BHRUHAT BENGALURU MAHANAGARA PALIKE [BBMP],BENGALURU vs. INCOME TAX OFFICER [TDS], WARD- 1(1), BANGALORE

The assessee, Bruhat Bengaluru Mahanagara Palike (BBMP) is a local authority overseeing the development and provision of civic amenities of the city of Bengaluru. In consideration for acquisition of land for the purpose of providing civic amenities and infrastructure, the Assessee provided Development Right’s Certificate(DRC). According to the revenue the Assessee ought to have deducted tax at source on the market value of the DRC u/s.194LA of the Act and since the Assessee failed to deduct tax at source, the AO passed two orders both dated 17.3.2015 holding the assessee as an assessee in default u/s.201(1) of the Act and levied interest on the tax not deducted at source u/s.201(1A) of the Act.

Against the order of the AO, the assessee preferred appeal before CIT(A). There was a delay of 598 days in filing appeal before CIT(A) physically and further delay in filing the appeal online (1077 days). The delay in filing the appeal upto the date of the appeal being physically filed is relevant and the filing of appeal online as per legal requirements cannot be viewed as delay technically. The assessee explained the delay in filing the appeal as owing to the reason that the order appealed against was served on the assessee on 20.03.2015 during the general election to Lok Sabha and the officials of the BBMP were preoccupied with statutory duties relating to election. Due to the above reason, the order of the AO could not be communicated to the officials and had to file the appeal before CIT(A). The officials came to know about the non-filing of the appeal only when the online filing of the appeal was made mandatory. Thereafter, the certificate copies were collected and appeal was filed after obtaining the legal opinion from the tax consultant. It was contended that the delay in filing was not willful or malafide. The assessee relied on the decision of the Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. MST Katiji 66 STC 228 (SC).

The CIT(A) refused to condone the delay in filing the appeal by holding that there was an inordinate delay in filing the appeal and that there was a difference of opinion between normal delay and inordinate delay. In this regard, the CIT(A) referred to the decision of the ITAT Bench in the case of JCIT Vs. Tractors & Farm Equipments Ltd. 104 ITD 149 . The CIT(A) was also of the view that the assessee should prove it was diligent and no guilty of negligence and in this regard referred to the decision of the Hon’ble Supreme Court in the case of Ramla v. Rewa Coalfields (AIR 1962 SC 361) and the decision of the Hon’ble Supreme Court in the case of Chief Post Master General and Others Vs. Living Media India Pvt. Ltd. (2012) 348 ITR 7. The CIT(A) accordingly refused to condone the delay. Aggrieved by the order of the CIT(A), the assessee has preferred the present appeal. Apart from challenging the action of the CIT(A) in dismissing the appeal on the ground that the appeal was belatedly filed, the assessee has also challenged the orders of the AO on merits on the ground that similar issue has already been decided by the Hon’ble High Court of Karnataka in assessee’s own case for Assessment Year 2010-11 and 2011-12 in favour of the assessee.

The learned Counsel for the assessee submitted that the action of the CIT(A) in refusing to condone delay was not correct as the reasons attributed for the delay are proper and sufficient cause. In this regard, learned Counsel submitted that when the issue is fully covered by the decision of the Karnataka High Court, the existence of delay in filing the appeal cannot be the basis to defeat the legitimate rights of the assessee. In this regard, reference was made by the learned Counsel for the assessee to the decision of this Tribunal in the case of M/s. Raghavendra Constructions Vs. ITO in ITA No.425/Bang/2012 dated 14.12.2012. On merits of the case, the learned Counsel relied on the decision of the Hon’ble Karnataka High Court in assessee’s own case for

As far as the merits of the appeals of the Assessee is concerned, it was brought to the notice of the Bench by the learned AR for the assessee that the identical issue for Assessment Years 2010-11 and 2011-12 in the assessee’s own case was considered at length by a Co-ordinate Bench of this Tribunal and decided in favour of the assessee and against Revenue in its order in ITA Nos.719 and 720/Bang/2014 dated 14.11.2014. It was also submitted that the aforesaid order of the Tribunal (supra) was upheld by the Hon’ble High Court of Karnataka when it dismissed Revenue’s appeal by order in ITA Nos.94 and 466 of 2015 dated 29.09.2015. The learned AR prayed that in view of the aforesaid binding decision of the Hon’ble Karnataka High Court in the assessee’s own case (supra), the impugned orders of the CIT(A) be set aside and the assessee’s appeals be allowed. The learned DR supported the orders of the authorities below; but prayed that the matter be set aside to the file of the CIT(A) for adjudication on merits.

We have considered the rival contentions and perused and carefully considered the material on record; including the judicial pronouncements cited. We do not concur with the prayer of the learned DR that the matters in these appeals; i.e., the applicability of the provisions of section 194LA, the section 201(1) / 201(1A) of the Act; in the case on hand be restored to the file of the CIT(A); as in our view, that would only prolong proceedings; more so when this issue is covered in favour of the assessee by the binding decision of the Hon’ble Karnataka High Court in the assessee’s own case for Assessment Years 2010-11 and 2011-12 vide order in ITA Nos.94 and 466 of 2015 dated 29.09.2015, wherein it has upheld the Tribunal’s order in ITA Nos.719 and 720/Bang/2014 dated 14.11.2014. In its decision (supra), the Hon’ble Karnataka High Court has considered the issue in detail, both on facts and in