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Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD
This appeal is filed by the assessee against the order of the Ld. CIT(A)-1, Hyderabad in appeal No.0337/2016-17/ITO, Ward-17(3), Hyd/CIT(A)-1/Hyd/2019-20, dated 02/05/2019 passed U/s. 143(3) r.w.s 250(6) of the Act for the A.Y. 2013-14.
The assessee has raised three grounds in its appeal and they are extracted herein below for reference:-
“1. The order of the Ld. CIT(A) in confirming the disallowance of expenditure U/s. 40(a)(ia) of the Act at Rs. 1,04,21,446/- for A.Y. 2013-14 and directing the A.O. to verify and allow the expenditure in the year of payment of TDS is unsustainable both in law and on facts.
2. The Ld. CIT(A) failed to appreciate that no disallowance U/s. 40(a)(ia) of the Act is warranted as the recipients have disclosed the income in their return of income and paid tax on the income as enjoined in section 201 of the Act r.w second proviso to section 40(a)(ia) of the Act. Therefore, erred in confirming the disallowance for the subject A.Y. and directing the A.O. to verify the payment of TDS and allow the same in the year of actual payment. Any other ground(s) that may be urged at the time of hearing.” 3.
At the outset, Ld. AR submitted before us that there is a delay of 65 days in filing the appeal before the Tribunal. In this regard, the assessee had filed an affidavit seeking condonation of delay wherein the reasons for not filing the appeal within the prescribed time limit was explained. For reference, the relevant portion from the affidavit is extracted herein below: - “……..
5. Mr. Radhakrishna – Sr Manager – Accounts & Finance, who use to lookafter all the income tax matters, resigned unexpectedly on 15/07/2019. The Statutory auditors also submitted their resignation on 31/07/2019. Copy of the resignation letter of Mr. Radhakrishna is enclosed herewith.
6. The Management was under the bonafide impression that Mr. Radhakrishna was on the job and the appeal has been filed. However, on a call from the Income Tax Department, in the month of August 2019 for payment of the outstanding demand, it had come to the notice of the Management that the appeal was not filed by the CFO.
The Company is into financial losses and has no much business for the past 4 years. This lead to many employees leaving the organization.
8. Since no one in the company was well equipped with the finance and tax matters, the company had to wait till the appointment of the new auditors to guide an do the needful. The company finally appointed VG Rao & Associates, as statutory auditors for the company on 5/8/2019 and requested them to look into the appeal matters of the company. The statutory auditor could not attend to the matter immediately due to preoccupation with finalization of company accounts and tax filing dead line.
Subsequently in the second week of September 2019 they consulted senior Chartered Accountant to seek inputs on the merits of the case. On his advice, the Company immediately took the steps to file the appeal.
Thus, the appellant was prevented by reasonable and sufficient cause from filing the appeal on time. Therefore in the interest of equity and justice, the appellate Authority, the appellant humbly request the Hon’ble Tribunal to admit the appeal and condone the delay of 64 days in filing the appeal ……..”
On perusal of the affidavit filed by the assessee, We are of the view that the reason for the delay was due to the sudden resignation of the assessee-company’s CFO and also due to the financial crisis of the company. Hence the assessee could not file the appeal within the stipulated time. Though the reasons advanced by the assessee for the belated filing of the appeal cannot be well appreciated, considering the issues involved in the appeal, in the interest of justice, We hereby condone the delay of 65 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits.
The brief facts of the case are that the assessee is a private limited company filed its return of income for the assessment year 2013-14 on 30/11/2013 declaring income of Rs. 6,49,96,450/-. Subsequently the case was taken up for scrutiny and assessment was completed u/s. 143(3) of the Act wherein the Ld. AO made disallowance of Rs. 1,04,31,466/- invoking the provisions of section 40(a)(ia) of the Act because the assessee had not deducted tax at source with respect to various expenditure incurred by it. On appeal, the Ld CIT (A) remitted the matter back to the file of the Ld. AO with directions to verify the applicability of section 201(1) of the Act and decide the issue on merits.
At the outset, the Ld. AR submitted before us that all the recipients has included the amount paid by the assessee as their income and filed the return of income in accordance with section 139 of the Act. The Ld. AR further requested that the matter may be sent back to the file of the Ld. AO for verification. The Ld. DR conceded to the submission of the Ld. AR.
7. We have heard the rival submissions and carefully perused the materials on record. On reading the order of the Ld. CIT (A) we find that he has remitted the matter back to the file of the ld. AO for verifying the compliance under section 201 of the Act. It is pertinent to mention that the Ld. CIT (A) does not have powers to remit back the appeal to the file of the ld. AO. However, considering the prayer of the Ld. AR we hereby remit the matter back to the file of the Ld. AO with direction to verify the documents submitted by the assessee and examine the compliance under section 201 of the Act and thereafter pass appropriate order in accordance with law and merit. Accordingly, all the grounds raised by the assessee are disposed off.
In the result, appeal of the assessee is allowed for statistical purposes.
Pronounced in the open Court on the 06th May, 2021.