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.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal, filed by assessee, being ITA No. 2295/Mum/2018, is directed against appellate order dated 17.01.2018, passed by learned Commissioner of Income Tax (Appeals)-59, Mumbai (hereinafter called “the CIT(A)”) in Appeal No. CIT(A)-59/IT-116 [IT-114(Apl.-60)]/2017-18, for assessment year 2014-15, which in turn has arisen from intimation issued by learned Deputy Commissioner of Income-tax, Income Tax Department , TDS CPC, Ghaziabad, UP, dated 30.03.2014 u/s. 200A of the 1961 Act
2. The grounds of appeal raised by assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called “the tribunal”) read as under:-
―GROUND NO. 1: LEVYING OF ADDITIONAL INTEREST U/S 201(1A) FOR LATE PAYMENT OF TAX DEDUCTED AT SOURCE (“TDS”):
1. On the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) erred in upholding the action of the Assessing Officer (“AO”) of levying additional interest u/s 201(1A) amounting to Rs. 4,19,090/- on late payment of TDS.
2. The Appellant prays that the additional interest levied by the AO and affirmed by the CIT(A) amounting to Rs. 4,19,090 be deleted.‖
3. The brief facts of the case are that the assessee has deducted Income-tax at source under Chapter XVII-B of the Income-tax Act, 1961 (hereinafter called “ the Act”) which was deposited late by the assessee to the credit of Central Government which led to raising of further demand towards interest of Rs.4,19,090/- for late deposit of TDS by learned DCIT, Income Tax Department , TDS CPC, Ghaziabad, UP, vide intimation dated 30.03.2014 u/s. 200A of the 1961 Act against assessee, after adjusting interest of Rs. 5,73,046/- already suo motu paid by the assessee while filing TDS return in Form No. 26Q for 3rd Quarter of Financial year 2013-14. It all happened that assessee had deducted income-tax at source(TDS) in the month of October, 2013 on various dates which ought to have been deposited by prescribed date i.e. latest by 7th November, 2013 but the same was not deposited by assessee by 7th November 2013 but was deposited late to the credit of Central Government by assessee on 11.11.2013 , leading to delay in deposit of TDS to the credit of Central Government ranging for the period from 15 days to 35 days. The asessee on its part has submitted a chart to make its contention as to how the interest to be computed u/s 201(1A), as detailed here under:-
