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Facts
The assessee claimed TDS credit of INR 3,56,39,693, but was granted only INR 2,95,41,737, resulting in a short grant of INR 60,97,956. The assessee filed a rectification application which was rejected, leading to a delay of 510 days in filing the present appeal.
Held
The Tribunal condoned the delay of 510 days, noting the assessee's bonafide belief that the rectification application would resolve the issue. On merits, the Tribunal directed the AO to verify the short TDS credit claim after providing the assessee with proper opportunity of being heard.
Key Issues
Whether the delay in filing the appeal is liable to be condoned, and whether the assessee is entitled to the short grant of TDS credit.
Sections Cited
147, 148, 143(3), 250, 253, 154
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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SHRI OMKARESHWAR CHIDARA
Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 05/09/2023 passed by NFAC, Delhi for assessment year 2017-18 on following grounds of appeal :
1. Short grant of tax deducted at source ('TDS') amounting to INR 60,97,956 A.Y. 2017-18 Music Broadcast Limited 1.1.On the facts and in circumstances of the case, and in law, the learned CIT(A) has grossly erred in granting TDS credit only to the extent of INR 2,95,41,737 as against INR 3,56,39,693 claimed by the Appellant in the Return of Income (ROI) filed, thus resulting into the short grant of TDS credit amounting to INR 60,97,956. The Appellant craves leave to add, alter, amend or withdraw all or any of the Grounds of Appeal herein and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing.
2. At the outset the Ld.AR submitted that, there is a delay of about 510 days in filing the present appeal before this Tribunal. The application seeking condonation of delay has been filled stating as under :
2.1 The Ld.AR submitted that, the short issue to be considered on merit is regarding the short credit of TDS of Rs.60,97,955/-. He submitted that, the assessing officer while passing the assessment order failed to grant TDS to the extend of 60,97,956/-. 2.2 He submitted that, against the assessment order the assessee preferred appeal before the Ld.CIT(A), wherein the ground relating short credit was raised. 2.3 The Ld.CIT(A) while disposing of the ground observed as under : “6. Ground 4 is related to short credit of TDS wherein the Appellant Company has stated that it has filed complete details of the TDS claimed in the ROI filed by it and has requested to grant balance TDS credit of Rs. 60,97,956/-. In this regard, it is pertinent to note that the Appellant has not not been bee able to reconcile the receipts as per 26AS with the receipts reflected in P& L Account. Even in the remand report, the appellant has not been able to reconcile all the receipts with the 26AS. Therefore in such circumstances, it is not ascertainable whether the corresponding receipts related to the TDS Credit have been declared in the year under consideration. Thus this Ground of appeal is dismissed.”
3. The Ld.AR submitted that, is the after the impugned order having passed, the assessee prefered rectification petition u/s.154 to the Ld.AO. The said application u/s.154 was preferred under bonafide belief the assessing officer would be in A.Y. 2017-18 Music Broadcast Limited position to appreciate the submissions. However, the same was rejected on 22/02/2025. The Ld.AR submitted that, as the application was pending on the issue, the assessee was under bonafied belief that the assessing officer would rectify the mistake. Based on such bonafide belief, the assessee did not file appeal against the impugned order before this Tribunal, thereby the causing delay of about 510 days. 3.1 The Ld.AR thus prayed for the delay to be condoned as there exist a reasonable and sufficient casue in not preferring appeal before this Tribunal against the impugned order. 3.2 On the contrary, the Ld.DR relied on the order passed by the orders authorities below.
We have perused the submissions advance by both sides in the light of record placed before us.
It is noted that, considering the smallness of the issue the assessee choose to prefer application u/s.154 under bonafide belief that, the mistake would stand rectified. As the application u/s.154 was pending before the Ld.AO the assessee did not prefer appeal before this Tribunal. We are thus of the view that, the assessee has made out sufficient cause for delay in filling the present appeal before this Tribunal. 4.1 We note that, under such bonafide belief the assessee did not prefer an appeal before this Tribunal against this single issue. We also noted that, once reason given by the assessee is held to be bonafide with “sufficient cause”, the delay though excessive, does not assume much importance.
A.Y. 2017-18 Music Broadcast Limited 4.2 Hon’ble Madras High Court in the case of Sreenivas Charitable Trust reported in 280 ITR 357 held that, no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and should exercise their discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause" the principle of advancing substantial justice is of prime importance. Hon’ble Court also held that the expression "sufficient cause" should receive a liberal construction. Thus, for the purpose of advancing substantial justice which is of prime importance in the administration of justice, the expression "sufficient cause" should receive a liberal construction. 4.3 In opinion of this Tribunal, this decision of Hon’ble Madras High Court is applicable to the present facts of the case. A similar view was taken by Hon’ble Madras High Court in the case of Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad). 4.4 We also refer to the decision of Hon’ble Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) reported in 277 ITR 1 condoned the delay of 180 days when, the appeal was filed after the pronouncement of the Judgment of the Hon’ble Supreme Court. 4.5 It is also to be noted that the Revenue has not filed any counter-affidavit opposing the application of the assessee for condonation of delay. Hon’ble Supreme Court in the case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi reported in AIR 1978 SC 537 held that, non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause for A.Y. 2017-18 Music Broadcast Limited condonation of delay. In this case, the Revenue has not filed any counter-affidavit opposing the application of the assessee, therefore, as held by Hon’ble Supreme Court, there is sufficient cause for condonation of delay. Hon’ble Supreme Court also observed that; “It does not mean that when the delay was for longer period, the delay should not be condoned even though there was sufficient cause. Condonation of delay is the discretion of the Court/Tribunal. Therefore, it would depend upon the facts of each case. In our opinion, when there is sufficient cause for not filing the appeal within the period of limitation, the delay deserves to be condoned, irrespective of the duration/period.” 4.6 At this juncture, we also take assistance and support from the observations of Justice Krishna Iyer as he has quoted at various occasion while dealing with technicalities that “any interpretation that alludes substantive justice is not to be followed and that substantive justice must always prevail over procedural technicalities”. Even Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 has laid down a ratio of similar principles. 4.7 We are of the opinion that, the reasons assigned by the assessee in not presenting the appeal within time before Ld.CIT(A) deserves consideration based on the principles laid down by Hon'ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471. Reliance is placed on following observations by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & “The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits". The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that :
1. 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.
2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. ......................................................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.” We therefore, respectfully following the above observation condoned the delay in filling the present appeal before this Tribunal.
5. On merits of the case it is noted that, the short grant of TDS merit needs to be verified by the Ld.AO having regards to the evidences filed by the assessee. We direct the Ld.AO to verify the claim of assessee in accordance with law. Needless to say that A.Y. 2017-18 Music Broadcast Limited proper opportunity of being heard must be granted to the assessee. Accordingly the grounds raised by the assessee stands partly allowed for statistical purposes. In the result the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 21/05/2025 Sd/- Sd/- (OMKARESHWAR CHIDARA) (BEENA PILLAI) Accountant Member Judicial Member Mumbai: Dated: 21/05/2025 Poonam Mirashi, Stenographer Copy of the order forwarded to:
(1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T.