[2015] 64 taxmann.com 212 (Hyderabad – Trib.)
The assessee in the present case is a company incorporated on 21.5.2010 for execution of BOT Road and Tunnel Project at Quazigund, Jammu and Kashmir. A survey under S.133A was carried out in the case of the assessee on 17.9.2012 to verify the compliance of TDS provisions. As found during the course of survey, the assessee company had purportedly deducted tax under S.194C and 194J and also remitted the same to the Government M/s. Navayuga Quazigund Expressway (P)Limited Hyderabad account. There was, however, delay in the said remittance, for which, according to the assessing officer, interest of Rs.32,28,121 was payable by the assessee under S.201(1A). Since interest under S.201(1A) only to the extent of Rs.17,84,625 was paid by the assessee, the assessing officer passed the order dated 23.11.2013, treating the assessee as liable for payment of balance interest under S.201(1A) amounting to Rs.14,43,496.
Against the order passed by the assessing officer under S.201(1)/201(1A), an appeal was preferred by the assessing officer before the learned CIT(A). During the course of appellate proceedings before the learned CIT(A), it was contended on behalf of the assessee that interest under S.201(1A) was computed by the assessing officer by considering part of the calendar month as full month, whereas such interest was chargeable by taking the month as a period of 30 days. The following example was also given by the assessee to support and substantiate its stand.
“……if we take the first transaction as an example:
Date of payment – 04.04.2011
Due date of remittance – 07.05.2011
Actual date of remittance – 01.06.2011
(c) The assessing officer charged interest for three calendar months as under:
05.05.2011 to 30.04.2011 – One month
01.05.2011 to 31.05.2011 – One month
01.06.2011 – One month
(d) The appellant’s version is sicne the interest is compensatory in nature, which is levied on late remittance of tax deducted, the basis should be a month of 30 days period as under:
05.04.2011 to 30.04.2011 – One month
05.05.2011 to 01.06.2011 – One month
Total Two months
The issue involved in this appeal relates to the computation of interest payable by the assessee under S.201(1A), the provisions of which read as under-
