Payment of TDS would relate back to the date of presentation of cheques to the banker: ITAT directes TDS-CPC to re-compute interest payable by Standard Chartered Bank

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that payment of TDS would relate back to the date of presentation of cheques to the banker and directed  TDS-CPC to re-compute interest payable by Standard Chartered Bank.

The assessee, Standard Chartered Bank received an intimation under section 154 of Act, 1961 from TDS-CPC vide order dated June 20, 2015. This intimation processed the correction TDS statement in Form 24Q for Q-1 of financial year 2007-08 filed by the assessee on June 18, 2015.

In the intimation, the assessee has been charged with the interest of Rs.42,09,766/- on account of late payment of tax under section 201(1A) and another interest of Rs.1,68,388/- under section 220(2) of Act. The total interest demand thus raised against the assessee aggregated to Rs.43,78,154/-.

The assessee challenged the interest demand before CIT(A) by submitting that TDS of each month was deposited on or before the stipulated date of seventh of succeeding month as prescribed under section 200 of the Act read with Rule 30 of Income Tax Rules, 1962 and therefore, the question of levy of interest under section 201(1A) would not arise.

The CIT(A) noted that there was a difference in tendering of challans by the assessee to SBI and date of clearing or stamping on the challan. Going by the wordings of Section 201(1A) (ii) which used the expression actually paid, it was held that interest was to be levied from date of deduction to the date on which such tax was actually remitted to the credit of the Government.

The Tribunal consists of Judicial Members, C.N. Prasad, and an Accountant member, Manoj Kumar Aggarwal held that the payment of TDS by the assessee would relate back to the date of presentation of cheques by the assessee to the banker.

Accordingly, the tribunal directed TDS-CPC, Ghaziabad to revise the aforesaid intimation by taking the date of tender of cheques by the assessee as the actual date of payment and re-compute interest payable by the assessee, if any. The interest demand under section 220(2) being consequential in nature, may also be recomputed.