SHREE VINDHYA CAST COATERS LIMITED,JALGAON vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1, JALGAON

The assessee has filed the following grounds of appeal : ITA No. 1116/PUN/2025, AY 2020-21 Ground No. Grounds of Appeal Tax effect relating to each Ground of appeal (Rs.) 1 That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified and erred in dismissing the appeal of the appellant by rejecting the condonation petition filed for delay in filing of appeal in Form 35 without considering submissions of the appellant. - 2 That on the facts and in the circumstances of the case, the Ld. A.O. was not justified and erred in levying late fees u/s 234E for FY 2019-20 (Q4) without considering that the delay is due to the fact that the company was 15,400/- Insolvency & Bankruptcy Code, 2016. 3 That the appellant craves leave, to add, to amend, modify, rescind, supplement, or alter any of the grounds stated here-in-above, either before or at the time of hearing of this appeal. -

The sole grievance of the assessee in all the captioned six appeals is that the Ld. Assessing Officer (“AO”) has levied late fee u/s 234E of the Income Tax Act, 1961 (the “Act”) and interest u/s 201(1A) of the Act for delay in filing the respective TDS returns. The Ld. AR has submitted a brief overview of the facts involved in the above six appeals which is reproduced below :

The assessee filed appeals for all the six AYs before the Ld. CIT(A)/NFAC challenging the action of the Ld. AO in levying fee u/s 234E and interest u/s 201(1A) of the Act. The Ld. CIT(A)/NFAC has dismissed the appeals of the assessee for non-condonation of delay in filing the appeals before him without deciding the issue(s) on merits on the ground that the assessee has failed to substantiate that there was sufficient cause for filing the appeals belatedly.

Dissatisfied, the assessee is in appeals before the Tribunal and all the grounds of appeal relate thereto.

The Ld. AR submitted that the assessee had filed an application for condonation of delay before the Ld. CIT(A)/NFAC providing the detailed reasoning for delay in filing the appeals (pages 1 to 63 of the paper book refers). The Ld. AR submitted that the Ld. CIT(A)/NFAC without considering the same rejected the condonation application of the assessee. He dismissed the appeals filed by the assessee without considering the merits of the case which is totally unjustified. He submitted that the delay in filing of the appeals before the Ld. CIT(A)/NFAC was attributable to the following reasons : “1.2 Appellant Company was under IBC Process: The appellant was non-operational since the year 2006 and subsequently admitted to Corporate Insolvency Resolution Process (CIRP) under Insolvency & Bankruptcy Code, 2016 on 31-05-2019 by Hon'ble National Company Law Tribunal (the NCLT), Mumbai Bench. The Resolution Plan was finally approved on 21-06-2021 [Refer PB Page No. 39 to 48] and thereafter management of the company was handed over to the Resolution Applicant on 07-12-2021. [Refer PB Page No. 73 to 75]. Hence, from the period 31-05-2019 to 07-12-2021, the company was under IBC proceedings and the handover of the management of the company was pending with Resolution Professional (RP).

3 Non availability of login credentials of e-filling account: Post- handover of management by the RP, the new management was unable to login to the e-fling portal as the password of the said portal was not in the knowledge of the present personnel & RP and there was no communication with the prior management. In order to activate the e-filing account, the new management sent a mail to efilingwebmanager@incometax.gov.in [Income tax department helpline contact details) on 06-08-2022 [Refer PB Page No. 62]. Several diligent attempts were further made to resolve the aforementioned problem, via numerous grievances, emails and telephone conversations [Refer PB Page No. 120-121]. Subsequently, an email communication was received from Income tax department on 27-02-2023 [Refer PB Page No. 63] whereby the password of the income tax portal was reset and the appellant was allowed to access the e-fling portal. Hence, from the period 07-12-2021 to 27-02-2023, the appellant could not file the appeal due to non-availability of login credentials of its e-filling account. Immediately thereafter, the appellant, acting diligently and in good faith, duly filed Form 35 online at its e-filling account against Intimation u/s 200A for the various quarters pertaining to FY 2019-20 to FY 2021-22 as stated in the table above.

4 Therefore, the delay in filing of appeal in form 35 by the appellant was clearly due to bona fide reasons not on account of any fault of the appellant. There was no delay caused due to apathy or ignorance, but rather due to a lack of operational control (non-access to login credentials) and procedural discontinuity during the CIRP.

5 The appellant in addition to above would also like to submit that in respect to appeals mentioned at Sr No. 4, 5 & 6 of the table above ile appeals w.r.t Q4 of FY 20-21 and Q 2 & 3 of FY 21-22, Form 35 was duly filed with the Income Tax Department via email dated 27-07- 2022 at efilingwebmanager@incometax.gov.in as a measure of compliance to due date prescribed under the Act ie 27-07-2022. [Refer PB Page No. 9 to 21 for Q4 of FY 20-21, Page No. 24-36 for Q2 of FY 21-22 & Page No. 49 to 61 of Q3 of FY 21-22].” 7. As regards the levy of late fee u/s 234E and interest u/s 201(1A) of the Act, the Ld. AR made the following submissions :

1 Reason for delay in filing TDS Returns:

2 It is respectfully submitted that the aforesaid delays in TDS return filing & delay in deposit of TDS were beyond the control of the New Management of the Company and hence could not be held liable for such defaults due to reasons stated herein below.

We have heard the Ld. Representatives of the parties and perused the material available on record as well as paper book filed by the Ld. AR on behalf of the assessee. Admittedly, the assessee filed TDS returns on quarterly basis for the relevant AYs under consideration belatedly. The TDS returns were processed vide intimation u/s 200A of the Act wherein the CPC-TDS/AO has levied fees u/s 234E of the Act for delay in filing the TDS returns. We find that the Ld. CIT(A)/NFAC has dismissed the appeals of the assessee as not maintainable on technical grounds without deciding the issue(s) on merits. The Ld. CIT(A)/NFAC has dismissed the appeals of the assessee observing that there is an extraordinary delay in filing of the appeal(s) and the assessee has not shown any sufficient cause as required by the proviso to section 249 of the Act. Before us, the Ld. AR has submitted that the assessee is a public limited company and was non- operational since 2006. It underwent IBC proceedings from 31.05.2019 to 07.12.2021. Consequently, the management of the company was handed over to the new management by the Resolution professional. This process took some time which led to the delay in filing appeal(s) before the Ld. CIT(A)/NFAC. He contended that the assessee had a reasonable/sufficient cause for the delay in filing the appeals before the Ld. CIT(A)/NFAC as well as the delay in filing the TDS returns. The delay was caused due to the bonafide reasons cited above which were beyond the control of the assessee. The said delay in filing the appeal(s) and TDS returns was not intentional or out of ignorance but occurred on account of non- availability/non-access of login credentials of e-filing account of the Department.

We find some force in the arguments advanced by the Ld. AR. The Ld. Counsel for the assessee has submitted that from the period from 31.05.2019 to 07.12.2021 the assessee company was under IBC proceedings and the handover of the management of the company was pending with the Resolution Professional. Post-handing over of the management to the new management, the assessee faced several operational difficulties which led to the delay in filing of the appeals and TDS returns within the stipulated time period. We find that the Ld. CIT(A)/NFAC has not condoned the delay in filing the appeals before him holding that the assessee has failed to substantiate that there was sufficient cause for not filing the appeals within the prescribed time frame and the assessee has as such failed to explain the unreasonable delay satisfactorily. In our view, there was sufficient cause for the delay in filing the appeals before the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC is silent on the merits of the case and not decided the issue(s) raised by the assessee before him.

We find, the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. reported in 167 ITR 471 (SC) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 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.

We find recently the Hon’ble Supreme Court in the case of Inder has held as under: “14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient cause, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined, it should not be scuttled merely on the basis of limitation.”

In the light of the above factual matrix of the case and decisions of Hon’ble Supreme Court cited (supra), we deem it proper, in the interest of justice, to set aside the impugned order(s) and restore the appeal(s) back to the file of the Ld.CIT(A)/NFAC with a direction to condone the delay in filing of all the six appeals before him and decide the appeals on merits, as per facts and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make its submissions, as may be required/called upon on the appointed date without seeking any adjournment, unless required for a sufficient cause, failing which the Ld.CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeals of assessee in ITA Nos. 1116 to 1121/PUN/2025 are allowed for statistical purposes.

अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 5. ग र्ड फ़ इल / Guard File.