Case Law Details
UTI Mutual Fund Vs DCIT (ITAT Mumbai)
The issue under consideration is whether the AO is correct in levying additional interest u/s 201(1A) for late payment of TDS?
Month is to be interpreted as period of 30 days and not British calendar for levying additional interest u/s 201(1A) for late payment of TDS?
In the present case, the assessee has deducted Income-tax at source on various dates of the month of October 2013 which was required to be deposited to the credit of Central Government on 7th November 2013 but was deposited late to the credit of Central Government on 11.11.2013 , which led to raising of additional demand towards interest payable by assessee for late deposit of TDS. The assessee in addition to suo motu voluntary deposit of interest for late deposit of TDS to the tune of Rs.5,73,046/- while filing 3rd quarter TDS return. The delay in deposit of TDS to the credit of Central Government ranged for the period from 15 days to 35 days. The assessee while computing interest for such delay in deposit of TDS considered period of delay in deposit of TDS in number of days wherein if the delay in deposit of TDS is upto 30/31 days, it was taken as one month delay but where it exceeded 30/31 days but up-to 61/62 days, the same was taken as 2 months delays while Revenue has taken rollover of month as basis for computing interest payable by the assessee for late deposit of TDS, as where the TDS is deducted in the month of October 2013 but paid in November 2013, the interest is computed by taking delay for 2 months and hence the differential demand for interest payable raised by Revenue to the tune of Rs.4,19,060/-.
ITAT states that various Hon‟ble High Court as well tribunal has taken a consistent view that “month” is to be interpreted as period of 30 days and not British calendar . There are other judgments also relied upon by assessee wherein similar view has been taken. Thus , Respectfully following the ratio of aforesaid decisions, ITAT allow the appeal of the assessee, by holding that for purpose of computation of interest payable u/s. 201(1A) month is to be interpreted as period of 30 days and not British Calendar Month.
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