AP TOURISM DEVELOPMENT CORPORATION LTD.,VIJAYAWADA vs. DCIT., CIRCLE-1(1), HYDERABAD

At the outset, there is a delay of 11 days in filing the present appeal before the Tribunal. The assessee has filed an affidavit explaining the reasons for the delay. The learned counsel for the assessee, Shri Satish Kumar, C.A. referring to the affidavit filed by the assessee, submitted that the impugned order passed by the learned CIT(A), NFAC, dated 12.06.2024, was received by the assessee and the appeal could not be filed within the prescribed period, resulting in a delay of 11 days in filing the appeal before the Tribunal.

It was further submitted that the delay in filing the appeal was neither wilful nor deliberate but occurred due to unavoidable circumstances beyond the control of the assessee. The learned counsel for the assessee submitted that the assessee-Corporation,

The learned CIT-DR for the Revenue, Shri Waseem UR Rehman, on the other hand, opposed the condonation petition filed by the assessee. He submitted that, the assessee has failed to file the appeal within the prescribed period and, therefore, the delay may not be condoned. However, he fairly submitted that, the issue may be decided in accordance with law on the basis of the facts and material available on record.

We have heard both the parties, perused the petition and affidavit filed by the assessee seeking condonation of delay of 11 days in filing the appeal before the Tribunal. We find that, the reasons explained by the assessee appear to be genuine and bona fide and come under 'sufficient cause'. We further find that, the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji, reported in 167 ITR 471 (SC), has laid down certain principles for condoning the delay and directed that a lenient approach should be followed to avoid dismissal of meritorious cases on technical grounds. Going by the principles laid down in Mst. Katiji (supra), and also considering the submissions of the assessee, we condone the delay of 11 days in filing the appeal

Brief facts of the case are that, the assessee filed its return of income for the A.Y. 2018-19 declaring total income of Nil. The case was selected for Complete Scrutiny under the E-assessment Scheme, 2019 on the issues relating to non-filing of audit report, default in TDS, investments/advances/loans, default in TDS and disallowance for such default and sales turnover/receipts. The A.O. issued notices u/s 143(2) and 142(1) of the Act, calling for information and clarification on the issues under scrutiny.

The A.O. after considering the submissions of the assessee and the information available on record, observed that, the assessee had not complied with the TDS provisions and that a demand of Rs. 53,41,682/- had been raised u/s 200A for default in either deduction of tax or payment of tax so deducted. The A.O. further observed that, the assessee had shown turnover of Rs. 1,08,27,10,793/- and operating expenses of Rs. 62,00,63,604/-. Since the assessee had not furnished the break-up of expenses and supporting documents, the A.O. assumed that the operating expenses pertained to contract expenses and, by taking the TDS demand of Rs. 53,41,682/- as 2% of the contract amount, worked out the contract expenses at Rs. 26,70,84,100/-. Accordingly, the A.O. disallowed 30% thereof u/s 40(a)(ia) of the Act, amounting to Rs. 8,01,25,230/-, and added the same to the total income of the assessee. Consequently, the A.O. assessed the total income at Rs. 1,84,39,798/-.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee challenged the addition made by the A.O. u/s 40(a)(ia) of the Act and contended that the disallowance was made on the basis of an adhoc estimation of contract expenses and the TDS demand of Rs. 53,41,682/-. The assessee also challenged the methodology adopted by the A.O. in treating the entire TDS demand as 2% of the contract expenses.

The Ld. CIT(A), after considering the relevant material available on record and also taking note of the reasons given by the A.O., observed that the assessee had not effectively pursued the appellate proceedings despite being granted several opportunities and had not furnished any details, documents or submissions in support of the grounds of appeal. Accordingly, the Ld. CIT(A) agreed with the approach adopted by the A.O. and upheld the addition of Rs. 8,01,25,230/-.

Aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee, Shri Satish Kumar, C.A. submitted that, the assessee could not effectively prosecute the proceedings before the A.O. as well as before the Ld. CIT(A) and consequently, the relevant facts and supporting evidence could not be placed before the lower authorities. He submitted that the A.O. had made the impugned disallowance of Rs. 8,01,25,230/- u/s 40(a)(ia) of the Act by estimating the contract expenses on the basis of the TDS demand of Rs. 53,41,682/-. He further submitted that the Ld. CIT(A), while dismissing the appeal for non- prosecution, had not adjudicated the grievance of the assessee on merits.

The learned counsel for the assessee further submitted that the assessee may be afforded one more effective opportunity to furnish the relevant details and documentary evidence and substantiate its claim before the A.O. He submitted that the issue relating to the disallowance u/s 40(a)(ia) of the Act requires examination of the relevant records and evidences, particularly with regard to the TDS demand and the contract expenses estimated by the A.O. He, therefore, prayed that the matter may

The learned CIT-DR for the Revenue, Shri Waseem UR Rehman, on the other hand, supporting the orders of the lower authorities, submitted that, the assessee was provided several opportunities during the assessment as well as appellate proceedings, but failed to comply with the notices issued and furnish the requisite details and documentary evidence. He, therefore, submitted that there was no reason to interfere with the orders of the lower authorities. However, he fairly submitted that the matter may be decided in accordance with law.

We have heard both the parties, perused the material available on record and had gone through the orders of the authorities below. It is an admitted fact that the assessment was exparte before the A.O. as well as before the Ld. CIT(A) and the assessee failed to furnish the requisite details and supporting evidence before the lower authorities. Before us, the assessee has sought one more opportunity to furnish the relevant details and documentary evidence in support of its claim. We find that, the Ld. CIT(A), after providing several opportunities to the assessee,

In the result, the appeal of the assessee is allowed for statistical purposes.