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Facts
The assessee filed TDS returns late for the fourth quarter of FY 2012-13, resulting in a late filing fee of Rs. 14,600/- and interest of Rs. 9,782/-. The assessee's appeal before the CIT(A) was dismissed due to a delay of over six years, with the CIT(A) deeming the delay inordinate and without sufficient cause.
Held
The Tribunal held that the CIT(A) erred by not inquiring into the assessee's claim of not being aware of the order and by dismissing the appeal in limine due to inordinate delay. The Tribunal noted that the delay period included the COVID-19 pandemic, during which limitation periods were waived, and restored the matter to the CIT(A) for a decision on merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal as not maintainable due to inordinate delay without proper inquiry, and whether the delay should have been condoned considering the circumstances including the COVID-19 pandemic.
Sections Cited
234E, 220(2), 200A, 249(2)(C), 249(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW ‘A’ BENCH, LUCKNOW
A.Y. 2013-14 Jamuna Devi Naresh Chandra vs. The ITO-TDS, Mahavidyalaya, 44, Orai, Kanpur Matapurwa, Jalaun-285001 PAN:KNPJO1461F (Appellant) (Respondent) Assessee by: None Revenue by: Sh. Sanjeev Krishna Sharma, DR Date of hearing: 05.05.2025 Date of pronouncement: 21.05.2025 O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed against the orders of the ld. CIT(A), NFAC, dismissing the belated appeal of the assessee on the grounds that there was no sufficient cause for the condonation of delay and therefore the appeal was not maintainable. The grounds of appeal are as under:-
1. BECAUSE, the CIT(A)/NFAC has erred in fact, without appreciation the fact, dismissed the appeal, which is illegal, bad in law, arbitrary and deleted.
02. BECAUSE, the CIT(A)/NFAC has erred in fact, without appreciation of the fact and upheld the fee amounting to Rs.24,382/- in late filing of TDS return in 24Q Q4 and ignoring/overlooking the CBDT Circular No. 19 of 2015 dated 27.11.2015, in which it is clear mentioned that delay filing fee of TDS return will be waiver prior to 01.06.2015.
03. That on the facts and in the circumstances of the case and in law, the impugned notices u/s 200A of the Act for computation and intimation for payment of fee cannot be issued as the TDS returns relate to quarter ending before 01.06.2015. So, the fee imposed is liable to be quashed.
A.Y. 2013-14 Jamuna Devi Naresh Chandra Mahavidyalaya 04. That not only TDS was paid before 01.06.2014 but also TDS Return was filed before 01.06.2014. So, the fee u/s 234E cannot be charged while processing the TDS Return. So, the fee imposed is liable to be quashed.
BECAUSE, the CIT(A)/NFAC as well as AO added an amount of Rs.24,382/- as late filing levy of interest u/s.220(2) of the Act, in filing of TDS return in 24Q Qtr.4, which is illegal, bad in law arbitrary and not maintainable as per CBDT Circulars, hence be deleted.
6. BECAUSE CIT(A)/NFAC as well as ITO TDS CPC has failed to appreciate the fact of the assessee, whereas TDS deducted and deposited within time there are no loss of revenue of the Central Government only return in Form 24Q was file late, whereas the CBDT has waive the fee for late filing of the TDS return in form 24Q upto F.Y. 2014-15, the fees imposed is arbitrary, and liable to be quashed.
BECAUSE, the assessee craves leaves to add or amend the grounds of appeal before the appeal is finally heard or disposed.
2. The appeal is late by 31 days. The assessee has submitted a condonation petition pointing out that said order passed by the ld. CIT(A), NFAC on 30.04.2024 was received by the local counsel on the same date but the appeal against the same could not be filed on time because the local counsel was busy with filing of Income Tax Returns for the assessment year 2024-25 and therefore, there was delay in filing the appeal. It was prayed that the delay in the filing of the appeal was beyond the control of the assessee and citing the judgments of the Hon’ble Patna High Court in the case Ashok Automobile Ranchi (P) Ltd. vs. State of Bihar (1988) 174 ITR 566 (Pat) and that of the Hon’ble Supreme Court in Collector of Land Acquisition vs. MST. Katiji (1987) 167 ITR 471 (HC), the assessee prayed that the delay in the filing of the appeal be condoned and the appeal may be adjudicated on the basis of the grounds on which relief had been sought. After considering the matter, in the interest of justice, the appeal is admitted and taken up for hearing.
The facts of the case are that the assessee filed TDS return for the quarter four of F.Y. 2012-13 in Form No. 24Q which was processed on 10.06.2014 levying late filing fee under section 234E of Rs.14,600/-. Subsequently, it seems that the A.Y. 2013-14 Jamuna Devi Naresh Chandra Mahavidyalaya assessee also filed a correction statement but the TDS CPC, on processing of the said correction statement reiterated the late filing fee of Rs.14,600/- and also levied interest under section 220(2) amounting to Rs.9,782/- of the I.T. Act, 1961. The assesssee went in appeal before the ld. CIT(A), NFAC on 29.12.2020 and before the ld. CIT(A), it was submitted that all TDS amounts had been credited to Income Tax Department through Challan within the prescribed period. However, the TDS CPC had levied late filing fee of Rs.14,600/- and interest of Rs.9,782/- upon the assessee. It was submitted that there were only ¼ employee and great workload upon that employee and there was no proper knowledge of filing of TDS return in form 24Q. It was submitted that the assessee Mahavidyalaya was located at Orai in District Jalaun (U.P.). This was a very interior district in which there was no TIN facilitation centre nor any senior tax consultant sitting there. There was also no permanent connectivity of internet facilities in the college and most of the work was done manually. Due to these circumstances, timely TDS return could not be filed within the prescribed period. It was submitted that the only outstanding dues were on account of this late filing fee and interest thereon and CBDT had issued several circulars from time to time for waiver of late filing levy. Therefore, it was submitted that the late filing fee and the interest may kindly be waived. The ld. CIT(A) noted that as per Form No.35, the order under section 201 of the Act had been passed on 10.06.2014 and the intimation order was served on 1.01.2020, whereas the appeal was filed on 29.12.2020, which was beyond the statutory time limit provided for filing of appeal. As per section 249(2)(C), the appeal was to be presented within 30 days after its service. However, in the present case, the appeal had been filed beyond time limit with a delay of more than six years. Reproducing the provisions of section 249 in his order and relying upon the decision in the case of Senior Bhosale Estate(Huf) vs. ACIT (Civil Appeals No.6674-6676 of 2010) the ld. CIT(A) noted that the appeal could only be admitted if the assessee showed sufficient cause for the delay. The assessee A.Y. 2013-14 Jamuna Devi Naresh Chandra Mahavidyalaya had submitted that its counsel had corrected the demand in the Traces and was under the bonafide belief that the correction had already been accepted in view of CBDT Circulars issued from time to time for waiver of late filing levy. But when the assessee’s counsel downloaded the default summary from traces website on 26.12.2020, it was found that in spite of CBDT Circulars, the TDS CPC could not waive the levy of late filing of TDS returns in Form 26Q. Since, there was no deliberate intention of not filing the appeal in time, the delay in filing the appeal may please be condoned. The ld. CIT(A) considered the matter in the light of this explanation and held that this was a case of inordinate delay. He pointed out that the Hon’ble Supreme Court in the case of Vedabai @ Vaijayanatabai Baburao Patil vs Shantaram Baburao Patil (2002) reported in 122 taxman 114 has made a distinction between delays that were trivial and delays where extraordinarily large delays had occurred. The Court had held that while cases of trivial delays had to be liberally considered, cases of inordinate delays had to be approached cautiously. Relying upon this judgment, the ld. CIT(A) held that the assessee did not have any sufficient cause in terms of section 249(3) of the Act for not presenting the appeal within the prescribed period. He, therefore, dismissed the appeal as not maintainable and did not pronounce decision on the matter on its merits.
Aggrieved with this dismissal of its appeal, the assessee has filed this appeal before us. On the appointed date of hearing, when the case was called out, nobody was present on behalf of the assessee. However, in view of the facts of the case which we were assisted in understanding by Sh. Sanjeev Krishna Sharma, ld. Sr. DR, we deem it fit to proceed with the case.
5. The assessee has filed an extensive statement of facts before us in which it has been submitted that the person responsible for filing TDS statement filed Form No.24Q of the fourth quarter late. However, these were filed voluntarily and before any issue of notice. While processing TDS returns, the ld. AO charged fee under A.Y. 2013-14 Jamuna Devi Naresh Chandra Mahavidyalaya section 234E for late filing of TDS returns. The assessee filed first appeal to the NFAC, which was dismissed on 30.04.2024 and against such dismissal, the assessee was in appeal on the matter. It was submitted that the ld. CIT(A) had erred in not following para 47.3 and 47.20 of Circular No. 19 of 2015 dated 27.11.2015 which were the explanatory notes to the provisions of the Finance Act, 2015. It was submitted that this provision was only applicable w.e.f. 1.06.2015 and not to earlier assessment orders as the existing provisions of section 200A of the Income Tax Act, 1961 did not provide for determination of fee payable under section 234E of the Act at the time of processing of TDS statements. Therefore, the addition made in this regard was not maintainable and the appeal of the assessee was liable to be accepted. It was further submitted that the ld. CIT(A), NFAC had erred in not following the judgment of the Hon’ble Karnataka High Court in the case of Fatheraj Singhvi and Others reported in 289 CTR 602. Neither was this judgment distinguished nor was it referred to in the decision. It was submitted that prior to 1.06.2015, fee under section 234E could not be charged while processing the return of TDS under section 200A of the Act. Since the provisions of section 200A had only been amended w.e.f. 1.06.2015, fee of Rs.24,382/- charged under section 200A for the period prior to 1.06.2015 was liable to be deleted. Reliance was placed on the decision of the Hon’ble Chandigarh Bench of the ITAT in the case of Himachal Pradesh Gramin Bank vs. The ITO (TDS) in dated 16.06.2022, wherein late fees charged under section 234E has been deleted on the basis of the judgment of the Hon’ble Karnatka High Court in the case of Fatheraj Singhvi and Others (supra). Since clause C to F of sub section 1 of section 200A only had prospective effect and did not have a retroactive character. Resultantly, the intimation for payment of fee under section 234E could not be made in purported exercise of the power under section 200A, for the respondent for the period of the respective assessment year prior to 1.06.2015. The assessee placed reliance on various judgments issued by various Courts, the details of which were A.Y. 2013-14 Jamuna Devi Naresh Chandra Mahavidyalaya cited in its submission. It further submitted that in the event of any adverse decision being there, the benefit should be given to the assessee in view of the decision of the Hon’ble Supreme Court in CIT vs. Vegetable Products Limited 88 ITR 192 (SC). Accordingly, it was prayed that the fees may kindly be quashed.
On the other hand, Sh. Sanjeev Krishna Sharma, ld. CIT DR arguing the case on behalf of the Department submitted that the issue in question here was that the assessee had not exercised its right of filing of appeal within the appropriate time frame but had come to the ld. CIT(A) after a gap of almost six years. Hence, the appeal had been justifiably dismissed in limine and ought not to be entertained.
7. We have duly considered the facts and circumstances of the case. It is observed from the Form No.35 filed by the assessee that the assessee claims that the order dated 10.06.2014, was only received by it on 1.01.2020. The ld. CIT(A) has not enquired into this claim of the assessee but has classified the case as one of inordinate delay on account of the large hiatus in the passing of the order under section 200A and the date of filing the appeal. To our mind, without enquiring into, when or whether the assessee was actually served with the order, it was not proper to hold the period of delay as six years or to hold that there was inordinate delay. We notice, that in the case of Senior Bhonsle Estate (HUF) vs. ACIT in various civil appeals disposed vide common order dated 7.11.2019, the Hon’ble Supreme Court condoned a delay of 1754 days on the grounds that the Revenue could not refute the contention of the assessee, that it was not aware about the order. Thus taking the cue from such order, it is held that in an absence of any inquiry to dispose the assessee’s claim that it was not aware about the order dated 10.06.2014, we hold that the ld. CIT(A) was not justified in dismissing the case of the assessee in limine.
We observe from the record that subsequent to the receipt of the order, the assessee had filed a correction statement which had been processed on 1.1.2020 and A.Y. 2013-14 Jamuna Devi Naresh Chandra Mahavidyalaya it is this date which is cited as the date of receipt of order. We further observe the fact that the assessee has claimed that after filing the correction statement, the counsel did not bother to check the TDS statement up till 24.12.2020, presuming that the correction would have been done. However, it was only when he discovered that the earlier demand had been reiterated and interest under section 220(6) been levied that the appeal before the ld. CIT(A) was filed. We observe from the submissions made before the ld. CIT(A) that the assessee was located in a remote area where there was no TIN facilitation center nor any tax consultant sitting there to assist it in the preparation of its returns or appeals and there is no permanent connectivity of internet facilities in the office of the assessee as most of its work done manually. Therefore, it is plausible that the assessee was entirely dependent on the counsel who had filed the correction statement on its behalf and this would explain the delay in filing the appeal even after processing of the correction statement. We also notice that much of the period of the delay between the processing of the correction statement and the filing of the appeal is covered by the Covid 19 Pandemic in which periods of limitation were waived by the Hon’ble Supreme Court in Suo Moto Writ Petition (Civil) No. 3 of 2020, therefore, we are of the opinion that the ld. CIT(A), should not have dismissed the case in limine and decided the issue on its merits. We take note of the judgment of the Hon’ble Supreme Court in the case of M.S.T. Katiji vs. Collector Land Acquisition (1987) 2 SCC 107, in which the Court has held that ordinarily a litigant does not stand to benefit by delay and there is no presumption that a delay is occasioned deliberately or on account of culpable negligence or malafides and therefore, refusing to condone a delay can result in a meritorious matter being thrown out at the very threshold and the very cause of justice being defeated. Therefore, we restore the matter back to the file of the ld. CIT(A) to consider the arguments of the assessee on their merits and to decide the case