ITAT Rules in Favor of Dream11, Drops ₹1.23 Crore Interest Levy

• The Income Tax Appellate Tribunal (ITAT) Mumbai bench ruled in favor of Sporta Technologies Pvt. Ltd. (Dream11's parent company), deleting an interest levy of ₹1.23 crore under Section 234C of the Income Tax Act.
• The Centralised Processing Centre (CPC) had levied interest, alleging a delay in the third installment of advance tax payment, as the challan bore a tender date of December 16, 2023, one day beyond the due date.
• Dream11 contended it initiated the electronic payment via net banking on December 15, 2023, and the amount was debited from its Axis Bank account on the same day, but the challan was generated on December 16 due to system issues.
• The ITAT observed that bank statements confirmed the ₹196 crore debit on December 15, 2023, and the challan generated on December 16 carried the same bank reference number, proving timely payment initiation.
• The tribunal emphasized that taxpayers should not be penalized for system-related delays beyond their control, reinforcing that the payment initiation date, not challan generation date, is crucial for timeliness.

Why It Matters: ITAT ruled that system delays cannot penalize taxpayers, dropping ₹1.23 crore interest on Dream11.