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Facts
The assessee's assessment for AY 2018-19 resulted in disallowances under Section 37 and additions under Section 40(a)(ia) for TDS non-compliance. The CIT(A) dismissed the assessee's appeal due to a 741-day delay in filing without condonation, leading the assessee to appeal to the ITAT with a further 162-day delay, citing the director's ill health.
Held
The ITAT condoned the 162-day delay in filing the appeal before it and found reasonable cause for the 741-day delay before the CIT(A). It set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication on merits, subject to the assessee paying a cost of Rs.10,000/-.
Key Issues
Whether the delays in filing appeals before the CIT(A) and ITAT should be condoned, and if so, whether the additions/disallowances made by the AO should be adjudicated on merits.
Sections Cited
194H, 194, 37, 40(a)(ia), 143(3)
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R. RAGHUNATHA
सुनवाई की तारीख/Date of Hearing : 03.06.2025 घोषणा की तारीख/Date of Pronouncement : 12.06.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2018-19, dated 26.07.2024.
The brief facts of the case are that the assessee is a Private Limited Company, engaged in the field of investments and financial markets. The assessee filed the return of income for the A.Y. 2018-19 on 31.10.2018 declaring total income of Rs.14,44,670/-. The case was selected for scrutiny assessment under CASS for the reason “Large payments made by the :-2-: ITA. No:737 /Chny/2025 assessee u/s.194H of the Act to persons who have not filed returns of income for the relevant assessment year and default in TDS and disallowance”. The AO issued statutory notices calling for details in support of payments made to various persons by deducting TDS u/s.194 of the Act, but those persons have not filed their return of income. On perusal of the submissions made by the assessee the AO found that the assessee has not complied with the TDS provisions in respect of payments made of Rs.1,81,99,898/-, out of which the commission payment of Rs.23,20,334/- has been disallowed u/s.37 of the Act and on the balance amount of Rs.1,58,79,564/- 30% has been added to the income u/s.40(a)(ia) of the Act. Aggrieved by the order u/s.143(3) of the Act dated 14.05.2021 of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC.
The ld.CIT(A), NFAC upheld the order of the AO by dismissing the appeal of the assessee as not admitted, without condoning the delay in filing the appeal of 741 days before the first appellate authorities.
Aggrieved by the order of the ld.CIT(A), NFAC, the assessee preferred an appeal before us with a delay of 162 days.
At the outset, we find that there is a delay of 162 days in appeal filed by the assessee, for which petition for condonation of delay along with reasons. The assessee submitted an affidavit for the delay stating that the delay is caused due to ill health of the director of the Company. After considering the petition filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we
:-3-: ITA. No:737 /Chny/2025 condone delay in filing of appeal and admit appeal filed by the assessee for adjudication.
Per contra, the ld.DR submitted that the assessee is negligent in responding to the notices of the department and filed the appeal before the ld.CIT(A) with a delay of 741 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 an exparte order by not condoning the delay in filing the appeal of 741 days before the first appellate proceedings. We note that the assessee had filed the appeal before the ld.CIT(A) belatedly due to health reasons. 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.10,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of 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.
:-4-: ITA. No:737 /Chny/2025 9. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 12th June, 2025 at Chennai.