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Facts
The assessee filed an appeal with a delay of 642 days. The delay was attributed to the non-receipt of the CIT(A)'s order, which the assessee only learned about when the department initiated recovery proceedings. The assessee had also faced a delay in filing the appeal before the CIT(A).
Held
The Tribunal condoned the delay of 642 days, noting the assessee's lack of knowledge regarding the CIT(A)'s order and the procedural nature of the delay. However, since the CIT(A) had dismissed the appeal for statistical purposes without deciding on merits, the matter was restored back to the CIT(A) for fresh adjudication.
Key Issues
Whether the delay in filing the appeal can be condoned due to non-receipt of the order, and whether the appeal should be restored to the CIT(A) for deciding on merits when it was dismissed for statistical purposes.
Sections Cited
234E, 200A
AI-generated summary — verify with the full judgment below
This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 26/07/2023 for the Assessment Year (AY) 2014-15 as per ground of appeal on record.
2. At the outset of hearing, we found from perusal of record that there is delay of 642 days in filing this appeal before this Tribunal for which, the assessee has filed an application for condonation of delay supported with affidavit mentioning the fact that no communication whatsoever regarding the dismissal of the appeal by the ld. CIT(A) was received either through registered post, ordinary mail, or any other mode of service at the registered address of the petitioner.
Consequently, the petitioner was completely unaware of the passing of the said
2 ITA1903/Chny/2025 MLS Enterprises P Ltd. Vs ITO appellate order. It was also stated by the assessee in his condonation application that the petitioner came to know about the dismissal of the appeal only when the department initiated the order giving effect (OGE) proceedings, which was the first point of intimation regarding the fate of the earlier appeal. This led to an unintentional and bona fide delay of 640 days in filing the present appeal before the Tribunal. The delay, though significant in terms of days, is purely procedural and not deliberate and arose solely due to lack of proper service and communication of the CIT(A)’s order. The assessee stated that the delay is not intentional and deliberate, the same was due to situation beyond his control. He has good case on merit and is likely to succeed, if one more opportunity is provided to the assessee. The assessee prayed to condone the delay and admit the appeal for hearing.
On the other hand, the ld. Sr.DR for the revenue on the application of condonation of delay, submitted that the assessee has not explained the reasons of delay in proper manner and only he stated that he was not aware of passing of the impugned order. Therefore, the assessee does not deserve any leniency at this stage and the appeal of the assessee may be dismissed on the ground of condonation.
We have considered the rival submissions. On the issue of condonation of delay, we find that the assessee in his condonation application mentioned that no communication whatsoever regarding the dismissal of the appeal by the ld. CIT(A) was received either through registered post, ordinary mail, or any other mode of service at the registered address of the assessee. The assessee was 3 ITA1903/Chny/2025 MLS Enterprises P Ltd. Vs ITO completely unaware of the passing of the appellate order by the ld. CIT(A). The assessee only came to know about the dismissal of the appeal only when the department initiated the order giving effect (OGE) proceedings, which was the first point of intimation regarding the fate of the earlier appeal. Considering the above facts and circumstances of the case, we find merit in the contention of assessee that he has no knowledge about passing of the impugned order. The assessee has not got benefitted for filing the appeal belatedly before the Tribunal. Thus, we condone the delay of 642 days in filing this appeal before the Tribunal and admit the same for hearing.
On merit of the case, the ld. AR of the assessee submitted that the assessee is a company engaged in the business of manufacturing of boilers and providing fabrication services under the trade name “MLS Enterprises Private Limited”. For the assessment year under consideration, the assessee had filed its TDS returns belatedly and consequently TDS demand amounting to Rs. 2,61,600/- under Section 234E of the Income Tax Act, 1961 (in short, the Act) was levied under Section 200A of the Act for all the quarters of the relevant assessment year 2014-15. It was further submitted by the ld. AR that the assessee should not be penalized by paying the demand which is not leviable as per Section 234E of the Act. The intimation order passed under Section 200A of the Act is erroneous on the fact that there is no enabling provision under Section 200A for levy of penalty under Section 234E of the Act prior to 01/06/2015. The ld. AR submitted that the amendment vide Finance Act, 2015 with regard to levy of penalty under Section 234E for processing of quarterly TDS returns statements under Section 4 ITA1903/Chny/2025 MLS Enterprises P Ltd. Vs ITO 200A of the Act is prospective in nature and the same cannot be applied retrospectively. The ld. AR of the assessee relied on the order of this Tribunal in case of Alfha Coach Builders Vs ITO in & 33 /Chny/2025 dated 15/07/2025 where the same Bench of this Hon’ble Tribunal has deleted the late fee charged under Section 234E of the Act in the intimation issued under Section 200A of the Act for the processing of quarterly TDS return filed by the assessee.
The ld. Sr.DR, on the other hand, supported the orders of the lower authorities.
We have considered the rival submissions, we find that there was also delay on the part of assessee to file appeal before the ld. CIT(A) within stipulated time period. The ld. CIT(A) vide the impugned order, dismissed the appeal of the assessee for statistical purposes and did not decide the appeal on merit. Before us, the ld. AR submitted that what has been stated in the application filed for condonation of delay before the Tribunal that delay was not deliberate and purely due to lack of receipt of communication regarding dismissal of appeal by the first appellate authority and there was no malafide intention. An affidavit to this effect has also been filed by the assessee which is placed on record. Since the ld. CIT(A) has not decided the issue on merit, the matter is restored back to the file of ld. CIT(A) to decide the issue afresh by providing adequate opportunity of being heard to the assessee subject to the payment of cost of Rs. 10,000/- paid to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within 30 days from the date of receipt of this order. The proof of the same will be furnished by the assessee before the ld. CIT(A) who shall proceed for hearing the appeal on merits. The assessee is also directed to make
5 ITA1903/Chny/2025 MLS Enterprises P Ltd. Vs ITO necessary compliance before the ld. CIT(A) and provide all necessary documents and evidences to substantiate its claim. In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes only.
In the result, this appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 26/09/2025.