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Facts
The assessee, a partnership firm, filed its return of income for AY 2008-09 and claimed TDS credit. The AO denied the TDS credit as it was not reflected in the 26AS statement. The assessee argued that 26AS was not mandatory for this period and TDS certificates were provided.
Held
The Tribunal held that the assessee's conduct, including a significant delay in filing the appeal before the CIT(A) and the late filing of a rectification petition, did not demonstrate sufficient cause for condonation of delay. The Tribunal confirmed the CIT(A)'s order.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was liable for condonation. Whether TDS credit can be allowed without its reflection in Form 26AS for AY 2008-09.
Sections Cited
143(1), 203AA, 205, 220(2), 154, 250(6), 5
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH : HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
ORDER PER MANJUNATHA G, A.M. : This appeal has been filed by the assessee against the order of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC”], Delhi, relating to the assessment year 2008-2009.
Facts of the case, in brief, are that the assessee is a partnership firm. It has filed its return of income on 26.09.2008 declaring income at Rs.21,11,790/- by claiming 2 ITA.No.1247/Hyd./2024 a refund of Rs.55,590/- arising on account of claim of Tax Deduction at Source [“TDS”] by the Government Agencies for the contract payments. The CPC has transferred the jurisdiction to the Assessing Officer at Nizamabad and he had processed the return of income and issued notice u/sec.143(1) of the Act on 30.03.2010 raising a demand of Rs.7,71,710/- without giving credit for the claim of TDS of Rs.7,08,132/-. The assessee had filed original TDS certificates given by the Government Agencies and requested the Assessing Officer to give credit for the TDS. However, the Assessing Officer had declined the request of the assessee for giving TDS credit on the ground that the purported TDS is not appearing in 26AS statement and, therefore, credit could not be given for the same. It was the contention of the assessee that as per the provisions of Sec.203AA of the Act as it existed till financial years ending 31.03.2008 the statement in 26AS is not mandatory and became mandatory only from financial year beginning from 01.04.2008. He also submitted that as per the provisions of Sec.205 of the Act, the Tax payer shall not be called upon to 3 ITA.No.1247/Hyd./2024 pay to the extent of tax deducted at source. Whereas the Central Processing Unit of the Department had adjusted the demand of Rs.8,35,180/- for the assessment year 2008-09 together with interest u/s.220(2) of the Act for non-payment of the same, from out of refund of Rs.38,68,192/- for the Assessment year 2016-2017 vide intimation communicated u/s.143(1) of the Act, dated 06.03.2016. The assessee filed rectification petition u/sec.154 of the Act before the Assessing Officer by relying on the CBDT’s circular contending inter alia, that credit for tax deducted at source should not be denied for non-appearance in 26AS and accordingly requested for the refund. However, the Assessing Officer vide order dated 31.10.2018 has rejected the petition filed by the assessee u/sec.154 of the Act on the ground that the instructions are not applicable to the assessee as the Circular relied on by the assessee is only applicable to Individuals and HUF and not to partnership firms.
4 ITA.No.1247/Hyd./2024 3. On being aggrieved, the assessee carried the matter in appeal before the learned CIT(A) with 300 days delay. The learned CIT(A) dismissed the appeal of assessee in limine as the explanation offered by the assessee was general in nature and do not qualify for the condonation of delay in absence of any plausible reasons.
4. Aggrieved by the order of the learned CIT(A), the assessee carried the matter in appeal before the Tribunal on the following grounds :
1. “On the facts and in the circumstances of the case, the Id. Commissioner of Income Tax (Appeals), NPAC, Delhi, erred in not admitting appeal on the alleged ground of delay in filing the appeal.
2. Without prejudice to the above ground, the Id. Commissioner (Appeals) erred in dismissing the appeal and thereby sustaining the order passed by the AO u/s.154 of the Income Tax Act, 1961, wherein the AO has denied the credit of TDS on the ground that TDS credit can only be given to 'individuals' or 'HUF' by relying on CBDT circular.
3. Without prejudice to the above ground, the authorities below failed to appreciate that for the Ay.2008-09 appearing of TDS in Form 26AS is not mandatory and 5 ITA.No.1247/Hyd./2024 that the credit for TDS could be given based on Form 16A.
Without prejudice to the above ground, the authorities below failed to appreciate the legal position that as per provisions of section 205 of the Income Tax Act, 1961 the Appellant could not be called upon to pay the tax to the extent to which tax has been deducted from that income.” (Tax Effect: Rs.7,71,710/-).
5. Any other ground that may be urged at the time of hearing.”
The Learned Counsel for the Assessee, during the course of hearing submitted that the assessee’s case relates to the impugned assessment year 2008-2009 by which time 26AS is not mandatory and credit should be given based on Certificate of TDS and the action of the department in not giving credit for TDS though the provisions as it existed then does not require appearance of TDS in statement 26AS and further as per the provisions of Sec.205 such demand should not be collected from the assessee/tax payer and action of the CPC in adjusting the demand raised of Rs.8,35,180/- for the A.Y. 2008-2009 together with interest u/sec.220 (2) of the Act out of the refund of Rs.38,68,192/- 6 ITA.No.1247/Hyd./2024 for the A.Y. 2016-2017, is illegal and contrary to provisions of law. He submitted that though the assessee has brought to the notice of the afore-stated facts to the notice of learned Assessing Officer duly relying on the CBDT’s circular by filing a rectification petition u/sec.154 of the Act, the same has been rejected by the Assessing Officer without appreciating the facts of the case. And in appeal before the learned CIT(A), he dismissed the appeal of the assessee in limine without deciding the appeal on merits as contemplated u/sec.250(6) of the Act. He accordingly submitted that the orders of the authorities below are not sustainable in law and needs to be set aside in the interest of substantial justice.
The Learned DR on the other hand relied on the orders of the authorities below. He submitted that there was a delay of 300 days in filing the appeal before the learned CIT(A) and in absence of plausible reasons explaining the delay, the learned CIT(A) dismissed the appeal of the assessee in limine which is based on well settled judicial precedents and, therefore, he submitted that 7 ITA.No.1247/Hyd./2024 the order of the learned CIT(A) be confirmed in the interest of justice.
We have heard the arguments of both the parties and perused the material available on record. Admittedly, the learned CIT(A) had dismissed the appeal of assessee in limine by not condoning the delay of more than 300 days on the ground that reasons given by the assessee for not filing the appeal does not give any ‘sufficient cause’ for condonation of delay. Learned Counsel for the Assessee argued that the assessee could not file the appeal before the learned CIT(A) on or before the due date provided under the Act due to the reasons beyond it’s control in as much as the partnership-firm were carrying out works at Raichur of Karnataka and the order passed by the Assessing Officer was not brought to the notice of the Firm or to him by the Counsel who are representing the assessee before the Assessing Officer. In this regard, the Counsel for the Assessee has referred to petition filed by the assessee before the learned CIT(A) along with affidavit of Shri Ramesh Reddy who claimed to have representing the case of the assessee 8 ITA.No.1247/Hyd./2024 before the Assessing Officer and argued that the appellant has filed petition u/sec.154 of the Act before the Assessing Officer for rectification of the assessment order passed by the Assessing Officer u/sec.143(1) of the Act by not allowing credit for TDS even though the assessee has filed relevant TDS Certificates. Since there is ‘sufficient cause’ for the assessee in not filing the appeal, the learned CIT(A) ought to have condone the delay in filing of the appeal. However, the learned CIT(A) dismissed the appeal of the assessee in limine even though the assessee has made-out the case for condonation of delay. We find that the reasons given by the assessee along with affidavit of Mr. Ramesh Reddy does not come under ‘resonable/sufficient cause’ as provided under the Act for condonation of delay which is evident from the conduct of the assessee where the assessee is negligent of his proceedings before the Assessing Officer which is very much evident from the fact of the assessment order passed by the Assessing Officer dated 30.03.2010 denying credit for TDS. Whereas, the assessee filed rectification petition u/sec.154 of the Act on 31.03.2016 after a period of more 9 ITA.No.1247/Hyd./2024 than six years from the date of the passing of the assessment order dated 30.03.2010. Further the Assessing Officer has rejected the application filed by the assessee u/sec.154 of the Act on 31.12.2018. However, the assessee filed appeal before the learned CIT(A) on 29.11.2019 with huge delay of more than 300 days, in our considered view, going by the conduct of the assessee right from the beginning it appears that the assessee is not pursuing it’s case before the authorities and thus the order of the learned CIT(A) in rejecting the appeal filed by the assessee in limine for delay in filing of the appeal cannot be faulted. This view is fortified by the decision of Hon’ble Supreme Court in the case of M/s. Kolte Patil Developer Pvt. Ltd., vs. CIT 2017- TIOL-185-SC wherein it has been held that when there is no explanation given for delay in filing of the appeal, such delay in filing cannot be condoned. Similar view has been taken by Hon’ble Bombay High Court in the case of Subodh Prakash vs. JCIT 2017-TIOL-2249-HC-P&H-IT wherein it has been held when the explanation submitted by the appellant does not satisfy the test of ‘sufficient cause’ as 10 ITA.No.1247/Hyd./2024 required u/sec.5 of Limitation Act, 1963, the delay cannot be condoned. We, thus, confirm the order of the learned CIT(A) and accordingly, the arguments/grounds raised by the assessee in the instant appeal are rejected.
In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 03.03.2025 Sd/- Sd/- [VIJAY PAL RAO] [MANJUNATHA G] VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 03rd March, 2025 VBP Copy to Laxmi Siddharth Transmissions LLP, 6-2-200/40/B-9, 1. New NGOs Colony, Subhash Nagar, Nizamabad The ACIT, Circle-1, Aayakar Bhavan, Subhash Nagar, 2. Nizamabad. 3. The Pr. CIT, Hyderabad. 4. The DR ITAT “A” Bench, Hyderabad. 5. Guard File. //By Order// //True Copy//
Sr. Private Secretary, ITAT, Hyderabad Benches, Hyderabad.