeal.
Vivek Upadhyay S, on behalf of the revenue, relied on the orders of the revenue authorities and sought for dismissal of the Appeal.
The two-member Bench of N. K.Billaiya, (Accountant Member) and Yogesh Kumar U.S., (Judicial Member) allowed the appeal filed by the assessee considering the fact that there was an interim order dated 29/03/2011 in operation as on the date of remittance TDS, thus, in our opinion, there was sufficient cause for the assessee not to remit TDS amount and the authorities ought not to have charged the interest on the Assessee, accordingly the Bench set aside the order of the CIT(A) by deleting the interest levied on the Assessee by the Revenue for late payment of TDS amount.
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