Tendering of Cheque to the Bank is to be considered as the date of payment- No interest chargeable in such cases
Whether Tendering of Cheque to the Bank towards deposit of Advance Tax, TDS Liability, etc shall be held as Date of Deposit of Tax or TDS dues & accordingly Assessee may not be treated as default towards late payment of Tax or TDS to Govt Account so as to suffer Interest under section 234C,234B ans 201(1A)?
Date of tendering of cheque to the Bank shall be treated as date of deposit of Tax or TDS provided sufficient balance is available in Bank Account of Assessee and Cheque is not dishonoured.
Taxpayer shall not be held responsible for delay on the part of the Bank for ultimate collection of the Cheque on behalf of the Govt and crediting the same to the Govt. Account.
So, when cheque was tendered to the bank on or before the due date towards payment of Tax or TDS , Assessee shall not held as Default towards late payment of Tax or TDS accordingly shall not suffer any interest liablity either under section 234C,234B or 201(1A).
This view is well supported by following judiciary in favour of Assessee as under:
1 .ONGC vs. DCIT.
2 .P.L.Hauwel Trailers Ltd vs. DCIT.
3. CIT vs. Kumudam Publications Pvt. Ltd
The ratio of the decisions can be imported for Online payment also where deposit of tax or TDS is made by the Assessee on or before due date , and there is delay committed by the Bank in Crediting the amount so collected to the account of the Treasury.
In short,
Date of tendering of Cheque to the Bank has to be treated as date of deposit of Tax or TDS provided cheque is not dishonoured.
Similarly in the case of Online deposit of Tds or Tax date of deposit shall be treated as the date when amount is debited in the Bank account of the Assessee.
Asssessee shall not be responsible for Delay occurs on the part of the collecting Banker for collection of the Cheque or Remittances of the amount so collected to the Govt. Account.
Resultantly, Assessee shall not be held as Default towards late deposit so as to suffer interest under section 234C,234B or under section201(1A).
