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Facts
The assessee, a transport contractor, failed to deduct TDS under Section 194C on hiring charges, leading the AO to disallow expenses under Section 40(a)(ia). The assessee claimed to have obtained Form 15-I declarations but failed to file them. The CIT(A) dismissed the assessee's appeal ex-parte due to non-appearance, following which the assessee filed an appeal to the ITAT with a delay of 1428 days.
Held
The ITAT condoned the delay in filing the appeal, considering the impact of the COVID-19 pandemic and the assessee's advanced Parkinson's disease. Noting that the CIT(A) had decided the appeal ex-parte without hearing the assessee or considering the merits, the ITAT set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh consideration on merits after providing the assessee an opportunity of being heard.
Key Issues
Whether the significant delay in filing the appeal before the ITAT should be condoned given the COVID-19 lockdown and the assessee's medical condition. Whether the ex-parte order passed by the CIT(A) was justified without considering the merits of the disallowance under Section 40(a)(ia) for non-deduction of TDS.
Sections Cited
194C, 40(a)(ia)
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Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN
Before: SHRI INTURI RAMA RAO & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the Ld.CIT(A)-2, Kochi dated 24/01/2020 in respect of the A.Y. 2007-08.
The brief facts of the case are that the assessee is a transport contractor and during the assessment year, he had paid hiring charges to the truck owners but he has not collected the TDS as per section 194C of the Act and therefore the AO had issued a notice proposing to disallow the expenses u/s. 40(a)(ia) of the Act. The assessee submitted that he has obtained the declaration in form 15-I as per Rule 29D of the Income Tax Rules, 1962 and by mistakenly the said forms were not filed before the authorities. The AO passed the assessment order and disallowed the expenditure u/s. 40(a)(ia) of the Act since the assessee had not deducted the TDS while making the payments. As against the said order, the assessee filed an appeal before the Ld.CIT(A)-2, Kochi and contended that the payments were covered by form 15-I and therefore the disallowance made u/s. 40(a)(ia) is not correct. But unfortunately, the assessee had not appeared before the Ld.CIT(A) when the hearing notice fixing the date of hearing on 20/01/2020 was sent to the assessee and therefore the Ld.CIT(A) had decided the issue on merits and dismissed the appeal ex-parte. Even before the Tribunal, the assessee had filed the present appeal with a delay of 1428 days and the assessee had explained the said delay by filing an application for condoning the said delay and also enclosed the medical certificate issued by the hospital to show that the assessee was prevented from filing the appeal in time.
First we will take up the delay condonation application for consideration and on going through the application and the affidavit filed by the assessee, it shows that the impugned order was uploaded in the portal on 20/02/2020 and the last date for filing the appeal was over on 21/03/2020 but the appeal was filed on 18/01/2023 after a delay of 1428 days. The assessee explained that when the limitation for filing the appeal starts, the covid19 pandemic also spreading and therefore the Government itself imposed a lockdown commencing from 20/03/2020. The assessee further submitted that he was affected with Parkinson’s disease which was in an advanced stage and therefore he was also bedridden quite a long time taking treatment from the hospital Sree Sudheendra Medical Mission, Kochi and therefore the assessee was not able to talk and therefore the appeal could not be filed in time. The assessee also submitted that he is aged about 73 years and he was not able to speak or attend to his personal needs without any help and therefore the delay has been occurred which is beyond his control. The assessee also furnished the medical certificate issued by the hospital in support of his submission.
The Ld.DR appearing for the revenue vehemently contended that the delay is abnormal and prayed to dismiss the same.
We have considered the application filed in support of the delay condonation and also the affidavit and the medical certificate issued by the hospital and from the said details, we understand that the assessee, being an aged person, was physically prevented from filing the appeal in time. Further, the covid19 lockdown was also imposed by the Government and the restrictions were there till 28/02/2022 and therefore as per the suomoto orders passed by the Hon’ble Supreme Court, the said periods should be excluded for calculating the limitation. If we exclude the covid19 period, then the delay is not an abnormal one since the assessee had suffered advanced Parkinson’s disease which would affect him very badly and therefore in order to render substantial justice, we are of the view that the said delay should be condoned. Moreover, the Ld.CIT(A) also not decided the appeal after hearing the assessee and therefore the merits of the issue was not decided by him by considering the supporting documents to be filed by the assessee. In these circumstances, we are allowing the application filed by the assessee to condone the delay in filing the appeal and also set aside the order of the Ld.CIT(A) which was passed ex-parte and remit the same to the file of the Ld.CIT(A) for considering the issue afresh on merits after hearing the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21st February, 2025.