INDIAN STANDARD LOAN TRUST XLIII,MUMBAI vs. ACIT (TDS)1(2), MUMBAI

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ITA 2257/MUM/2022Status: DisposedITAT Mumbai24 August 2023AY 2019-207 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeals without proper consideration. For one year, the CIT(A) dismissed the appeal for delay without giving the assessee an opportunity to explain. For the other year, the CIT(A) denied an adjournment and dismissed the appeal without discussing the merits.

What were the facts?

The assessee, a securitization trust, paid Excess Interest Spread (EIS) without deducting TDS. The Assessing Officer held that TDS was deductible under Section 194LBC and raised a demand for tax and interest. The CIT(A) dismissed the assessee's appeals for two assessment years, one for delay and the other for denial of adjournment.

What were the issues?

Whether the CIT(A) correctly dismissed the appeals on grounds of delay and denial of adjournment without a proper hearing on merits. Whether TDS was deductible on Excess Interest Spread under Section 194LBC.

Which sections of the Income-tax Act were involved?

Section 194LBC,Section 201,Section 201(1A),Section 133A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI PRASHANT MAHARISHI, AM & SHRI NARENDER KUMAR CHOUDHRY, JM

For Appellant: Mr. Niraj Seth, Adv
For Respondent: Mr. H.M. Bhatt, Sr. AR
Hearing: 10.08.2023Pronounced: 24.08.2023

is filed by the India Standard Loan Trust XLIII, Mumbai (the assessee / appellant) against the appellate order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] dated 14thJuly, 2022, wherein the appeal filed by the assessee against the order passed on 24th January, 2020 by OSD TDS Circle 1(2), Mumbai under Section 201/ 201 (1A) of the Income-tax Act, 1961 (the Act), was dismissed.

3.

Assessee is aggrieved, raising following grounds of appeal: -

“Ground No 1: Non-applicability of section 194LBC of the Income-tax, Act 1961 ('the Act")

The Commissioner of Income-tax (Appeals) ['learned CIT(A)'] from the National Faceless Appeal Centre CIT(A) erred on facts and in law in dismissing the appeal filed against the order passed under section 201/201(1A) (the order') of the Income-tax, Act 1961 (the Act) of the Assistant Commissioner of Income- tax (TDS) - 1(2) ["learned AO'] and in upholding that TDS is to be deducted on Excess Interest Spread (EIS) paid by the Appellant.

Ground No 2: Non-grant of adjournment

The CIT(A) erred on facts and in law in rejecting the application for adjournment

Ground No 3: Levy of interest under section 201(1A) of the Act

The CIT(A) erred on facts and in law in levying interest under section 201(1A) of the Act.

The Appellant craves leave to add, to amend, alter, vary, omit or substitute the aforesaid grounds of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing of the appeal as they may be advised.”

5. The assessee preferred the appeal before the learned CIT (A). The learned CIT (A) found that appeal of the assessee delayed by 23 days and no reason for such delay was available and hence, it cannot be condoned, therefore, the appeal of the assessee was dismissed in limini. The learned CIT (A) in Para no.5.1 of his order mentioned that assessee requested for adjournment for generation of form no.26A of the Act which was rejected and the appeal

6.

For Section 201 of the Act amounting to ₹1,11,34,624/- and further interest of ₹3,58,474/-. The appeal before the learned CIT (A) was in time but on merits adjournment was denied for generating online form no 26 A and so met with similar fate and therefore, there is an appeal.

7.

The learned Authorized Representative submitted a paper book containing 124 pages. It was further stated that identical issue arose in case of Nirmaan Rmbs Trust Series V 2014, Mumbai in & 2231/Mum/2022 and order is awaited. The learned Authorized Representative submitted that the learned CIT (A) should have condoned the delay which is nominal. Even on the merits, the learned CIT (A) has not heard the assessee.

8.

The learned Departmental Representative also submitted that assessee did not file an application for condonation of delay and therefore, the learned CIT (A) has dismissed the appeal of the assessee. Further, there is no discussion on the merits of the case.

9.

We have carefully considered the rival contentions. The fact shows that assessee has not filed an application for condonation of delay before the learned CIT (A) for delay in filing of appeal by 23 days for A.Y. 2018-19. Admittedly, it is the prerogative of the learned CIT (A) that if there is

10.

Further, the appeal of the assessee for A.Y. 2019-20, is not at all delayed. The assessee sought sometime for generation of form no.26A however, the learned CIT (A) did not give any time but dismissed the appeal of the assessee.

12.

In the result, both the appeals are allowed for statistical purposes.

Order pronounced in the open court on 24.08.2023.

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