Resolve Salvage & Fire India Private Limited Vs DCIT (ITAT Mumbai)
Summary: The assessee appealed against the order dated 26/11/2018 passed by the Commissioner of Income-tax (Appeals)-22, Mumbai for assessment year 2015-16, challenging the disallowance of interest paid on late payment of TDS. During assessment proceedings, the assessee submitted on 10/11/2017 that it had paid interest of Rs.1,61,33,389/- on late payment of TDS and claimed that the interest was compensatory in nature and allowable as a deduction. The Assessing Officer rejected the claim, observing that interest under section 201(1A) or section 206C(7) was penal in nature and relying upon Goetze India Limited vs CIT 284 ITR 323 (SC) regarding claims not made through a revised return.
The CIT(A) treated the fresh claim as legal in nature but disallowed it on merits, relying upon Ferro Alloys Corporation Ltd vs CIT (1992)196 ITR 406 (Bom) and CIT vs Chennai Properties and Investment Ltd (1999) 239 ITR 435 (Mad). Before the Tribunal, the assessee submitted that TDS represented tax of the third party on whose behalf it was deducted and paid to the Government and did not represent the assessee’s own income-tax. Reliance was placed on STUP Consultants Pvt Ltd vs Addl.CIT in ITA No.5827/Mum/2012, CIT vs Jet Airways (India) Ltd (2016) SCC OnLine (Bom) 2112, Arthur Anderson & Co. vs ACIT (2010) 324 ITR 240 (Bom) and other decisions.
