RAM NIWAS AGARWAL,BANGALORE vs. INCOME TAX OFFICER, WARD - 3(1), BANGALORE

Aggrieved by the aforesaid orders, the assessee filed appeals before the CIT(A). The assessee’s contention before CIT(A) was that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012. Section 200A of the Act is a provision which deals with how a return of TDS filed u/s.200(3) of the Act has to be processed and it reads as follows:-

The CIT(Appeals) found that the appeals were filed by the Assessee on 10.4.2017 and were filed belated and there was application for condonation of delay in filing the appeals. The Assessee claimed before CIT(A) that the controversy regarding levy of interest u/s.234-E of the Act was not clear and clarity emerged only after the decision of the Hon’ble High Court of Karnataka in the case of Fatheraj Singhvi (supra) and that the Assessee under the bonafide impression that levy of fee u/s.234E of the Act is not appellable and were advised not to file any appeal against the levy of fee u/s.234E of the Act. The Assessee submitted that the intimation u/s.200A of the Act was uploaded in the system and he does not know how to log into the system. He came to know about the passing of the intimation u/s.200A of the Act only on receipt of notice of demand including the levy of late fee u/s.234E of the Act. The Assessee submitted that he was running a Page 5 of 8 small business and has to look after all the affairs himself. He was not aware of the that the appeal has to be filed within a time frame from the date of the intimation u/s.200A of the Act which was not served on him but was only uploaded in the system. The Assessee therefore submitted that a liberal view has to be taken in the matter of condonation of delay.

The CIT(A) found that there was inordinate delay in filing the appeals and those details have been set out in the order of CIT(A) as follows:

The CIT(A) referred to decisions of Supreme Court in the case of Ramlal Vs. Rewa Coalfields Ltd. AIR 1962 361 (SC) and the decision in the case of Chief Postmaster General and Others Vs. Licving Media India Ltd. 348 ITR 76 (SC) ;and Pundlik Jalam Patil (deceased) by LRs Vs. Executive Engineer, Jalgaon Medium Project (2008) 17 SCC 448 (SC) and observed that as per the law laid down in the aforesaid decisions, cause for the delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause and that if there is negligence, want of bonafide and inaction on the part of the Assessee then the delay cannot be said to be owing to reasonable cause.

The CIT(A) thereafter refused to condone the delay in filing appeals and dismissed all the appeals. The CIT(A) was of the view that filing of TDS returns is online since many years and details of intimation and demand become immediately available online to the Assessee. The Assessee was using the website of the Department to file its quarterly TDS returns. So Page 6 of 8 details of pending demands was not dependent on the knowledge of any specific person but the Assessee has neglected to follow it up either by payment or by filing the appeal. He therefore held that the Assessee cannot deny that the information related to TDS demand arising out of processing of TDS return and as reflected in Form 26AS was not available to him.

Aggrieved by the order of the CIT(A), the Assessee has preferred appeals before the Tribunal. None appeared for the Assessee. The learned DR reiterated the stand of the revenue as reflected in the order of the CIT(A).

We have considered the submissions of the learned DR and also the grounds of appeal filed by the Assessee. It is not in dispute that if the ratio laid down by the Hon’ble Karnataka High Court in the case of Fateeraj Singhvi (supra) is applied then the levy of interest u/s.234-E of the Act would be illegal for returns of TDS in respect of the period prior to 1.6.2015. The present appeals of the Assessee relate to TDS returns filed prior to 1.6.2015. The decision of the Hon’ble Karnataka High Court in the case of Fateeraj Singhvi (supra) was rendered on 26.8.2016. It has been held by the ITAT Hyderabad Bench in the case of MSV IT Solutions Ltd. Vs. ITO, Ward 16(4) & 178/Hyd/2018 order dated 26.10.2018 wherein on identical facts noticing that there was no legal remedy prior to 1.6.2015 against an intimation u/s.200A of the Act, the Hyderabad Bench condoned delay in filing appeal before CIT(A). The CIT(A) has proceeded to hold that the Assessee is guilty of negligence on a presumption that the Assessee must be conversant with operating TDS return on the website of the Department and that the intimation u/s.200A could not have escaped his attention. In our view in a case like this the benefit of doubt should go to the Assessee. Therefore, the Assessee is not guilty of negligence and the delay was due to bonafide reasons set out above. As per the ratio laid down by the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. Mst. Katiji & others AIR 1987 1353 (SC) delay should be condoned where there is no negligence. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained

Considering the reasons given by the Assessee for condonation of delay and keeping in mind that technicalities should not stand in the way of rendering substantive justice, we are of the view that the delay in filing the appeals deserves to be condoned. Accordingly the delay is condoned. Since the CIT(A) has not decided the issue on merits, the order of the CIT(A) is set aside and remanded to the CIT(A) with a direction to decide the appeals of the Assessee on merits in accordance with law with due opportunity to the Assessee of being heard.

In the result, all the appeals by the assessee are treated as allowed for statistical purpose.