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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI V. DURGA RAO & SHRI RAMIT KOCHAR
PER RAMIT KOCHAR, ACCOUNTANT MEMBER:
This appeal filed by assessee is directed against appellate Order dated 21.05.2019 passed by learned Commissioner of Income Tax (Appeals)-10, Chennai (hereinafter called “the CIT(A)”), in 19/CIT(A)-10 for assessment Year (ay) 2007-08. This appeal was heard in Open Court held in Virtual Mode through Video Conferencing Mode using Webex platform.
The grounds of appeal raised by assessee in memo of appeal filed with the Income-Tax Appellate Tribunal, Chennai (hereinafter called “the Tribunal”) read as under:-
“1The Commissioner of Income Tax (Appeals) erred in dismissing the appeal on the ground of limitation in limine.
2. The Commissioner (Appeals) erred in misconstruing the appeal as preferred against the intimation u/s 143(1) of the Act (dt. 2.03.2009) and proceedings to deal with the appeal as belated.
The Commissioner(Appeals) failed to notice that , as stated in Col. 13 of Form No. 35 the issue involved in the appeal was the ACIT rejecting the rectification application on the ground of delay and refusal to grant relief for tax withheld on foreign income ( considering US India Tax Treaty).
4. The appellant submits that he had filed an application dt. 08.01.2018 claiming credit for tax withheld /paid on his foreign (US) income and the assessing officer(ACIT, Non-Corporate Circle 22(1), Tambaram) had rejected the application by order/letter dt. 16.08.2018 ; aggrieved by the said order the appellant had preferred the appeal before the Commissioner(Appeals) on 05.09.2019 within time and the appeal was as such maintainable.
The appellant further submits that a perusal of the order dated 16.08.2018 of the assessing officer will reveal that while there is a passing reference to statutory time limit it is in word and substance an order on merits denying the relief claimed by the appellant in regard to tax paid in foreign country ; accordingly the Commissioner ( Appeals) ought to have adjudicated the appeal considering the assessing officer’s order dt. 16.08.2018 as the impugned order and as an order on merits.
The appellant submits that in confirmation of the e-filed return the appellant’s representative ( Chartered Accountant) had filed a manual return setting out full particulars of his US and India income and tax paid details claiming ”tax paid abroad” of Rs. 5,77,305/- , relief for which had been denied, together with proof of tax paid in US as enclosures to the application dt. 08.01.2018.
The appellant is advised that in a case in which Tribunal had declined to condone the delay but considered the matter on merits the Hon’ble Madras High Court has made the following observations which is apt in this appellant’s case “ Matters relating to condonation of delay were indeed discretionary and are normally left to the Tribunal and this court will not ordinarily with the discretion. In this case, as we have already pointed out, the Tribunal did not stop with the order declining to condone the delay , but considered the matter on merits and has practically treated the appeal as being properly before it and has answered the question brought before it with reference to the material placed on record. It is in the circumstances , we hold that the Tribunal was in error in not condoning the delay. The question regarding the correctness of the Tribunal’s holding that the delay is not to be condoned is therefore answered in favour of the assessee and against the Revenue” – Vijayswari Textiles Ltd vs. CIT(2002) 256 ITR 560@ Page 563.
The appellant respectfully submits that he ought not to be deprived of the relief which he deserves on the ground of delay or on the technicalities.
For these and other grounds that may be adduced at the time of hearing the appellant prays that the Hon’ble Tribunal be pleased to allow the appeal and render justice.”
3. The brief facts of the case are that the assessee is an individual and has filed its return of income for the impugned ay: 2007-08 with Revenue on 28.10.2007 , which was processed by learned Assessing Officer( hereinafter called “the AO”) u/s 143(1) of the Income-tax Act, 1961 (hereinafter called “the Act”) , wherein intimation dated 29.03.2009 was issued to the assessee by AO disallowing claim of Income-tax deducted at source( hereinafter called “ the TDS”) to the tune of Rs. 5,77,305/- for non filing of proof and thus a demand of Rs. 7,79,370/-(inclusive of interest) was raised against the assessee by Revenue. The assessee being aggrieved filed an application u/s 154 of the 1961 Act, dated 08.01.2018 ( filed on 10.01.2018 before the AO) before the AO wherein it was submitted by assessee that relief on account of taxes paid in US to the tune of Rs. 5,77,305/- was wrongly claimed as TDS , while the same was taxes paid in USA on its foreign income from USA to the tune of Rs. 22,74,660/- which income has been duly declared in the return of income filed with Indian Income-tax authorities on 28.10.2007 and prayers were made to grant credit for taxes paid in USA being relief u/s 90 of the 1961 Act. This application dated 08.01.2018 was rejected by the AO vide communication dated PAN: ADQPJ3567N/NCC-22/TBM/2018-19 dated 16.08.2018 firstly because as per AO that the assessee itself has claimed the said amount of Rs. 5,77,305/- as TDS in the return of income filed with Revenue and now it is claimed that this amount reflect credit for taxes paid in foreign country , thus the AO observed that there is no mistake apparent from record which could be rectified within mandate of Section 154 of the 1961 Act, and secondly that the said application dated 08.01.2018 is filed by assessee beyond statutory period of four years from the end of the financial year in which the order sought to be amended was passed viz. intimation dated 29.03.2009 u/s 143(1) of the 1961 Act. Being aggrieved by an order dated 16.08.2018 passed by the AO, the assessee filed first appeal with learned CIT(A) on 05.09.2018 , who was pleased to dismiss the appeal of the assessee vide appellate order dated 21.05.2019 on the grounds that the appeal was filed with learned CIT(A) with delay of 3417 days beyond the time prescribed u/s 249(2) of the 1961 Act and learned CIT(A) refused to condone the aforesaid delay in filing of appeal by assessee. While computing the period of aforesaid delay of 3417 days in filing of an appeal by assessee before learned CIT(A) , the period of aforesaid delay was computed by learned CIT(A) from the date of the intimation dated 29.03.2009 issued by AO u/s 143(1) of the 1961 Act. Thus, in nut-shell the appeal of the assessee was dismissed by learned CIT(A) vide appellate orders dated 21.05.2019 on the short ground of limitation itself. Now being aggrieved by the appellate order dated 21.05.2019 passed by learned CIT(A) , the assessee has filed this second appeal with tribunal and it was brought to our notice by learned counsel for the assessee that learned CIT(A) made fundamental jurisdictional error in dismissing appeal of the assessee on the grounds of limitation itself as he erred in holding that impugned order which is assailed before him is the intimation issued by the AO u/s 143(1) of the 1961 Act, dated 29.03.2009 , but in-fact it is the order dated 16.08.2018 passed by AO u/s 154 of the 1961 Act which was assailed by the assessee before learned CIT(A) and the appeal having being filed on 05.09.2018 was filed with learned CIT(A) within statutory time limit of 30 days as is prescribed u/s 249(2) of the 1961 Act . Thus, in the nut-shell it was submitted by learned counsel for the assessee that doors of justice were shut by learned CIT(A) on the short ground of limitation itself . Per Contra, learned DR submitted that the assessee has itself filed rectification application dated 08.01.2018 u/s 154 of the 1961 Act with AO beyond four years from the end of the financial year in which intimation dated 29.03.2009 u/s 143(1) was issued by the AO and hence AO was right in dismissing rectification application u/s 154 of the 1961 Act filed by the assessee and it was prayed that appellate order dated 21.05.2019 passed by learned CIT(A) be upheld and the appeal of the assessee as is filed with the tribunal be dismissed. We have considered rival contentions and perused the material on record. We have observed that jurisdictional error has taken place at the end of learned CIT(A) as he has dismissed the first appeal of the assessee in limine on the short grounds of limitation that the appeal is filed late by assessee before learned CIT(A) late by 3417 days beyond the time prescribed u/s 249(2) of the 1961 Act , thereby erring on the ground as the order which was assailed by assessee before him was an order dated 16.08.2018 passed by AO u/s 154 of the 1961 Act dismissing rectification application dated 08.01.2018 filed by assessee , and not the intimation dated 29.03.2009 issued by the AO u/s 143(1) of the 1961 Act. Be it may be , the jurisdictional error has taken place at the end of learned CIT(A) and the end of justice demands that the appellate order dated 21.05.2019 passed by learned CIT(A) be set aside and all the issues raised by assessee before learned CIT(A) in its first appeal filed on 05.09.2018 before learned CIT(A) stand restored for fresh adjudication of all the said issues by learned CIT(A) in set aside proceedings, as directed by us. Needless to say that learned CIT(A) shall give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law in denovo appellate proceedings, as is directed by us. The evidences filed by the assessee shall be admitted by learned CIT(A) in the interest of justice . We clarify that we have not commented on the merits of the issues in the appeal and all the contentions are kept open and learned CIT(A) will adjudicate the issues in accordance with law. The appeal of the assessee is allowed for statistical purposes in the manner as indicated above. We order accordingly.
In the result appeal filed by assessee in 2007-08 is allowed for statistical purposes in the manner as indicated above.