The Income Tax Appellate Tribunal (ITAT), Kolkata has held that the assessee cannot be penalized for the fault of glitches on the income tax portal and therefore, deleted the interest for non-remittance of TDS amount by the bank to the Government since the same was deposited by the assessee within the due date.
The Assessing Officer levied interest for late payment of TDS on the assessee, M/ss National Insurance Co. Ltd., on the ground that there is a delay in remitting the TDS deposit.
The assessee contended that the Income Tax Department has authorized certain banks to collect TDS on their behalf. The Bank of Baroda being one of the authorized banks, thus, has acted as an agent of the Income Tax Department.
Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member observed that the assessee deposited the TDS with the bank, the bank being an agent of the Income Tax Department, the amount is deemed to have been received by the principal i.e. Income Tax Department. The bank has issued letter in this respect that the amount was duly deposited by the assessee before the due date and that there was no default on the part of the assessee.
Quashing the levy of interest, the ITAT held that “Moreover, though the Income Tax Department and other Government Organisations have shifted to the online system, however, the said system is in the developing stage and often there are technical glitches faced due to which certain acts of uploading of forms etc and as in the present case, the remittance of the amount by the bank to the account of the department are being faced, which are beyond the control of the concerned assessee or the person who is supposed to upload such information, form or to remit the amount, as the case may be. This type of technical glitches is beyond the control of concerned assessee/person for which the concerned assessee cannot be penalised.”
“The facts in this case are apparent that the assessee had deposited the amount with the authorized bank within the due date, however, due to technical glitch the bank could not remit the amount immediately to the account of the department and there occurred a delay of one day because of which the assessee cannot be burdened with levy of interest u/s 201(1A) of the Act. The assessee cannot be burdened because of not doing an act which was beyond his control. Even otherwise, as observed above, the Bank has accepted the payment being agent of the Income Tax Department, and the assessee has deposited the payment with the bank before the due date. In view of this, the impugned levy of interest by the lower authorities is set aside,” the ITAT said.
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