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Facts
The assessee, Smt. Ponnam Bhavani, filed two appeals before the ITAT challenging the CIT(A)'s dismissal of her appeals due to a delay of 404 and 402 days, respectively. The original orders under Section 201(1) and 201(1A) concerned non-deduction of TDS on immovable property purchase. The delay was attributed to the severe illness of her husband, who managed her tax affairs.
Held
The Tribunal condoned the significant delay, finding the assessee's reasons (husband's prolonged illness and her dependency) sufficient and factually undisputed. It noted the assessee's claim that the property seller had already offered capital gains to tax, potentially invoking the 1st proviso to Section 201(1). Consequently, the matters were remanded to the CIT(A) for adjudication on merits.
Key Issues
Condonation of delay in filing appeals before the CIT(A) due to illness; whether the assessee should be held in default for non-deduction of TDS when the property seller has offered capital gains to tax.
Sections Cited
201(1), 201(1A)
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Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhapatnam
Before: Shri Vijay Pal Rao, Vice-Shri Balakrishnan, S.
Per Vijay Pal Rao, Vice President These two appeals by the assessee are directed against the 2 separate orders of the learned CIT (A)-10, Hyderabad, dated, 27/06/2024 and 11/07/2024 arising from the orders passed u/s 201(1) and 201(1A) of the I.T. Act, 1961 for the A.Ys 2012-13 and 2014-15 respectively.
The assessee has raised the following grounds of appeal:
Page 1 of 8 “1. The order of the learned CIT (A)-10 is contrary to the facts and also the law applicable to the facts of the case.
2. The learned CIT (A) is not justified in refusing to condone the delay of 404 days in filing the appeal. 3. The learned CIT (A) ought to have held that the Assessing Officer is not justified in charging the tax of Rs.1,44,200 u/s 201(1) and interest of Rs.1,21,128 u/s 201(1A) of the Act. 4. Any other grounds may be urged at the time of hearing”.
“1. The order of the learned CIT (A)-10 is contrary to the facts and also the law applicable to the facts of the case. 2. The learned CIT (A) is not justified in refusing to condone the delay of 402 days in filing the appeal. 3. The learned CIT (A) ought to have held that the Assessing Officer is not justified in charging the tax of Rs.8,24,000 u/s 201(1) and interest of Rs.4,86,160 u/s 201(1A) of the Act. 4. Any other grounds may be urged at the time of hearing
At the time of hearing, the learned AR of the assessee has submitted that the learned CIT (A) has dismissed the appeals of the assessee as barred by limitation and declined to condone the delay. Therefore, both the appeals were dismissed in limine and not decided on merits. He has pointed out that there was a delay of 404 days in filing the appeal for the A.Y 2012-13 and 402 days in filing the appeal for the A.Y 2014-15. The assessee has explained the cause of delay which is reproduced by the learned CIT (A) in para 3.2.1. However, the learned CIT (A) has declined to condone the delay and observed that the assessee failed to demonstrate sufficient cause and dismissed the appeal as not Page 2 of 8 maintainable. He has now referred to an affidavit of the assessee dated 4/2/2025 filed before the Tribunal explaining the cause of delay. Thus, the learned AR has submitted that the assessee is a house-wife and uneducated, solely dependent on her husband who used to handle the tax matter. However, the husband of the assessee aged 72 years and was suffering from chronic diabetes. The serious diabetes condition also lead to the heart-disease and consequently undergone the procedure of insertion of stent in one of the complete blocked artery in the year 2016. Due to the ill health of the husband, the assessee was helpless and was busy to take care of her ailing husband and therefore, the appeal could not be filed before the learned CIT (A) within the period of limitation. After the prolonged medical treatment, the health condition of the husband improved from the month of January, 2020 onwards. Thus, the learned AR has submitted that the assessee had a sufficient cause for the delay in filing the appeal before the learned CIT (A). He has also pointed out that the assessee had a good case on merit as the seller of the property, for which the assessee did not deduct the Tax at Source and consequently the impugned order u/s 201(1) and 201(1A) of the I.T. Act, 1961 were passed offered the capital gain to tax in the year of execution of sale deed. Thus, the learned AR has submitted that once the seller of the property offered the income to tax then, as per the 1st proviso to section 201(1), the assessee shall not be deemed to be an assessee in default. Hence, the learned AR has pleaded that the delay in filing the appeal before the learned CIT (A) may be condoned.
On the other hand, the learned DR has raised no serious objection, if the delay in filing the appeal is condoned in view of the reasons explained by the assessee that the husband of the assessee was seriously ill.
We have considered the rival submission as well as relevant material available on record. The learned CIT (A) has recorded the reasons for delay explained by the assessee in para 3.2.1 as under:
“3.2.1 In the appeal papers, the appellant filed the following reasons for delay in filing of appeal: “ I am a house wife and all tax matters are looked after my husband. He is suffering from diabetes and heart problems. Due to his old age and health problems, appeal was not filed in time. I request you to condone the delay and entertain the appeal”.
Thus, it is clear that the assessee has stated the reasons that all the tax matters are looked after by her husband who is suffering from diabetes and heart problem. Further, due to his old age and ill health, the appeal was not filed in time. The assessee has now filed an affidavit to elaborate the reasons which reads as under:
Page 4 of 8 Page 5 of 8 Page 6 of 8
Though the learned CIT (A) was not satisfied with the reasons explained by the assessee however, the reasons explained by the assessee are factually not in dispute, it may be a case that the assessee has not given an elaborate explanation of cause of delay in filing the appeal before the learned CIT (A). We further note that the Assessing Officer has passed the order u/s 201(1) and 201(1A) of the I.T. Act, 1961 in respect of the sale consideration paid by the assessee for purchase of the immovable property without deducting the TDS. The assessee has now stated that the seller of the property has offered the capital gain to tax and therefore, in view of the 1st proviso to section 201 (1) of the I.T. Act, 1961, the assessee may not be held as assessee in default. Accordingly, in the facts and circumstances and the reasons explained by the assessee, we are satisfied that the assessee was having a sufficient cause for not filing the appeals before the learned CIT (A) within the period of limitation hence, the delay of 404/403 days in filing the appeal before the learned CIT (A) is condoned.
Since the appeals of the assessee were dismissed by the learned CIT (A) in limine and no finding has been given on merits therefore, the matters are set aside to the record of the learned CIT (A) for both the A.Ys i.e 2012-13 and 2014-15 respectively for adjudication of the same on merits after giving an appropriate opportunity of hearing to the assessee.
In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the Open Court on 28th April, 2025.