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e-TDS deposit and e-Return Filing Due Date if it falls on Sunday or Holiday

e-tds-deposit-and-e-return-filing-due-date-if-it-falls-on-sunday-or-holiday

e-TDS deposit and e-Return Filing Due Date if it falls on Sunday or Holiday: There is a lot of confusion among the taxpayers as to the due date of payment of tax and TDS and filing of Income Tax Return (ITR) when the due date falls on Sunday or a Bank Holiday. Whether the due date of payment of tax including TDS and filing of return of income gets extended automatically to the next working day or not and if yes how the same affects the interest and other defaults. It assumes more importance in the electronic era when the tax and TDS and return of filing is done on an online system which works 24 x 7 throughout the year.

The issue of TDS payment due date when it falls on a holiday or bank strike and other tax payments, as well as filing of return of income, is discussed in this article with the aid of CBDT Circulars and decided judicial precedents apart from the legal provisions.

Let us begin with the filing of income tax returns. In other words, what shall be the due date of filing of return if the due date falls on a day which is public holiday or Sunday.

Section 139(1) of the Income Tax Act, 1961 requires every person, be it an individual, a firm, a company, etc.  to furnish its return of income on or before the due date as prescribed in section 139(1) for the previous year in the prescribed form. Different due dates have been prescribed for furnishing the return of income in different cases as detailed below-

Categories
Due Date
Where the assessee is-
(i) a company; or
(ii) a person covered by mandatory provisions of Tax Audit under Income Tax Act, 1961 or under any other law; or
(iii) a partner of a firm whose accounts are subject to compulsory Tax Audit under Income Tax Act, 1961 or under any other law


31st October
An assessee who is required to furnish a report referred to in section 92E
30th November
Any other assessee
31st July

[The above due dates for filing of return of income for AY 2020-21 has been extended as per an announcement of the Finance Minister on 13.05.2020. Read this for details.]

Prior to 2004, there was only one physical mode available to furnish a return of income. At that time a one had to physically visit the jurisdictional Income Tax Office to file his return of income. Since then the system of online filing of the income tax return was introduced which eliminated the requirement to visit the income tax office in order to file one’s return of income or ITR. Initially, the e-filing of ITR was made compulsory for corporate assessees and thereafter gradually the scope of compulsory e-filing was expanded and at present all are compulsorily required to e-file their ITR. The only exception is given to a very senior citizen who is aged 80 years and above and file return of income in ITR-1 (Sahaj) or  ITR-4 (Sugam). [Rule 12 of Income Tax Rules, 1961]

In the manual era of paper filing of return of income on the due date was not possible if the same falls on Saturday/Sunday. Since on Saturday/Sunday the income tax offices remain closed.

In this context section 10 of the General Clauses Act, 1897 comes to rescue to the income tax return filers. 

Section 10 in The General Clauses Act, 1897 reads as follows-

10. Computation of time - 

(1) Where, by any Central Act or Regulation made after the commencement of this Act, 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 the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open: 

Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877 (15 of 1877) 20 , applies.

(2) This section applies also to all Central Acts and Regulations made on or after the fourteenth day of January, 1887.

According to this section, 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 the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the court or office is open.

Therefore, if say, 31st July is a Sunday and the Income Tax office remains closed on that day then any return filed on 1st August shall be deemed to have been filed on the due date if 1st August is a working day and is not declared as a public holiday for any reason including strike.

In this respect CBDT has issued a Circular on 13th November 1992 vide Circular No. 639 to clarify that where the last day for filing return of income/loss is a day on which the office is closed, the assessee can file the return on the next day afterwards on which the office is open and, in such cases, the return will be considered to have been filed within the specified time limit.

This means no interest or penal consequences will follow.

However, do remember that this relaxation shall apply only if the office remains closed on the last day of the due date. If the last day or due date falls on Sunday or a holiday but if the office remains open for the limited purpose of accepting the returns then this provision will not come to rescue.

It happened many times in the past that the income tax department had kept the offices open on the last day or due date even if it was a Sunday or a holiday for the purpose of accepting returns.

In this context, an Order of CBDT issued on 20.10.2004 is reproduced below to clarify the position.

Order U/s 119(1) of the Income Tax Act, 1961

The last date for filing of return within the meaning of Explanation 2(c) to Section 139(1) of the Income Tax Act, 1961 had been extended from 31st July, 2004 to 31st October, 2004. The last date for filing of return in the case of corporate assessees, assessees whose accounts are required to be audited U/s 44AB and assessee filing returns under first proviso to section 139(1), is 31st October, 2004. The 30th and 31st October, 2004 being holidays (Saturday and Sunday), the Income tax authorities are hereby directed to make arrangements for accepting returns of income on 30th and 31st of October, 2004. The direction is issued for administrative convenience. Further, any returns filed on 01.11.2004 will be deemed to have been filed within due date in view of the Board's Circular No. 639 dated 13.11.1992

The CBDT had expressly clarified even though the offices will remain open on Sunday, 31st October for accepting returns, any return filed on November 1 shall also be deemed to have been filed within the due date. This nature of clarifications actually reduces litigation.

The above discussion when the manual paper-based filing of return of income was in vogue.

E-filing era: The situation has entirely changed in the era of e-filing of returns where returns can be filed on a 24/7 basis and without having any nexus with the opening or closing of the income tax offices.
Online ITR can be filed even on a holiday and during non-working hours. 

Under these circumstances, whether any ITR filed on e-filing portal 1st August will be deemed to have been filed within the specified time limit. 

Legally, the answer is ‘yes’.

In this context, it is pertinent to note that the above Circular No. 639 dated 13-11-1992 has not been withdrawn yet, it is still in force.

Secondly, section 10 of the General Clauses Act, 1897 does not make any distinction between the online and manual filing of return.

However, there are certain issues in the era of online filing of ITR which makes filing on 1st August as debatable.

1. There is no need to physically visit any office of the income tax department and hence there is no restriction or limitation on an assessee to file his ITR on the last day/due date even if it is a holiday.

2. There is no restriction imposed on filing of return on a holiday or in non-working hours. Rather it is one of the most prominent advantages of the e-filing system and the government encourages it.

3. The IT system or software will automatically consider the return filed on or after the due date as a belated return unless the date is extended by an order of the CBDT.

Reference may be drawn to an Order of the CBDT dated 29.07.2016 which has extended the due date of 31st July 2016 (Sunday) to 5th August 2016. The said order reads as follows-

Order under Section 119 of the Income-tax Act, 1961

On consideration of reports of Bank strike on 29th July, 2016 (Friday) and the 31st July, 2016 (Sunday), being a Bank-Holiday, in order to avoid any inconvenience to the taxpayers while making payment of taxes pertaining to returns of income for Assessment Year 2016-2017 , which are required to be filed by 31st July, 2016 as per provisions of Section 139(1) of Income-tax Act , 1961, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961, hereby extends the ‘due­ date’ for filing such returns of Income from 31st July, 2016 to 5th August, 2016, in case of taxpayers throughout India who are liable to file their Income-tax return by the said ‘due­ date’

Since in this case, the due date is itself extended there is no need to make any reference to the General Clauses Act.

Therefore, from the above discussion it appears that in the era of e-filing or online filing of returns, one can file the return of income even on a holiday or Sunday and despite the Board’s Circular of this effect, the same will be of little help more particularly in cases where the online filing of return is compulsory.

Technical failure or server down problem: Whether the same will apply in case return could not be filed due to technical failures. The answer is ‘No’. This is because technical failures are not the closure of offices.

In case of such failures, generally, CBDT extends the due date. If no such date is extended, then one has to go to court only for appropriate resolution. In some of the past years, we have seen that due dates for return filing have been extended due to technical glitches.

Tax Payment if the due date falls on Sunday or holiday

Similar is the issue in case of payment of advance taxes and TDS payment due dates. As we know, TDS is required to be paid by 7th of next month except for the month of March where the due date is April 30.

Advance Taxes are also required to be paid quarterly on 15th June, 15th September, 15th December and 15th March.

Will the due date be extended to the next day if the TDS payment due date falls on a Sunday or Holiday.

In this case also, section 10 of the General Clauses Act, 1897 will give the benefit of making the payment on the next working day.

In this case also CBDT has issued a clarification vide Circular No. 676 dated 14-1-1994. In the circular, based on the section 10 of the General Clauses Act, 1897, it was 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.

Even though the Circular is issued with reference to payment of advance taxes only, the same also extends to payment of TDS. Refer Rule 125 of Income Tax Rules, 1962.

Hence, accordingly, if the bank is closed (due to Sunday or holiday or strike) on the due date of payment, the same can be paid on the next working day. There will not be any interest or penal consequences.

The circular was also issued in the non e-payment of taxes era. 

As per Rule 125 of the Income Tax Rules, 1962 (as amended by Notification No. 34/2008 dated 13.03.2008), the following persons are mandatorily required to pay tax electronically on or after the 1st day of April, 2008-
(a) a company; and
(b) any other person to whom the provisions of section 44AB (Compulsory tax audit) are applicable.

Further, it is clarified by CBDT Circular No. 5/2008 dated 14.07.2008 that a taxpayer can make electronic payment of taxes from the account of any other person. However, the challan for making such payment must clearly indicate the PAN/TAN of the taxpayer/deductor on whose behalf the payment is to be made. It will not be necessary for the assessee to make payment of taxes from his own account in an authorized bank. It was also clarified in Board's Circular No. 5/2008 dated 14.07.2008 that the payment of any amount by a deductor by way of tax deducted at source (TDS) or tax collected at source (TCS) shall fall within the meaning of 'tax' for the purpose of Rule 125.

The system of e-payment of taxes works on a 24/7 basis. Any bank holiday or strike does not affect or impede the e-payment of taxes or TDS. Even those who are not compulsorily required to make e-payment of taxes can make the payment online through net-banking or debit card.

Therefore, the situation has changed after the introduction of e-payment of taxes. The relaxation of making the payment on next working day, if the due date of payment of taxes falls on a holiday or Sunday, will not apply in the e-payment era, more particularly, those who are subject to compulsory e-payment of taxes.

In this context, the following decision of ITAT, Bangalore in the case of ITO vs Karnataka Power Transmission Corporation Ltd. (ITA No.35/Bang/2012) is noteworthy.

In this case, the assessee is a company and has physically remitted the TDS amount for the month of March 2009 on 8th April, 2009 against the due date of 7th April, 2009 and the day was a public/bank holiday on account of Mahavir Jayanti. However, the bank debited the aforesaid amount on 9th April, 2009.

In another instance, the assessee had remitted the TDS amount on 6th April, 2009, which was well within the period of limitation, but due to negligence on the part of the banker, the said amounts were debited to the assessee's account only on 9th April, 2009. 

The Assessing Officer levied interest for delay in the making of payment u/s 201(1A) and passed an order u/s 201(1) of the Income Tax Act, 1961.

Aggrieved with the order, the assessee filed an appeal before the first appellate authority.

The learned CIT(A) allowed the appeal of the assessee and held that the date of presentation of the cheque should be taken as the date of payment, since admittedly in this case, cheques were honoured. The Ld. CIT(A) also held that when the due date of payment of tax deducted was a holiday, the assessee was justified in making the payment on the next date without appreciating the fact that the assessee is a company and is precluded from payment of taxes in banks through physical challans.

The ITAT has remanded the case back to the CIT(A) for an afresh adjudication in the light of Rule 125 which was made effective from 13/3/2008. It held that since the assessee is a company, it was mandatory for it to have paid the taxes electronically. Since the learned CIT(A) did not deal with these issues, the Tribunal deemed it fit and proper to restore the matter to the file of CIT(A) for denovo consideration.

Though the Tribunal did give any conclusion, but the ratio of the decision clearly establishes that the relaxation provided in section 10 of the General Clauses Act, 1987 is not of much help in case of an assessee which is compulsorily required to e-pay the taxes including TDS in case the due date falls on a bank holiday.

In an another case of Ajmer Vidyut Vitran Nigam Ltd. vs DCIT(TDS), CPC, Ghaziabad (ITA No. 494/JP/16) ITAT, Jaipur held that 

In this case also the assessee, a company, has deposited the TDS on 8-8-2009 against the due date of 7-8-2009. A bank strike was called on August 6th and 7th.

Before the Tribunal, the assessee relied on section 10 of General Clause Act, 1897 according to which the next working day should be treated as the due date. The assessee also relied upon the Board’s Circulars no 676 dt 14/01/1994 and 639 dated 13/11/1992.

The Ld. CIT (Appeals) did not allow the appeal because of mandatory provision for charging interest u/s 201(1)(a) and there is no provisions in the Act for condonation of the delay in payment of TDS even due to reasonable cause of bank Strike.

In this case, the ITAT has allowed the appeal of the assessee relying upon the CBDT’s  Circular No. 676 dated 14.1.1994.

It is pertinent to note that the department did not raise the ground of Rule 125 notified from 13.03.2008 mandating compulsory e-payment of taxes including TDS by a company before the Tribunal. Neither CIT(A) had dealt with it. Hence, this judgment cannot be relied upon by the assessee as a precedent.

Further, it is pertinent to note that the ITAT Bangalore has rendered the decision on 19.04.2013 whereas the ITAT Jaipur pronounced its decision on 03.08.2017. The decision of the Bangalore Tribunal is more appropriate in the present circumstances.



Bare text of the Circulars and the Provisions

SECTION 211 - INSTALMENTS OF ADVANCE TAX
1197. Whether, in case last day for payment of any instalment of advance tax is day on which receiving bank is closed, assessee can make payment on next immediately  following working day, and in such cases mandatory interest leviable under sections 234B and 234C would not be charged

1. 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 instalments 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 instalments (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.
Circular : No. 676, dated 14-1-1994.

797. Where last day for filing of income/loss return is a day on which income-tax office is closed, assessee can file return on next day afterwards on which office is open and return will be considered to have been filed within specified time limit

1. Representations have been received by the Board seeking clari­fications as to whether, the assessee could file a return of income/loss under the Income-tax Act, 1961 on the next working day following a holiday and claim it to have been filed within the statu­tory time limit.

2. The matter has been examined in consultation with the Ministry of Law and the Board are advised that, in such cases, section 10 of the General Clauses Act, 1897 will be applicable. According to this section, 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 the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the court or office is open.

3. In view of the above, it is hereby clarified that where the last day for filing return of income/loss is a day on which the office is closed, the assessee can file the return on the next day afterwards on which the office is open and, in such cases, the return will be considered to have been filed within the specified time limit.

4. This clarification also applied to the returns under other direct tax enactments.

Circular : No. 639, dated 13-11-1992.

Rule 125 of the Income Tax Rules, 1962

Electronic payment of tax.

125. (1) The following persons shall pay tax electronically on or after the 1st day of April, 2008:—
(a) a company; and
(b) a person (other than a company), to whom the provisions of section 44AB are applicable.
(2) For the purposes of this rule :-
(a) "pay tax electronically" shall mean, payment of tax by way of—
(i) internet banking facility of the authority bank; or
(ii) credit or debit cards;
(b) the word "tax" shall have the meaning as assigned to it in clause (43) of section 2 of the Act and shall include interest and penalty.

Section 2(43) of the Income Tax Act, 1961

Section 2

(43) "tax" in relation to the assessment year commencing on the 1st day of April, 1965, and any subsequent assessment year means income-tax chargeable under the provisions of this Act, and in relation to any other assessment year income-tax and super-tax chargeable under the provisions of this Act prior to the aforesaid date and in relation to the assessment year commencing on the 1st day of April, 2006, and any subsequent assessment year includes the fringe benefit tax payable under section 115WA.


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