MUNICIAPL CORPORATION OF GREATER MUMBAI, MUMBAI v. DCIT (TDS) 1(3), MUMBAI

ITA 1028/MUM/2019 | 2012-2013
Pronouncement Date: 06-05-2021 | Result: Allowed

Appeal Details

RSA Number 102819914 RSA 2019
Assessee PAN AAALM0042L
Bench Mumbai
Appeal Number ITA 1028/MUM/2019
Duration Of Justice 2 year(s) 2 month(s) 14 day(s)
Appellant MUNICIAPL CORPORATION OF GREATER MUMBAI, MUMBAI
Respondent DCIT (TDS) 1(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 06-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 06-05-2021
Last Hearing Date 26-03-2020
First Hearing Date 26-03-2020
Assessment Year 2012-2013
Appeal Filed On 22-02-2019
Judgment Text
!' &!' IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI VIKAS AWASTHY JUDICIAL MEMBER & SHRI RAJESH KUMAR ACCOUNTANT MEMBER . 1024 1031 / / 2019 ( +. . 2011-12 & 2012-13 ) ITA NO. 1024 TO 1031/MUM/2019 (A.Y.2011-12 & 2012- 13) M/S. MUNICIPAL CORPORATION OF GREATER MUMBAI ROOM NO.300 3 RD FLOOR MAHAPALIKA ANNEXE BLDG MAHAPALIKA MARG CST FORT MUMBAI 400 001. PAN: AAALM 0042L ...... - / APPELLANT + VS. THE DEPUTY COMMISSIONER OF INCOME TAX (TDS)-1(3) MUMBAI 400 002 ..... . /!/ RESPONDENT -0/ APPELLANT BY : SHRI RUSHABH MEHTA . /!0/ RESPONDENT BY : SHRI VIJAY JAISWAL +1 / / DATE OF HEARING : 10/02/2021 234 1 / / DATE OF PRONOUNCEMENT : 06/05/2021 !/ ORDER PER VIKAS AWASTHY JM: THESE BUNCH OF EIGHT APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-59 M UMBAI [IN SHORT THE CIT(A)] DATED 26/12/2018. THE CIT(A) VIDE AFORESAI D SINGLE ORDER HAS DECIDED EIGHT APPEALS OF THE ASSESSEE ASSAILING CHARGING O F INTEREST UNDER SECTION 2 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) 201(1A) OF THE INCOME TAX ACT 1961 (IN SHORT 'THE A CT') FOR THE QUARTERS FALLING IN ASSESSMENT YEARS 2011-12 AND 2012-13. SINCE IDE NTICAL GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN ALL THESE EIGHT APPEALS THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS C OMMON ORDER. 2. THE APPEAL OF ASSESSE IN ITA NO.1024/MUM/2019 FO R ASSESSMENT YEAR 2012-13 (26Q-Q2) IS TAKEN AS THE LEAD CASE. THE EFF ECTIVE GROUNDS REQUIRING ADJUDICATION IN THE APPEAL ARE REPRODUCED HEREIN BE LOW: 1 (A) THE ID. COMMISSIONER OF INCOME TAX (APPEALS) - 59 MUMBAI ('THE LD. CIT (A)') ERRED IN FACTS AND LAW IN CONFIRMING THE ACTION OF THE LD. ASSESSING OFFICER AND/OR CPC (TDS) GHAZIABAD IN NOT RECTIFYING THE MISTAKE APPA RENT FROM RECORD U/S. 154 OF THE ACT. (B) THE LD. CIT (A) ERRED IN FACTS AND LAW IN TREAT ING THE SUBJECT MATTER OF RECTIFICATION U/S. 154 OF THE ACT AS DEBATABLE ONE WITH TWO VIEWS POSSIBLE. 2 THE ID. CIT(A) ERRED IN FACTS AND LAW IN CONFIR MING THE ACTION OF THE ID. ASSESSING OFFICER AND/OR CPC (TDS) GHAZIABAD OF IMPOSING INT EREST OF RS.12 49 461/- U/S. 201(1A) OF THE ACT BY CONSIDERING THE DATE OF REALI SATION AS THE DATE OF PAYMENT INSTEAD OF THE DATE OF TENDER / PRESENTATION OF CHE QUE. 3. SHRI RUSHABH MEHTA APPEARING ON BEHALF OF THE AS SESSEE NARRATING THE FACTS OF CASE SUBMITTED THAT THE ASSESSEE IS AN AU TONOMOUS BODY ESTABLISHED UNDER MUMBAI MUNICIPAL CORPORATION ACT 1888 TO AD MINISTER CIVIC AFFAIRS OF MUMBAI CITY. DURING THE PERIOD RELEVANT TO ASSESSME NT YEARS UNDER APPEAL THE ASSESSEE HAD MADE PAYMENTS TO CONTRACTORS AND EMPLO YEES AFTER DEDUCTING TAX AT SOURCE UNDER SECTION 194C AND 194J OF THE AC T. THE ASSESSEE TENDERED TAX DEDUCTED AT SOURCE (TDS) FOR EACH QUARTER TO TH E GOVERNMENT EXCHEQUER BY WAY OF CHEQUE. THE TDS AMOUNTS WERE DEPOSITED BE FORE THE DUE DATE. LATER THE ASSESSEE DISCOVERED FROM TRACES PORTAL T HAT DEMANDS WERE RAISED FOR DIFFERENT QUARTERS FALLING IN FINANCIAL YEARS 2 010-11 AND 2011-12. THE ASSESSEE DID NOT RECEIVE ORIGINAL INTIMATIONS UNDE R SECTION 200A OF THE ACT FOR 3 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) THE QUARTERS UNDER DISPUTE BARRING FEW. THE INTIMA TION RECEIVED FROM THE DCIT (TDS)-1(3) MUMBAI (ASSESSING OFFICER) WERE NOT THE ORIGINAL INTIMATIONS BUT WERE THE RECTIFIED ORDERS. AFTER EXAMINING INTIMATI ONS IT TRANSPIRED THAT INTEREST UNDER SECTION 201(1A) OF THE ACT HAS BEEN LEVIED FOR DELAY IN DEPOSIT OF TDS AMOUNTS. THE ASSESSEE FILED RECTIFICATION PE TITION UNDER SECTION 154 OF THE ACT TO DELETE THE INTEREST AS THE PAYMENTS WERE MADE THROUGH CHEQUE BEFORE DUE DATE. IT WAS SPECIFICALLY URGED THAT AS PER CBDT CIRCULAR THE DATE OF DEPOSIT OF CHEQUE WAS THE DATE OF PAYMENT AND NOT T HE DATE OF ENCASHMENT OF THE CHEQUE. THE ASSESSING OFFICER REJECTED ASSESSEE S PETITION FOR RECTIFICATION VIDE ORDER DATED 14/06/2017. AGGRIEVED BY REJECTION OF PETITION UNDER SECTION 154 OF THE ACT THE ASSESSEE FILED APPEAL AGAINST C HARGING OF INTEREST UNDER SECTION 201(1A) FOR DELAY IN DEPOSIT OF TDS AMOUNTS . THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE ON TWO COUNTS I.E. (1) THE R ECTIFICATION PETITION FILED BY THE ASSESSEE UNDER SECTION 154 OF THE ACT IS NOT MA INTAINABLE; AND (2) ON MERITS THE CIT(A) REJECTED THE APPEAL HOLDING THAT THE DATE OF ACTUAL REALIZATION OF THE CHEQUE IS THE DATE OF PAYMENT AND NOT THE DA TE OF TENDERING OF THE CHEQUE. 3.1. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSES SEE SUBMITTED THAT UNDISPUTEDLY IN THE IMPUGNED ASSESSMENT YEARS THE A SSESSEE HAD TENDERED TDS AMOUNTS TO THE GOVERNMENT EXCHEQUER BY WAY OF C HEQUES BEFORE THE DUE DATE IN EACH OF THE QUARTER HOWEVER THE CHEQUES W ERE REALIZED AFTER THE DUE DATE. NO CHEQUE TENDERED BY THE ASSESSEE WAS DISHON OURED. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PLACED RE LIANCE ON CBDT CIRCULAR NO.261 DATED 08/08/1979 TO CONTEND THAT IT IS THE D ATE OF TENDERING CHEQUE WHICH SHOULD BE CONSIDERED AS THE DATE OF PAYMENT A ND NOT THE DATE OF ITS 4 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) REALIZATION. THE LD. AUTHORIZED REPRESENTATIVE OF T HE ASSESSEE TO FURTHER SUPPORT HIS CONTENTIONS PLACED RELIANCE ON THE FOLL OWING DECISIONS: (1) ONGC VS. DCIT 103 TAXAMANN.COM 396(MUM); (2) MOODYS ANALYTICS KNOWLEDGE SERVICES INDIA PVT . LTD. VS. ITO(TDS) 113 TAXAMMAN.COM 448 (BANG); (3) SAHARA AIRLINES LTD. VS. COMMISSIONER OF CUSTO MS 110 TAXMAN 378 (GOI); AND (4) P L HAULWEL TRAILERS LTD. VS. DCIT 100 ITD 48 5 (CHENNAI) 3.2. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSES SEE SUBMITTED THAT IN THE AFORESAID DECISIONS AFTER CONSIDERING CBDT CIRCULA R NO.261 (SUPRA) IT HAS BEEN HELD THAT THE DATE OF TENDERING CHEQUE BE CONSIDERE D AS THE DEEMED DATE OF PAYMENT AND NOT THE DATE OF REALIZATION OF CHEQUE. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER POINTED THAT IN THE CASE OF SAHARA AIRLINES LTD. (SUPRA) THE GOVERNMENT OF INDIA MINI STRY OF FINANCE DEPARTMENT OF REVENUE HAS REITERATED THAT UPON TENDERING OF A CHEQUE IF IT IS NOT DISHONOURED LATER IT SHALL BE DEEMED THAT PAYMENT HAS BEEN MADE ON THE DATE WHEN IT WAS HANDED OVER TO THE GOVERNMENTS BA NKERS. THE ABOVE DECISION WAS RENDERED AFTER CONSIDERING COMPILATION OF THE TREASURY RULES (IN SHORT CTR) AND THE CENTRAL GOVERNMENT ACCOUNT (RE CEIPTS & PAYMENT) RULES 1983 (IN SHORT THE R&P RULES). SH. MEHTA ASSERTED THAT CIRCULAR NO. 261 (SUPRA) IS STILL EFFECTIVE AS THE SAME HAS NOT BEEN WITHDRAWN BY THE CBDT TILL DATE. THE CIT(A) HAS ERRED IN HOLDING THAT AFTER IN TRODUCTION OF R&P RULES W.E.F. 01/6/1983 CTR AND CIRCULAR NO.261 WOULD NO LONGER BE APPLICABLE. 3.3. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSES SEE SUBMITTED THAT THE CIT(A) HAS ERRED IN HOLDING THAT RECTIFICATION PETI TION FILED BY ASSESSEE UNDER SECTION 154 WAS NOT AMENABLE. THE CIT(A) HAS ERRED IN RECORDING THAT THE APPLICATION UNDER SECTION 154 WAS MADE BY THE ASSES SEE FOR SEEKING 5 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) RECTIFICATION IN THE DATE OF CHALLAN. THE LD. AUTHO RIZED REPRESENTATIVE OF THE ASSESSEE POINTED THAT THE RECTIFICATION PETITIONS F ILED UNDER SECTION 154 OF THE ACT ARE AT PAGE 1 TO 25 OF THE PAPER BOOK. IT HAS B EEN CATEGORICALLY STATED IN THE PETITION THAT THE ASSESSEE IS SEEKING RECTIFICA TION IN THE DATE FOR CONSIDERING DATE OF PAYMENT/DEPOSIT OF TDS. IT WAS POINTED THAT THE DATE OF TENDERING CHEQUE SHOULD BE CONSIDERED AS DATE OF PA YMENT/DEPOSIT OF TDS AMOUNT INSTEAD OF DATE OF REALIZATION OF THE CHEQUE . RELIANCE WAS PLACED ON CBDT GUIDELINES. RECTIFICATION PETITION FILED BEFOR E THE ASSESSING OFFICER WAS SUPPORTED BY AN AFFIDAVIT TABULATING DATE OF DEPOSI T OF TDS ALONG WITH THE AMOUNT. 4. PER CONTRA SHRI SUSHIL KUMAR MISHRA REPRESENTIN G THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED F OR DISMISSING THE APPEAL BY ASSESSEE. THE LD. DEPARTMENTAL REPRESENTA TIVE SUBMITTED THAT THE RECTIFICATION PETITION FILED BY ASSESSEE UNDER SECT ION 154 OF THE ACT IS NOT MAINTAINABLE AS THE ISSUE WHETHER DATE OF TENDERIN G CHEQUE OR THE DATE OF REALIZATION OF CHEQUE SHOULD BE CONSIDERED AS THE ACTUAL DATE OF PAYMENT IS DEBATABLE. THE LD. DEPARTMENTAL REPRESENTATIVE CONT ENDED THAT THE CIT(A) AFTER CONSIDERING THE DECISION IN THE CASE OF ICIC I BANK LTD. VS. DCIT(TDS) IN ITA NO.661 & 772/LKW/2011 DECIDED ON 25/04/2013 BY LUCK NOW BENCH OF THE TRIBUNAL AND DECISION IN THE CASE OF GM MPRRDA PIU SHIVPURI VS. ITO(TDS) IN ITA NO.370 & 371/AGRA/2011 DECIDED ON 08/06/2012 BY AGRA BENCH OF THE TRIBUNAL HAS HELD THAT DATE OF REALIZATION OF CHEQ UE IS MATERIAL FOR CONSIDERING ACTUAL DATE OF DEPOSIT OF TDS UNDER SECTION 200A OF THE ACT. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER ASSERTED THAT A FTER INTRODUCTION OF R & P RULES W.E.F. 01/6/1983 CTR HAS BECOME REDUNDANT. C IRCULAR 261 (SUPRA) WAS 6 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) ISSUED WITH REFERENCE TO CTR ONCE CTR CEASES TO BE OPERATIVE THE CIRCULAR HAS BECOME INEFFECTIVE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY OPPOSING S IDES AND HAVE EXAMINED THE ORDERS OF AUTHORITIES BELOW. WE HAVE A LSO CONSIDERED THE DECISIONS ON WHICH THE RIVAL SIDES HAVE PLACED RELI ANCE TO BUTTRESS THEIR RESPECTIVE ARGUMENTS. THE TWO ISSUES THAT HAVE EMER GED FOR ADJUDICATION BEFORE US ARE: (I) WHETHER RECTIFICATION PETITION FILED BY THE ASS ESSEE UNDER SECTION 154 OF THE ACT IS MAINTAINABLE IN THE FACTS AND CIRCUMS TANCES OF THE CASE? (II) WHETHER THE DATE OF DEPOSIT OF TDS AMOUNT THRO UGH CHEQUE IS THE DATE OF TENDERING CHEQUE OR THE DATE OF REALIZATION OF CHEQUE? 6. BEFORE WE PROCEED TO DECIDE ABOVE ISSUES IT WOU LD BE IMPERATIVE TO HIGHLIGHT THE UNDISPUTED FACTS IN THIS CASE. THE AS SESSEE HAS NOT RECEIVED ORIGINAL INTIMATION UNDER SECTION 200A /201(1A) OF THE ACT FOR THE IMPUGNED QUARTERS. THE ASSESSEE HAS ONLY RECEIVED ORDERS UND ER SECTION 154 OF THE ACT FOR SOME OF THE QUARTERS. IT IS AN ACCEPTED FACT TH AT THE ASSESSEE HAD TENDERED CHEQUES FOR DEPOSIT OF TDS COLLECTED UNDER SECTION 194C AND 194J OF THE ACT ON OR BEFORE THE DUE DATE. THE CHEQUES DEPOSITED BY TH E ASSESSEE WERE DULY REALIZED ON PRESENTATION. FOR THE SAKE OF COMPLETEN ESS THE RELEVANT DATES ARE TABULATED HEREIN BELOW: SECTION TAX DEDUCTED (IN RS.) DATE OF DEPOSIT OF CHEQUE DUE DATE DATE OF REALIZATION OF CHEQUE 194J 3 34 815/- 06/8/2011 08/8/2011 09/8/2011 194C 1 63 55 074/- 06/8/2011 08/8/2011 09/8/2011 7 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) 7. THE FIRST ISSUE FOR OUR CONSIDERATION IS MAINTAI NABILITY OF RECTIFICATION PETITION FILED BY THE ASSESSEE UNDER SECTION 154 OF THE ACT. THE ASSESSEE HAD FILED RECTIFICATION PETITION SEEKING CORRECTION IN THE DATE OF TENDERING/DEPOSIT OF CHALLANS ALONG WITH CHEQUE. THE PRAYER OF THE AS SESSEE WAS TO CONSIDER DATE OF TENDERING/DEPOSIT OF CHEQUE IN THE BANK AS DEEME D DATE OF PAYMENT OF TDS AMOUNT INSTEAD OF DATE OF REALIZATION OF THE CHEQUE . REFERENCE WAS MADE TO CBDT CIRCULAR NO.261 (SUPRA). THE RELEVANT EXTRACT OF THE CIRCULAR ON WHICH RELIANCE WAS PLACED READS AS UNDER:- 'IN TERMS OF RULE 80 OF THE COMPILATION OF THE TREA SURY RULES IF A CHEQUE OR DRAFT TENDERED IN PAYMENT OF GOVERNMENT DUES AND ACCEPTED UNDER THE PROVISIONS OF RULE 79 IS HONOURED ON PRESENTATION THE PAYMENT IS DEEM ED TO HAVE BEEN MADE ON THE DATE ON WHICH IT WAS HANDED OVER TO THE GOVERNMENT BANKER....' THE CONTENTION OF THE ASSESSEE IS THAT THE SAID CIR CULAR HAS NOT BEEN WITHDRAWN BY THE DEPARTMENT TILL DATE. THE REVENUE HAS NOT PLACED ON RECORD ANY DOCUMENT TO CONTROVERT THIS SUBMISSION OF THE A SSESSEE. IT IS NO MORE RES- INTEGRA THAT THE BOARDS CIRCULARS ARE BINDING ON T HE DEPARTMENT SO LONG AS THEY ARE NOT WITHDRAWN. IT IS NOT OPEN TO THE DEPAR TMENT TO RAISE CONTENTIONS CONTRARY TO CIRCULARS ISSUED BY THE BOARD. THE HON BLE SUPREME COURT OF INDIA IN THE YEAR 1981 IN THE CASE OF K.P. VARGHESE VS. I TO 131 ITR 597 HELD THAT CBDT CIRCULARS ARE BINDING ON THE DEPARTMENT. THE HON'BLE APEX COURT IN THE CASE OF COMMISSIONER OF CUSTOMS VS. INDIAN OIL CORP ORATION LTD. 267 ITR 272 AGAIN REITERATED THAT CIRCULARS ISSUED BY THE BOARD ARE BINDING ON THE REVENUE AND THE DEPARTMENT CANNOT CONTEND OTHERWISE. IN THE INSTANT CASE THE ARGUMENT RAISED ON BEHALF OF REVENUE THAT THE DATE OF DEPOSIT OF CHEQUE OR THE DATE OF REALIZATIO N OF CHEQUE IS TO BE CONSIDERED AS THE DATE OF PAYMENT OF TDS IS DISPUT ED/DEBATABLE ISSUE IS UNTENABLE. THE DEPARTMENT IS BOUND BY CIRCULAR NO.2 61 (SUPRA). THE SAID 8 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) CIRCULAR IN AN UNAMBIGUOUS MANNER STATES THAT IF TH E CHEQUE IS HONOURED THE DATE OF TENDERING THE CHEQUE TO GOVERNMENTS BANKER SHALL BE THE DATE OF MAKING THE PAYMENT. IN SO FAR AS THE DEPARTMENT IS CONCERNED THERE IS NO AMBIGUITY OR ELEMENT OF VAGUENESS ON THE ISSUE. THE RE MAY HAVE BEEN DIVERGENT VIEWS ON THIS ISSUE BY THE APPELLATE FORU M IT IS A SETTLED LEGAL POSITION THAT THE BOARD CIRCULARS ARE NOT BINDING O N THE APPELLATE TRIBUNAL OR THE HONBLE HIGH COURTS. IN SO FAR AS THE DEPARTME NT IS CONCERNED THE DEPARTMENT CANNOT TAKE A PLEA CONTRARY TO THE CIRCU LAR ISSUED BY THE BOARD THAT HAS NOT BEEN WITHDRAWN. HENCE THE FINDINGS OF THE CIT(A) THAT THE RECTIFICATION PETITION UNDER SECTION 154 OF THE ACT IS NOT MAINTAINABLE BEING A DEBATABLE ISSUE IS UNSUSTAINABLE. 8. THE CIT(A) HAS RELIED ON THE DECISIONS OF TRIBUN AL IN THE CASE OF ICICI BANK LTD. (SUPRA) AND GM MPRRDA PIU SHIVPURI VS . ITO(TDS) (SUPRA) TO HOLD THAT THE DATE OF REALIZATION OF CHEQUE IS THE DATE OF PAYMENT. THE CIT(A)S RELIANCE ON THE AFORESAID DECISIONS TO CONCLUDE THA T THE ISSUE IS DEBATABLE IS MISPLACED. WE OBSERVE THAT IN BOTH AFORESAID CASES OSTENSIBLY CBDT CIRCULAR NO.261 (SUPRA) WAS NOT BROUGHT TO THE NOTICE OF BEN CH. THUS WHILE RENDERING AFORESAID DECISIONS THE BENCH WAS OBLIVIOUS TO BOA RD CIRCULAR BINDING ON THE DEPARTMENT. 9. WE FURTHER OBSERVE THAT THE CIT(A) IN IMPUGNED O RDER HAS ONLY REFERRED TO THE TITLE (SUBJECT) OF RECTIFICATION PETITION AN D HAS NOT EXAMINED THE CONTENTS OF THE PETITION. PARA 2 OF THE PETITION C LEARLY STATES THE REASON FOR SEEKING RECTIFICATION BASED ON CBDT CIRCULAR. THERE FORE THE CIT(A) HAS ERRED IN NOT EXAMINING THE PETITION OF ASSESSEE IN ENTIRETY. WE HOLD THAT THE RECTIFICATION PETITION UNDER SECTION 154 OF THE ACT FOR SEEKING CORRECTION IN THE 9 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) DATE OF DEPOSIT OF TDS AMOUNTS WAS MAINTAINABLE IN ITS PRESENT FORM. THE GROUND NO.1 RAISED IN APPEAL BY THE ASSESSEE IS TH US ALLOWED. 10. THE SECOND ISSUE IN APPEAL BEFORE US IS WHERE THE TDS AMOUNT HAS BEEN DEPOSITED TO THE GOVERNMENT EXCHEQUER THOROUGH CHEQ UE WHETHER THE DATE OF TENDERING CHEQUE TO THE GOVERNMENTS BANKER OR T HE DATE OF REALIZATION OF THE CHEQUE IS THE DATE OF ACTUAL PAYMENT. TO DECIDE THIS QUESTION IT WOULD BE RELEVANT TO REFER TO SOME DECISIONS RENDERED OVER T HE PERIOD OF TIME ON THIS ISSUE. 11. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. OGALE GLASS WORKS LTD. (1954) 25 ITR 529 HELD THAT WHERE THE P AYMENT IS MADE BY CHEQUE THE DATE OF PAYMENT WOULD BE DATE OF DELIVERY OF CH EQUE PROVIDED THE CHEQUE IS HONOURED ON PRESENTATION TO THE BANK. THE RELEVA NT EXTRACT OF THE JUDGEMENT READS AS UNDER: IN THE CASE BEFORE US NONE OF THE CHEQUES HAS BEEN DISHONOURED ON PRESENTATION AND PAYMENT CANNOT THEREFORE BE SAID TO HAVE BEEN DEFEATED BY THE HAPPENING OF THE CONDITION SUBSEQUENT NAMELY DISHONOUR BY NON- PAYMENT AND THAT BEING SO THERE CAN BE NO QUESTION THEREFORE THAT THE ASSES SEE DID NOT RECEIVE PAYMENT BY THE RECEIPT OF THE CHEQUES. THE POSITION THEREFORE IS THAT IN ONE VIEW OF THE MATTER THERE WAS IN THE CIRCUMSTANCES OF THIS CASE AN IMPLIED AGREEMENT UNDER WHICH THE CHEQUES WERE ACCEPTED UNCONDITIONALLY AS PAYMENT AN D ON P ANOTHER VIEW EVEN IF THE CHEQUES WERE TAKEN CONDITIONALLY THE CHEQUES N OT HAVING BEEN DISHONOURED BUT HAVING BEEN CASHED THE PAYMENT RELATED BACK TO THE DATES OF THE RECEIPT OF THE CHEQUES AND IN LAW THE DATES OF PAYMENTS WERE THE D ATES OF THE DELIVERY OF THE CHEQUES. 12. THE HONBLE APEX COURT IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) VS. RAUNAQ EDUCATION FOUNDATION 350 IT R 420 WAS CONSIDERING THE ISSUE IN THE BACK DROP OF THE PROVISIONS OF SEC TION 13(2)(B) OF THE ACT. THE HONBLE COURT HELD THAT WHERE THE CHEQUE WAS RECEIV ED ON 22/04/2202 AND THE RECEIPT WAS ISSUED ON THAT DATE HOWEVER THE C HEQUE WAS REALIZED IN THE 10 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) NEXT FINANCIAL YEAR THE ASSESSEE WAS ELIGIBLE FOR BENEFIT UNDER SECTION 80G OF THE ACT I.E. ON THE DATE OF DEPOSIT OF THE CHEQUE. 13. SIMILAR VIEW WAS TAKEN BY THE HONBLE MADRAS HI GH COURT IN THE CASE OF CIT VS. REPCO HOME FINANCE LTD. 53 TAXMANN.COM 47. IN THE AFORESAID CASE THE ISSUE WAS WITH REGARD TO CHARGING OF INTEREST U NDER SECTION 234C OF THE ACT. THE QUESTION OF LAW BEFORE THE HONBLE HIGH COURT F OR CONSIDERATION WAS:- 'WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE DATE OF PRESENTATION OF CHEQUE IN THE BANK IS TO BE RECKONED AS THE DATE OF PAYMENT OF ADVANCE TAX AND NOT THE DATE ON WHICH THE CHEQUE IS CLEARED AND ENTERED IN THE RECEIPT ROLL AS REQUIRED UNDER RULE 20 OF THE CENTRAL GOVERNMENT ACCOUNT (RECEIPTS AND PAYMENTS) RULES 1983 FOR THE PURPOSE OF CALCULATING INTEREST UNDER SECTION 234C OF THE INCOME TAX ACT?' THE HONBLE HIGH COURT AFTER CONSIDERING THE JUDGM ENT RENDERED IN THE CASE OF CIT VS. OGALE GLASS WORKS LTD. (SUPRA) AND RAUNAQ E DUCATION FOUNDATION (SUPRA) HELD THAT ONCE CHEQUE ISSUED BY THE ASSESSE E IS ENCASHED THE PAYMENT RELATES BACK TO THE DATE OF RECEIPT OF CHEQUE. HERE IT WOULD NOT BE OUT OF PLACE TO MENTION THAT THE HONBLE HIGH COURT DECIDED THE ISSUE OF DATE OF PAYMENT OF ADVANCE TAX AFTER CONSIDERING R &P RULES 1983. 14. THE CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE O F ONGC VS. DCIT (SUPRA) AFTER CONSIDERING CBDT CIRCULAR NO.261 (SUPRA) AND THE CENTRAL GOVERNMENT ACCOUNT (RECEIPTS & PAYMENTS) RULES 1983 AND CATENA OF JUDGMENTS ON THIS ISSUE HELD THAT THE DATE OF TENDERING CHEQUE SHALL BE DEEMED TO BE THE DATE OF DEPOSIT. THE RELEVANT EXTRACT OF THE TRIBUNAL ORDE R READ AS UNDER:- 6. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AV AILABLE ON RECORD. THE ISSUE INVOLVED IN THE PRESENT APPEAL LIES IN A NARROW COM PASS. WE FIND THAT OUR INDULGENCE IN THE PRESENT APPEAL HAS BEEN SOUGHT BY THE ASSESS EE TO ADJUDICATE AS TO WHETHER THE CIT(A) IS RIGHT IN LAW AND THE FACTS OF THE CAS E IN TREATING THE ASSESSEE AS BEING IN DEFAULT FOR DELAY IN DEPOSIT OF TDS THOUGH THE CHE QUE TOWARDS THE AMOUNT OF TDS WAS TENDERED BY THE ASSESSEE TO THE GOVERNMENT BANK WITHIN THE STIPULATED TIME 11 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) PERIOD. WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION AND FIND THAT THAT AS PER CBDT CIRCULAR NO. 261 [F.NO. 385/61/79- IT (B)] DATED 08.08.1979 IT HAS BEEN CLARIFIED THAT THE DATE OF TENDERING OF CHEQUE FOR PAYMENT OF GOVERNMENT DUES SHALL BE DEEMED TO BE THE DATE OF PAYMENT OF SUCH T AXES. WE FIND THAT THE AFORESAID CBDT CIRCULAR IS APPLICABLE TO ALL GOVERNMENT DUES AND MAKES NO DISTINCTION WHETHER THE PAYMENT IS BY WAY OF TDS ADVANCE TAX SELF-ASS ESSMENT TAX ETC. THE RELEVANT EXTRACT OF THE AFORESAID CBDT CIRCULAR NO. 261 DAT ED 08.08.1979 READS AS UNDER: 'IN TERMS OF RULE 80 OF THE COMPILATION OF THE TREA SURY RULES IF A CHEQUE OR DRAFT TENDERED IN PAYMENT OF GOVERNMENT DUES AND AC CEPTED UNDER THE PROVISIONS OF RULE 79 IS HONOURED ON PRESENTATION THE PAYMENT IS DEEMED TO HAVE BEEN MADE ON THE DATE ON WHICH IT WAS HANDED O VER TO THE GOVERNMENT BANKER....' ON A PERUSAL OF THE ORDER OF THE CIT(A) WE FIND TH AT HE HAD DECLINED TO ACCEPT THE AFORESAID CBDT CIRCULAR NO. 261 DATED 08.08.1979 FOR THE REASON THAT AS PER HIM THE 'CENTRAL TREASURY RULES (OLD RULES)' HAD BEEN S UBSTITUTED BY THE 'CENTRAL GOVERNMENT ACCOUNT (RECEIPTS AND PAYMENTS) RULES 1 983' WHICH THEREIN GOVERNED THE PROVISIONS OF PAYMENT OF GOVERNMENT DUES. THE C IT(A) DRAWING SUPPORT FROM THE CENTRAL GOVERNMENT ACCOUNT (RECEIPTS AND PAYMENTS) RULES 1983 HAD THEREIN CONCLUDED THAT AS PER THE AMENDED RULES THE GOVERNM ENT DUES TENDERED IN FORM OF A CHEQUE OR DRAFT SHALL BE DEEMED TO HAVE BEEN PAID O N THE DATE ON WHICH IT IS CLEARED AND ENTERED IN THE RECEIPT OF SCROLL. ADMITTEDLY W E ARE IN AGREEMENT WITH THE VIEW TAKEN BY THE CIT(A) THAT THE 'CENTRAL TREASURY RULE S (OLD RULES)' HAD BEEN SUBSTITUTED BY THE 'CENTRAL GOVERNMENT ACCOUNT (REC EIPTS AND PAYMENTS) RULES. 1983'. AS PER WHICH THE DATE ON WHICH A CHEQUE OR A DRAFT IS CLEARED IS TO BE DEEMED AS THE DATE OF MAKING OF THE PAYMENT BY A PE RSON TOWARDS GOVERNMENT DUES ETC. HOWEVER AT THE SAME TIME WE CANNOT REMAI N OBLIVIOUS OF THE FACT THAT THE CBDT CIRCULAR NO. 261[F.NO.385/6I/79-TT(B)] DAT ED 08.08.1979 HAD NOT BEEN WITHDRAWN AND AS SUCH HOLDS THE GROUND AS ON DATE. RATHER IT WOULD BE RELEVANT TO POINT OUT THAT THE CBDT IN ALL ITS WISDOM HAD NOT EVEN MODIFIED THE CIRCULAR NO. 261. DATED 08.08.1979 WHICH WAS ISSUED PRIOR TO THE 'CENTRAL GOVERNMENT ACCOUNT (RECEIPT AND PAYMENTS) RULES 1983'. BE THAT AS IT MAY. THE AFORESAID 'BENEVOLENT CIRCULAR' VIZ. CIRCULAR NO. 261 DATED 08.08.1979 I SSUED BY THE CBDT ON THE DATE OF TENDERING OF THE CHEQUE BY THE ASSESSEE TOWARDS THE AMOUNT OF TDS TO THE GOVERNMENT BANK DID HOLD THE GROUND AND WAS THUS B INDING ON THE REVENUE. WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO TH E OBSERVATIONS OF THE CIT(A) THAT AS THE CENTRAL TREASURY RULES (OLD RULES) HAD BEEN RENDERED AS REDUNDANT THEREFORE THE CBDT CIRCULAR NO. 261. DATED 08.08.1979 WOULD T HEREIN FOLLOW AND ALSO HAS TO BE TAKEN AS HAVING BEEN RENDERED AS OTIOSE. [EMPHASIZED BY US] THE TRIBUNAL AFTER CONSIDERING CTR R&P RULES 1983 AND CIRCULAR NO.261 (SUPRA) CONCLUDED THAT THE DEPARTMENT IS BOUND BY B OARD CIRCULAR. SINCE THE 12 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) SAID CIRCULAR HAS NOT BEEN WITHDRAWN IT IS STILL V ALID AND HOLDS THE GROUND. THUS THE DATE OF DEPOSIT OF CHEQUE IN THE BANK IS THE DA TE OF PAYMENT. SIMILAR VIEW HAS BEEN EXPRESSED IN THE CASE OF MOOD YS ANALYTICS KNOWLEDGE SERVICES INDIA PVT. LTD. VS. ITO (TDS) (S UPRA) P L HAULWEL TRAILERS LTD. VS. DCIT (SUPRA) AND IN THE RECENT DECISION BY THE CO-ORDINATE BENCH IN THE CASE OF STANDARD CHARTERED BANK VS. DCIT IN ITA NO . 2153/MUM/2018 A.Y.2008-09 DECIDED ON 21/08/2020. 15. IN THE CASE OF SAHARA AIRLINES LTD. VS. COMMISS IONER OF CUSTOMS (SUPRA) THE ADJUDICATING AUTHORITY AFTER CONSIDERING CENTRA L GOVERNMENT ACCOUNT (RECEIPTS & PAYMENTS) RULES 1983 AND THE TREASURY R ULES CONCLUDED AS UNDER: A HARMONIOUS READING OF THE PROVISIONS MAKES IT CL EAR THAT GOVERNMENT DUES CAN BE PRESENTED IN THE FORM OF CHEQUE INTO THE ACCREDITED BANK. UPON TENDERING OF A CHEQUE IF IT IS NOT DISHONOURED LATER IT SHALL BE DEEMED THAT PAYMENT HAS BEEN MADE ON THE DATE WHEN IT WAS HANDED OVER TO THE GOVERNME NTS BANKERS. DE-HORS CIRCULAR NO. 261 (SUPRA) THE DEPARTMENT OF REVENUE HELD THAT HARMONIOUS READING OF THE PROVISIONS OF BOTH THE RU LES TAKES TO INESCAPABLE CONCLUSION THAT UPON TENDERING CHEQUE IF IT IS NOT DISHONOURED ON PRESENTATION THE PAYMENT SHALL BE DEEMED TO HAVE B EEN MADE ON THE DATE OF HANDING OVER CHEQUE TO THE GOVERNMENTS BANKERS. 16. AS HAS BEEN OBSERVED EARLIER BY US THE RELIANC E PLACED BY CIT(A) ON THE DECISIONS IN THE CASE OF ICICI BANK LTD. (SUPRA) A ND GM MPRRDA PIU SHIVPURI (SUPRA) TO TAKE A CONTRARY VIEW IS MISDIRECTED AS THE CBDT CIRCULAR NO.261 WAS NOT CONSIDERED IN THE SAID DECISIONS. THEREFORE TH E SAID DECISIONS DOES NOT SUPPORT THE CAUSE OF REVENUE. 13 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) 17. FROM THE ANALYSES OF DECISIONS REFERRED ABOVE IT CAN BE SECURELY DEDUCED THAT THE DATE OF PAYMENT TO GOVERNMENT EXCHEQUER THROUGH CHEQUE SHALL BE THE DATE OF TENDERING/DEPOSITING TH E CHEQUE SUBJECT TO CHEQUE BEING HONOURED ON PRESENTATION. AFTER TAKING INTO CONSIDERATION THE FACTS OF INSTANT CASE AND THE DECISIONS DISCUSSED A BOVE WE HOLD THAT THE TDS DEDUCTED UNDER SECTION 194C AND 194J OF THE ACT WAS DEPOSITED BY THE ASSESSEE THROUGH CHEQUE TO THE GOVERNMENTS BANKER BEFORE THE DUE DATE. HENCE NO INTEREST UNDER SECTION 201(1A) OF THE ACT FOR ALLEGED DELAY IN DEPOSIT OF TDS AMOUNT IS CHARGEABLE TO THE ASSESSEE. THE IN TEREST LEVIED UNDER SECTION 201(1A) OF THE ACT IS DIRECTED TO BE DELETED. THE ASSESSEE SUCCEEDS ON GROUND NO.2 OF THE APPEAL . 18. IN THE RESULT IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. ITA NO. 1025 TO 1031/MUM/2019 APPEAL ITA NO. ASSESSMENT YEAR/QUARTER 1025/MUM/2019 2012-13 (26Q-Q2) 1026/MUM/2019 2012-13 (26Q-Q3) 1027/MUM/2019 2012-13 (26Q-Q3) 1028/MUM/2019 2012-13 (26Q-Q4) 1029/MUM/2019 2011-12 (26Q-Q4) 1030/MUM/2019 2012-13 (26Q-Q3) 1031/MUM/2019 2012-13 (26Q-Q2) 19. WE FIND THAT IDENTICAL GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN ALL THESE APPEALS. BOTH SIDES ARE UNANIMOUS IN STATING THAT FACTS GERMANE TO THE ISSUE IN ALL THESE APPEALS ARE IDENTICAL TO THE FAC TS IN ITA NO. 1024/MUM/2019 FOR ASSESSMENT YEAR 2012-13 (QR.2) EXCEPT FOR THE AMOUNT OF INTEREST CHARGED UNDER SECTION 201(1A) OF THE ACT. SINCE THE FACTS IN ALL THESE APPEALS ARE 14 ITA NO. 1024 TO 1031/MUM/2019 (A.Y2011-12 & .2012 -13) ADMITTEDLY IDENTICAL THE FINDINGS GIVEN BY US WHIL E ADJUDICATING THE APPEAL OF ASSESSEE IN ITA NO. 1024/MUM/2019 WOULD MUTATIS MUTANDIS APPLY TO THE PRESENT SET OF APPEALS. AS A RESULT ALL THESE APP EALS BY THE ASSESSEE ARE ALLOWED FOR PARITY OF REASONS. 20. TO SUM UP ITA NOS.1024 TO 1031/MUM/2019 BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THURSDAY THE 06TH DAY OF MAY 2021. SD/- SD/- (RAJESH KUMAR) (VIKAS AWAST HY) $&! / ACCOUNTANT MEMBER ! / JUDICIAL MEMBER / MUMBAI 5!+/ DATED: 06/05/2021 VM SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. - / THE APPELLANT 2. . /! / THE RESPONDENT. 3. 6/ ( )/ THE CIT(A)- 4. 6/ CIT 5. 78. / + . . . / DR ITAT MUMBAI 6. 89:; / GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT MUMBAI