E-payment Era: If the last day of payment is a holiday or a day on which bank is closed, Whether interest is leviable for delay? – CA Naresh Jakhotia
There is a CBDT has issued long back a circular No. 676 dt. 14th Jan., 1994 [116 CTR (St) 49] which has clarified that if on the last day of payment of instalments of advance tax the receiving bank is closed, the payment can be made on the next working day and no interest under section 234B will be charged in such a case.
The said circular is not withdrawn yet which means that even if the assessee have a e-payment facility, still the due date of payment get extended to the next working days.
Now the question arises, what if the CBDT circular would not have ben there? Whether the provision of section 10 in the General Clauses Act, 1897 can provide immunity in case the taxpayer is backed by the e-payment option of bank?
Let us compare it with another example of income tax return filing. If the last date of income tax return due date is Sunday then whether the return could be filed on Monday so as to avoid the late fee?
It is worthwhile here to visit section 10 to the General Clause Act-1897 which provides that that where any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or on the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time after it is done or taken on the next day, afterwards, on which the Court or office is open.
In short, without the backing of the CBDT circular, the waiver form applicability of interest was not possible.
In short, in my considered opinion,
1. No interest can be levied if the payment of taxes could not be done due to closure of bank on the due date of payment. However, payment has to be done immediately on the next working day. The position would remain the same even if the assessee is having e-payment facility as the CBDT circular is not withdrawn so far.
2. In case of due date of filing income tax returns is falling on a holiday then this has to be done by that date as the filing is allowed over the portal which is available 24/7 and for all the purposes “office” is not closed for filing.
3. The rule of extension of date for payment of tax cannot be equated with the date of filing ITR.
For ease of reference, the copy of the CBDT circular Dated 676 is produced hereunder:
CIRCULAR NO. 676 DT. 14th JANUARY, 1994
Payment of advance tax in instalments by the due dates under sections 210 and 211 of the Income-tax Act—Last day being holiday—Clarification regarding
SECTION 211,, SECTION 234B, SECTION 234C
Representations have been received by the Board seeking waiver of interest chargeable under sections 234B and 234C of the Income- tax Act, 1961 for default in payment of installments of advance tax by the due dates which are prescribed under section 211 of the Income-tax Act in cases where the last date for making payment of such installments (i.e. 15th September, 15th December and 15th March) happens to be a holiday and the assessee pays the due amount of advance tax on the next working day.
2. The matter has been carefully considered by the Board and it is felt that in such cases section 10 of the General Clauses Act, 1897 will be applicable. This section lays down that where any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office (in the present case the bank which is authorised to receive payment of advance tax from the assessee) is closed on that day or on the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time after it is done or taken on the next day, afterwards, on which the Court or office (or the bank) is open. In view of this provision, it is hereby clarified that if the last day for payment of any instalments of advance tax is a day on which the receiving bank is closed, the assessee can make the payment on the next immediately following working day, and in such cases, the mandatory interest leviable under sections 234B and 234C of the Income-tax Act, 1961 would not be charged.
3. These instructions may be brought to the notice of all the Assessing Officers under your jurisdiction.
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