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Facts
The assessee, Hotel Shevaroys Pvt Ltd, failed to deduct TDS under Section 194A on interest payments of Rs. 2,58,47,160/- made to M/s. Religare Finvest Limited during AY 2017-18. The Assessing Officer raised demands for non-deduction. The assessee filed an appeal before the Ld. CIT(A) with a delay of 582 days, which the Ld. CIT(A) dismissed without condoning the delay.
Held
The Income Tax Appellate Tribunal condoned the 582-day delay in filing the appeal before the Ld. CIT(A), noting it was due to financial liquidity issues. In the interest of justice, the Tribunal remitted the matter back to the Ld. CIT(A) for fresh adjudication on merits, subject to the assessee paying a cost of Rs. 50,000/- (Rs. 25,000/- for each quarter) to the State Legal Aid Authority.
Key Issues
1. Whether the delay of 582 days in filing the appeal before the CIT(A) should be condoned. 2. Non-deduction of TDS on interest payments under Section 194A of the Income Tax Act.
Sections Cited
201(1), 201(1A), 194A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश /O R D E R PER S. R. RAGHUNATHA, AM :
These two appeals by the assessee are filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-18, vide separate orders dated 19.03.2025.
Brief facts are that the assessee is a domestic company engaged in running hotels. As per the information available with the department in respect of :-2-: ITA. No:1604 & 1605/Chny/2025 TDS remittance inspection was conducted on 04.10.2017. On perusal of books of accounts of the Company, the AO observed that the defaults have been found u/s.201(1)/201(1A) r.w.s.194A of the Act in respect of interest payment have been paid to the tune of Rs.2,58,47,160/- to M/s.Religare Finvest Limited and the corresponding TDS had not been deducted u/s.194A of the Act at the rate of 10% i.e., Rs.25,84,749/- during two quarters (2nd & 3rd Quarters) for the A.Y.2017-18. The AO, TDS ward, Salem, created demand of Rs.6,53,323/- for the 2nd quarter and Rs.6,39,610/- for the 3rd Quarter of the A.Y.2017-18 and concluded the assessment by passing an order u/s.201(1)/201(1A) r.w.s.194A of the Act dated 06.10.2017.
Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld. CIT (A), NFAC, Delhi.
Before the ld.CIT(A), there is a delay of 582 days in filing the appeal by the assessee on 11.05.2019 against the order u/s.201(1)/201(1A) r.w.s.194A of the Act. On perusal of the explanation submitted by the assessee in support of the delay in filing the appeal, the ld.CIT(A) did not convince with the explanation and reasons. Therefore, the ld.CIT(A) dismissed the appeal by confirming the order of the Assessing Officer. Aggrieved by the orders of ld.CIT(A), the assessee has filed these appeals before us.
The ld.AR submitted that the ld.CIT(A), NFAC in refusing to condone the delay of 582 days in filing the appeal and dismissing the appeal as non- maintainable is erroneous in law and opposed to facts and circumstances of the :-3-: ITA. No:1604 & 1605/Chny/2025 case. In addition, the ld.AR submitted that the ld.CIT(A), NFAC ought to have seen that the AO erred in law and in facts in raising a demand of Rs.6,53,323/- for the 2nd quarter and Rs.6,39,610/- for the 3rd Quarter of AY.2017-18 by invoking section 201(1)/201(1A) r.w.s.194A of the Act. Therefore, ld.AR prayed for one more opportunity that may be provided to the assessee to represent his case before the Assessing Officer in the interest of natural justice. Further, the ld.AR assured the bench that he will undertake to represent on behalf of the assessee before the AO, in case one more opportunity is provided.
Per contra, the ld.DR submitted that the assessee is negligent and failed to file the appeal in time and filed the appeal before the ld.CIT(A) with a delay of 582 days and hence prayed for confirming the order of the ld.CIT(A).
We have heard rival contentions and noticed that the ld.CIT(A) has passed these orders by not condoning the delay in filing the appeal of 582 days before the first appellate proceedings. We note that the assessee had filed the appeal before the ld.CIT(A) belatedly due to financial liquidity issues and problems aggravated with various statutory authorities for non-payment of dues which lead to delay in filing appeal. Hence, in the interest of justice, we are of the considered view that the assessee needs to be given one more opportunity to prosecute the appeal on merits. Since the assessee has failed to file the appeal before the appellate authorities in time, we levy the cost of Rs.25,000/- for each quarter (2nd and 3rd quarter) of the assessment year to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of :-4-: ITA. No:1604 & 1605/Chny/2025 payment of cost to the Registry within 30 days from the date of receipt of this order.
In the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.
In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the court on 12th September, 2025 at Chennai.