SIBY MINING AND INFRASTRUCTURE PRIVATE LIMITED,HYDERABAD vs. ITO (TDS), WARD-2(2), HYDERABAD

We take for the A.Y 2009-10 as the lead case.

The learned AR drew the attention of the Bench to Para 3.1.6 of the order passed by the Assessing Officer on 31.3.2016 which is to the following effect:

It was the contention of the learned AR that the finding recorded by the Assessing Officer was required to be rectified as payee had paid the taxes on the interest received by them therefore, the assessee has filed a rectification application u/s 154 within the statutory period before the Assessing Officer on 18.12.2017 which was to the following effect:

As the application u/s 154 of the Act was filed before the Assessing Officer for the reasons mentioned therein, the assessee presumed that the Assessing Officer has accepted the submission of the assessee after a period of six months, for that years, hence assessee has not preferred any appeal before the learned CIT (A). It was the contention of the assessee that when after a lapse of more than six years, the assessee had received recovery notice from the office of the Assessing Officer, the assessee preferred appeals before the learned CIT (A) and explained that as the application u/s 154 was not decided within six months and necessary evidence certifying deposit of tax on interest was filed before the Assessing Officer, therefore, the appeal was not preferred within time however, the learned CIT (A) had dismissed the appeals by observing as under:

It was submitted by the learned AR that the delay in filing the appeals were on account of the non-adjudication of the applications filed u/s 154 of the Act before the Assessing Officer and it was argued that the Assessing Officer should have adjudicated the applications within six months as per law u/s 154 of the I.T. Act. In view of the above, it was submitted by the learned AR that the delay in prosecuting the appeals before the learned CIT (A) may kindly be condoned and the learned CIT (A) may be directed to adjudicate the matter on merit.

Per contra, the learned DR had vehemently argued that the delay in filing the appeal before the learned CIT (A) should not be condoned and he relied upon the following decisions:

The learned DR more particularly drew the attention of the Bench to the order passed by the Tribunal in the case of Vishwabharati Mutually Aided Cooperative Credit Society Ltd vs. Income Tax Officer in to 364/Hyd/2022 for the A.Ys 2010-11, 2011-12, and 2013-14 to 2015-16 dated 13.02.2023 wherein the Tribunal in Para 14 & 15 held as under:

We also draw strength from the decision of Hon'ble Supreme Court in the case of Majji Sannemma @ Sanyasirao Vs. Reddy Sridevi and others (Civil Appeal No.7696 of 2021 dt.16.12.2021 relied upon by the ld.DR, wherein the Hon'ble Supreme Court dismissed the condonation petition. The facts of this case are identical to the facts of the present case. The Hon'ble Supreme Court at Para 6.2 had reproduced the facts of the case to the following effect : "6.2 We have gone through the averments in the application for the condonation of delay. There is no sufficient explanation for the period from 15.03.2017 till the Second Appeal was preferred in the year 2021. In the application seeking condonation of delay it was stated that she is aged 45 years and was looking after the entire litigation and that she was suffering from health issues and she had fallen sick from 01.01.2017 to 15.03.2017 and she was advised to take bed rest for the said period. However, there is no explanation for the period after 15.03.2017. Thus, the period of delay from 15.03.2017 till the Second Appeal was filed in the year 2021 has not at all been explained. Therefore, the High Court has not exercised the discretion judiciously." In our view, the facts of the present appeal are identical rather situated in a worse footing than that of the case of Majji Sannemma @ Sanyasirao (supra). Hence, the ld.CIT(A) was right in dismissing the condonation application and the appeal of the assessee. We do not find any reasons to interfere with the finding of ld.CIT(A) and accordingly, the appeal of assessee is dismissed. We have not discussed the other decisions cited by the ld.DR, mentioned hereinabove as the decision in the case of Majji Sannemma @ Sanyasirao (supra) was latest in time. Further, the decisions referred by the ld.AR were all prior to the decision in the case of Majji Sannemma @ Sanyasirao (supra) and are distinguishable on facts.”

We have heard the rival contentions and perused the available material on record. There is no dispute that the order was passed by the Assessing Officer on 31.3.2016. Further, there is also no dispute that the assessee had filed the application u/s 154 on 18.12.2017. The learned CIT (A) had duly recorded the above said findings in the impugned order for condonation of the delay in appeal. In our considered opinion the order passed by the Assessing Officer is the order which can be appealed before the learned CIT (A) in accordance with law. Similarly, the appeal lies against the order passed by the Assessing Officer u/s 154 of the Act. The assessee is a company cannot bury its head in sand for a period of six years and pipedream that the rectification application must have been decided in its favour. No documents have been shown to us demonstrating any inquiry or efforts were made by the assessee for seeking information about its application u/s 154 of the Act. The assessee has taken the things for granted and wrongly presumed that the application made by it must have been decided in favour of the assessee. In our view, the above said approach of a person like the assessee cannot be approved. The assessee should have been vigilant and take adequate steps to prosecute its applications. Further we are of the opinion that mere pendency of the application u/s 154 cannot be a ground to condone the delay in filing statutory appeals against the assessment order. Both the proceedings are independent and separate appeals lies against both the orders. In the light of the above, we do not find any error in the order passed by the learned CIT (A) whereby the learned CIT (A) refused to condone the delay. Accordingly, this part of the order whereby the learned CIT (A) has dismissed the application for condonation of delay is upheld.

However, in the later part of the order, the learned CIT (A) after holding the above, in para 7 (Supra) has noted the inaction of the Assessing Officer for not passing the order u/s 154 for a period of six years. We also echo our concern to the lethargic, callous and highly deplorable conduct of the Assessing Officer. We depreciate the same. Since the learned CIT (A) has already issued direction to the Assessing Officer to dispose of the pending applications u/s 154 of the Act, we reiterate the same directions and direct the Assessing Officer to decide the 154 applications within a period of six months from the date of passing of this order by the learned CIT (A) i.e. w.e.f. 3.4.2023. A report of the passing of the order by the Assessing Officer be sent to the Tribunal. A copy of the above said order be also placed before the learned CIT (A) for ensuring that the Assessing Officer complies the order in time granted herein above.

In the result, appeals filed by the assessee are accordingly allowed for statistical purposes.