24 March 2008
Tax payment by cheque : Controversy on the dates - H.P.AGARWAL/ASHISH GUPTA (2000) 108 TAXMAN (TAX LITERATURE) 221.
CHEQUE PAYMETNS- WHEN AN ASSESSEE RECEIVES A CHEQUE AS PAYMENT FOR GOODS SOLD, AND THE CHEQUE IS NOT DISHONOURED, THE PAYMENT RELATES BACK TO THE DATE OF RECEIPT OF THE CHEQUE AND IN LAW THE DATE OF PAYMENT IS THE DATE OF DELIVERY OF THE CHEQUE - CIT VS. OGALE GLASS WORKS LTD. (SC) [1954] 25 ITR 529(SC)
ADVANCE TAX - Payment by cheque relates back to date of delivery of cheque. Followed CIT Vs OGALE GLASS WORKS (P) LTD. 25 ITR 529. - CIT Vs BHARAT MOTOR SERVICE.
TAX DEDUCTION AT SOURCE - SOME COMMON DOUBTS :: The Supreme Court in the case of CIT v. Ogale Glass Works Ltd. [1954] 25 ITR 529 held that the cheques not having been dishonoured but having been cashed, the payment related back to the dates of receipt of the cheques and in law the dates of payments were the dates of the delivery of the cheques, The same is the postition as per rules 79 and 80 of the Central Treasury Rules. However, with effect from June 1, 1983, rule 20 of the Central Government Account (R & P) Rules, 1983 has been substituted for the Central Treasury Rules in respect of all transactions pertaining to the Central Government. This said rule reads as under : Government dues tendered in the form of a cheque or draft which is accepted under the provisions of rule 19 and is honoured on presentation shall be deemed to have been paid - where the cheque or draft is tendered to the bank - on the date on which it was cleared and entered on the receipt scroll. The AAR in P.No. 2 of 1994 in Advance Ruling No. P. 2 of 1994, In re. [1996] 221 ITR has upheld the applicability of C.G. Account (R & P) Rules to income-tax payments., [2001] 116 TAXMAN 16
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