ITAT Delhi held that interest on late deposit of TDS deleted as assessee was having sufficient cause for not depositing the TDS on time due to the Interim Order passed by the Hon’ble Madras High Court.
Facts- The assessee deducted TDS amount from arrears of employees in March 2011 and the same had been remitted to the IT Department on 10/04/2013, the A.O. charged interest of Rs. 1,69,962/-. The assessee filed an application u/s. 154 read with Section 200A of the Act which had been dismissed by the DCIT dated 31/12/2013.
CIT(A) dismissed the appeal filed by the assessee. Being aggrieved, the present appeal is filed.
Conclusion- Held 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 Grounds of the Appeal of the assessee is allowed and the interest levied on the Assessee by the Revenue for late payment of TDS amount is deleted.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-41, New Delhi [“Ld. CIT(A)”, for short], dated 17/02/2015 for Assessment Year 2011-12. Grounds taken in this appeal are as under:
“1. That on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals), (CIT(A)) erred in law in upholding the order passed by the Assessing Officer so far it relates to the interest of Rs. 1,69,962/- levied for late deposit of TDS amount, on surmises and irrelevant consideration and without considering the facts on record for the assessment year 2011- 12 and confirming the interest of Rs. 1,69,962/-
2. That the Ld CIT(A) has erred in law by not considering the fact that though a sum of Rs. 4,37,822/- was deducted as TDS by the appellant in March 2011, the same was not remitted to the Income Tax department due to an interim stay by the Hon’ble Madras High Court in writ petition no. 8102/2011, restraining the appellant bank to remit the said amount to the IT department. That thereafter vide Circular no.CO/P & D/BR EXPN/2011-12/813 dated 03.11.2011, the appellant bank underwent reorganization of organizational structure and the matter pertaining to HRD including TDS, were shifted to Regional offices from the Zonal Offices. Accordingly, the said matter was being dealt by the Regional office ‘South’ Delhi, from whose end, the remittance of TDS amount in question was inadvertently done in April 2013.
3. That the Ld CIT(A) has erred in not considering the fact that the said TDS amount was remitted to IT dept on 10.04.2013, le after the abovementioned reorganization of the organizational structure, when the said matter pertaining to TDS was under Regional Office ‘South Delhi of the Appellant bank and not Zonal office. That its only vide letter dated 7.10.2013, the appellant bank again underwent reorganization of its structure, wherein the role and responsibilities of Regional and Zonal offices were redefined and the said matters were shifted back to Zonal office. Therefore, the interest levied by the Assessing Officer to the appellant is completely arbitrary.
4. That the CIT(A) has erred in law and on the facts in not passing a reasoned order.
5. That the orders passed by the Ld. Assessing Officer and the Ld CIT(A) are unjustified, arbitrary and bad in law as these orders have been passed without application of judicial mind and the same are in gross violation of principles of natural justice.
6. That the Appellant craves leave to amend or withdraw any of the grounds or file additional grounds during the course of hearing.
In view of the above said facts and circumstances, it is most respectfully prayed before this Hon’ble Tribunal that,
i. The interest of Rs. 1, 69, 962/- levied by the L Assessing officer vide order dated 31.12.2013 and confirmed by the Ld CIT (A) vide its order dated 17.02.2015 may kindly be deleted/removed.
ii. Any other/further order that this Hon’ble Tribunal may deem fit and proper in the interest of justice.”
3. Brief facts of the case are that, the assessee deducted TDS amount from arrears of employee in March 2011 and the same has been remitted to the IT Department on 10/04/2013, the A.O. charged interest of Rs. 1,69,962/-. The assessee filed application u/s 154 read with Section 200A of the Act which has been dismissed by the DCIT, TDS, CPC, Vaishali, Ghaziabad dated 31/12/2013. Aggrieved by the order u/s 154 of the Act, the assessee filed an appeal before the CIT(A), the CIT(A) dismissed the appeal filed by the assessee vide order dated 17/02/2015 wherein the Ld. CIT(A) held that the assessee is guilty of late deposit of TDS in Government Account and opined that the interest charged of Rs. 1,69,962/- is justifiable. Aggrieved by the order of the CIT (A) dated 17/02/2015, the assessee preferred the present Appeal on the grounds mentioned above.
4. The Ld. Counsel for the assessee submitted that the assessee has 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 Ld. A.O. without considering the effect of Interim Order of the Hon’ble Madras High Court, erroneously levied interest on the assessee. Further, submitted that the assessee was having sufficient cause for not depositing the TDS on time due to the Interim Order passed by the Hon’ble Madras High Court and the authorities have committed an error by charging interest of Rs. 1,69,962/- for late deposit of TDS amount of Rs. 4,37,822/- for Assessment Year 2011-12, therefore, prayed for allowing the Appeal.
5. Per contra, the Ld. Departmental Representative relied on the orders of the Revenue Authorities and sought for dismissal of the Appeal.
6. We have heard both the parties and perused the material available on record. The assessee deducted TDS amount from arrears of employee credited to pension fund of Rs. 4,37,822/- as on 31/03/2011. In the same year i.e. 2011, All India Bank Officers Association instituted a writ petition No. 8102/2011 before the Hon’ble High Court of Madars and vide order dated 29/03/2011, the Hon’ble High Court of Madras passed following Interim Order:-
“an interim injunction restraining the respondents 3 to 21 from deducting Tax at source in respect of the optees of the pension scheme, under the joint Note dated 27.04.2010 entered into Association between and Indian the Indian Bank Bank’ Officers ‘ Association and others, for a period eight weeks. However, it is made clear that the amount equivalent to the tax element shall not be disbursed to such optees of the pension Scheme, until further orders.”
7. Though there was an interim order operating in favour of the assessee, the assessee deposited the aforesaid TDS amount with the Income Tax Department on 10/04/2013 and the Department has levied interest of Rs. 1,69,962/- for late deposit of TDS amount of Rs. 4,37,822/- for Assessment Year 2011-12. Considering the fact that there 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 of Rs. 1,69,962/- on the Assessee, accordingly we allow the Grounds of Appeal of the assessee, set aside the order of the CIT(A) by deleting the interest of Rs. 1,69,962/- levied on the Assessee by the Revenue for late payment of TDS amount.
8. In the result, the appeal of the assessee is allowed.
Order pronounced in open Court on 21st August, 2023.