New Delhi Television Ltd Vs ACIT (ITAT Delhi)
Introduction: In a significant development, the Income Tax Appellate Tribunal (ITAT) of Delhi has ruled in favor of New Delhi Television Ltd (NDTV) in the matter of interest charged u/s 201(1A) of the Income Tax Act due to a delay in remittance of Tax Deducted at Source (TDS). The Tribunal directed the removal of the interest charges, citing technical glitches and banking procedures that led to a delay of a single day on two separate occasions.
Analysis: The ITAT took into account the peculiar circumstances leading to the delay in TDS remittance, including a dysfunctional bank website and the processing time of online payments via National Electronic Fund Transfer (NEFT). The panel determined that these situations were beyond the control of the assessee and did not amount to willful default. Notably, NDTV had never defaulted in remittance of TDS before these instances.
The decision set a precedent by suggesting that the chargeability of interest u/s 201(1A), though automatic, should not be applied indisputably in cases where the delay is due to reasons beyond the control of the assessee. The ruling can potentially influence how cases involving minor delays in TDS remittance are treated in the future, providing possible relief to other taxpayers facing similar situations.
Conclusion: The ITAT’s ruling in favor of NDTV represents a significant judgement that reinforces the principle of considering peculiar circumstances in assessing tax default situations. While the provision for charging interest under the Income Tax Act is mandatory, this ruling provides a nuanced understanding, emphasizing that interest should not be imposed when the delay is beyond the assessee’s control.
FULL TEXT OF THE ORDER OF ITAT DELHI
These appeals in ITAs No.6899 to 6901/Del/2019 for AY 2017-18 arise out of the order of the Commissioner of Income Tax (Appeals)-41, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeals No.455/18-19/CIT(A)-41, 454/18- 19/CIT(A)-41 and 453/18-19/CIT(A)-41, respectively dated 25.06.2019 against the orders of intimation u/s 154 and u/s 200A/206CB (in ITA No.6901/Del/2019) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 05th August, 2017, 08th August, 2018 and 14th February, 2017, respectively, passed by the ld. Assessing Officer, CPC (TDS) Ghaziabad, (hereinafter referred to as ‘ld. AO’).
2. The present appeals are filed against the order dated 05.08.2017 of the CPC passed u/s 201(1A) of the Act wherein the CPC has charged interest u/s 201(1A) of the Act for the delayed remittance of TDS by one day on two occasions. These orders were confirmed by the Learned Commissioner of Income Tax (Appeals) – 41 , New Delhi (hereinafter referred to as the ld. CIT(A)) vide orders dated 10.06.2019.
3. The appeal preferred in ITA No. 6899/Del/2019 relates to quarterly return filed in Form 24Q (3rd quarter). The appeal preferred in ITA No. 6900/Del/2019 relates to quarterly return filed in Form 26Q (3rd quarter). The appeal preferred in ITA No. 6901/Del/2019 relates to quarterly return filed in Form 27Q (3rd quarter).
4. Identical issue is involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.
5. The only identical issue involved in all these appeals is as to whether the ld. CIT(A) was justified in confirming the levy of interest u/s 201(1A) of the Act in respect of remittance of tax deducted at source with a delay of one day on two occasions, in the facts and circumstances of the case. Consequentially, whether the assessee would be liable for interest u/s 220(2) of the Act for the non-payment of the said demand ?
6. We have heard the rival submissions and perused the materials available on record. We find that the assessee had filed respective quarterly returns in Form No. 24Q (for salaries) ; Form No. 26Q (for payments falling within the ambit of provisions of section 194C and 194J of the Act) and Form No. 27Q (for payments made to non-residents). In all the aforesaid returns, the ld. CPC had charged interest u/s 201(1A) of the Act for the delay in remittance of tax deducted at source (TDS) in respect of the following two months:-
