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Facts
The assessee availed the benefit of the Income Disclosure Scheme-2016 (IDS-16) and paid the tax demanded. However, due to technical glitches and bank holidays, the last installment was processed by the bank on October 4, 2017, instead of the due date of September 30, 2017. The Assessing Officer made an addition of Rs. 46.00 lakhs. The appeal filed by the assessee before the Commissioner (Appeals) was dismissed ex-parte due to communication issues and the assessee's lack of technical knowledge. The current appeal is filed after a delay of 451 days.
Held
The Tribunal condoned the delay of 451 days in filing the appeal, considering the technical reasons and the fact that substantial justice should be preferred. The Tribunal noted that the assessee paid the tax on time, and the delay in processing was due to external factors. Relying on CBDT Circular dated July 12, 2019, the Tribunal directed the Assessing Officer to verify the facts of tax payment and initiate the process for issuing IDS Form-4.
Key Issues
1. Condonation of delay in filing the appeal. 2. Whether the addition of Rs. 46.00 lakhs made by the Assessing Officer is justified, considering the assessee's compliance with the IDS-16 scheme despite technical processing delays.
Sections Cited
Section 254(1), Section 250
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Assessee represented by Shri P M Jagasheth, C.A. Department represented by Shri Mukesh Jain, Sr.DR Appeal instituted on 07/10/2024 Date of hearing 06/01/2025 Date of pronouncement 03/02/2025 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Commissioner of Income tax (Appeals)/ National Faceless Appeal Centre, [CITA)] dated 12 May 2013, for assessment year (AY) 2011-12. Though, the assessee has raised multiple grounds of appeal
, however, three main grounds of appeal i.e. validity of reopening, not allowing adequate and sufficient opportunity by learned Commissioner (Appeals) and on merit addition of 46.00 lakhs on account of cash declared in Income Tax Disclosure Scheme-2016 (IDS-16).
2. Rival submission of the parties has been heard on record perused. The learned authorised representative (A.R.) of the assessee fairly submits that there is delay of 451 days in filing appeal before this Tribunal. The delays not intentional or deliberate. Before explaining the cause of delay in filing appeal belatedly, the appreciation of unique facts of the present appeal is necessary. The Induben Ghanshyambhai Kevadiya Citizen and honest taxpayer. In fact, the assessee availed benefit of IDS-16 and paid the due tax demanded by designated authority/ learned Pr CIT-1, Surat. At the time of vailing benefit of IDS-16, the assessment was pending before Assessing Officer. The assessee was required to pay final installment of tax by 30th September 2017. The last instalment of tax was deposited in bank on 28th September 2017 by way of cheque, however, due to technical glitches, it was processed by bank only on 4th October 2017, due to bank holidays or the local festivals. The certificate was issued by competent officer of bank; in accepting such facts that the assessee paid tax by cheque on 28th September 2017. Such certificate was furnished before the Pr. CIT-1 Surat, to substantiate the fact that assessee has deposited the required tax demand, well in time. The assessee also made a prayer for condonation of delay in payment of tax. However, such request of assessee was not accepted by Pr CIT. Since, the matter was not being resolved due to delay in remittance of due tax, the Assessing Officer made addition of Rs. 46.00 lakhs in the assessment order. The Assessing Officer made addition, despite the fact that assessee has made complete the payment of due tax in the Treasury of Government of India. Aggrieved by the additions in the assessment order the assessee filed appeal before learned Commissioner (Appeals). Appeal was filed on 25.01.2019. The consultant of assessee furnished email address “iiigparivar@yahoo.co” for the purpose of communication of notices. The last notice of hearing under section 250 of the Act was issued on old e-mail ID created by her consultant at the time of filing return of income. Other notice were issued on the e-mail “girish_movalia@yahoo.co” and copy (cc) was sent Induben Ghanshyambhai Kevadiya on e-mail iigparivar@yahoo.co. such fact of issuance of notices at different IDs are mentioned in para-3 of order of learned Commissioner (Appeals). The assessee is not much educated lady and is not well-versed with the Internet and technology so she was unable to made response immediately. Moreover, the assessee was told that she has already made application for availing benefit of IDS-16 and already paid due tax, the matter would have resolved. However, when the assessee contacted his consultant to know the progress of his case, his new consultant checked the ITBA portal and find that appeal of assessee has already been dismissed on 12th May 2023. The assessee enquired about the status of appeal in last week of November 2024 and filed this appeal immediately before this tribunal. The delay in filing appeal is neither intentional or deliberate. The assessee is being facing difficulties and harassment despite the fact that all due tax has already been paid in a scheme declared by Central Government and entire payment of tax has already been paid, yet the assessee has to run from pillar to post for seeking justice. The learned A.R. of the assessee submits that assessee has a good case on merit and is likely to succeed if delay is considered and the appeal is considered on merit.
On merit of the case the learned A.R. of the assessee submits that Central Board of Direct Taxes (CBDT) vide its Circular dated 12th July 2019, considered the difficulties faced by taxpayer regarding the similar difficulty faced by assessee and directed that under IDS-16 where the declarant (assessee) had made complete payment of the determined liability in accordance with prescribed installment schedule but they did not upload IDS Form-3 (the intimation of payment toward the installment) and hence IDS Form-4 has not Induben Ghanshyambhai Kevadiya Board is of the view that Form-3 is only a declaration of payments made by the declarant and therefore, where the system has matched 100% payment made by the declarant within prescribed time framed and the same is being shown as paid as per the system, the concerned Pr.CITs may make a reference to Pr.DGIT (System) to grant permission/facility to issue IDS Form-4 in these cases. Further, the CBDT also issued clarification with regard to third instalment payable by 30th September, 2017 and due to bank holidays, close National holiday and payment was effected or completed on next working day of the banks would be treated as on time payment of the statutory liability towards third instalment. It was noted that 01st October, 2017 and 2nd October, 2017 were close bank holidays, therefore regular banking transaction could take place only on 03rd October, 2017 after 30th September, 2017. It was directed by the Board that payments effected by declarants on 3rd October, 2017 shall be deemed to have been paid by due date for third instalment i.e. 30th September, 2017. It was more particularly clarify that deemed extended date of third instalment which were credited by banks till 05th October, 2017 shall be deemed to have been paid by 30th September, 2017. The ld. AR of the assessee reiterated that in fact the assessee made payment by way of cheque on 28/09/2017 which was credited to the government treasury on 04/10/2017. Thus, the assessee has fulfilled all the conditions of IDS-16 and eligible for issuance of Form-4.
The ld. A.R. of the assessee submits that he has placed on record, copy of certificate issued by this Banker, copy of application filed before Principal Commissioner of Income tax-1, Surat and also furnished his bank statement Induben Ghanshyambhai Kevadiya reflecting the payment of such amount. The ld A.R. of the assessee submits that now he has a very limited prayer that the matter be restored back to the file of Assessing Officer with a specific direction to accept the payment made by assessee against her tax liability in IDS-16 on time. The Assessing Officer may be directed to verify the fact and complete the formality and furnish his report to the office Pr.CIT-1, Surat for issuing final certificate of IDS-16 about settlement of his case and to take all other necessary steps which may require to give relief to the assessee.
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue after going through the contents of application of condonation of delay would submit that it was the duty of assessee to check the ITBA portal on regular basis to know the status of pendency of her appeal. However, in alternative submission the ld. Sr. DR for the revenue submits that considering the peculiar facts of the case that assessee has allegedly made the payment of entire tax liability, this Bench may take appropriate view for condoning the delay in accordance with law. However, on merit of the case the ld. Sr. DR for the revenue submits that the matter may be restored back to the file of Assessing Officer for verification of fact and giving order effect.
We have considered the rival contention of both the parties and have gone through the orders of lower authorities carefully. First, we are considering the plea of condonation of delay in filing appeal before Tribunal. We find that main contention of ld AR for the assessee in seeking the condonation of delay is that assessee has availed benefit of IDS-16 and has made payment of entire tax liability well in time and due to technical reasons Form-3 & Form-4 could not Induben Ghanshyambhai Kevadiya be generated. The assessee was assured that once she has paid entire tax liability the matter would be resolved. We noted that due to non-issuance of Form-3 & 4, the Assessing Officer made addition of Rs. 46.00 lakhs, declared for assessment year 2011-12. The assessee filed application before Pr. CIT-1 Surat for condoning delay in payment of last installment of tax on 26.11.2018, copy of which is also filed on record. It appears that such delay was not condoned by ld Pr CIT-1, Surat. The assessee also filed appeal before learned Commissioner (Appeals). However, the appeal of the assessee was dismissed in ex-parte order for the want of submissions. We find that in the statement of facts the assessee has clearly mentioned such facts regarding the technical reasons of delay in process of last instalment of tax. Such facts were not considered by ld Commissioner (Appeals). The ld AR of the assessee while making his submissions submitted that consultant of assessee furnished email address “iiigparivar@yahoo.co” for the purpose of communication of notices. Notice of hearing by learned Commissioner (Appeals) under section 250 was issued on old e-mail ID created by her consultant at the time of filing return of income. Other notice were issued on the e-mail “girish_movalia@yahoo.co” and copy (cc) was sent on e-mail iigparivar@yahoo.co. We find that issuance of notice at different e-mail addresses are mentioned in para-3 of impugned. On carful perusal of para-3 of impugned order, we find that first three notices were issued during Covid-19 pandemic period. And final notice dated 27.04.2023 for making compliance on or before was issued through e-mail igkvadiya@gmail.com . Thus, the last notice was not issued at the e-mail provided on Form-35 (Appeal Form). Therefore, considering the overall facts Induben Ghanshyambhai Kevadiya (service) of order passed by ld Commissioner (Appeals) is also doubtful, if it was communicated or not. Though, the assessee has also accepted the facts that she is not much educated lady and is not well-versed with the Internet and technology so she was unable to made response immediately. On considering the aforesaid facts we find that there is no intentional or deliberate delay in filing appeal. Even otherwise, the assessee is not liable to get any benefit in filing the appeal belatedly. It is settled position in law that when technical considerations and cause of substantial justice are pitted against each other, the cause of substantial justice may be preferred. The length of delay is not material rather, the reasons behind such delay has to be considered. Thus, considering overall facts and the reasons explained before us, we condoned the delay of 451 days in filing of appeal. Now adverting to the merits of the case.
On merit, we find that the ld AR for the assessee made very limited prayer that in pursuance of scheme of IDS-16, the assessee has paid tax liability determined by ld Pr CIT-1, Surat, in time that before 30th September 2017, but due to bank holidays it could be remitted to the Government Account on 4th October 2017. We find that CBDT vide its Circular dated 12th July 2019, considered the difficulties faced by taxpayer regarding the similar difficulty faced by assessee and directed that under IDS-16 where the declarant had made complete payment of the determined liability in accordance with prescribed installment schedule but they did not upload IDS Form-3 (the intimation of payment toward the installment) and hence IDS Form-4 has not been issued in these cases, in such regard, Board is of the view that Form-3 is Induben Ghanshyambhai Kevadiya 100% payment made by the declarant within prescribed time framed and the same is being shown as paid as per the system, the concerned Pr.CITs may make a reference to Pr.DGIT (System) to grant permission/facility to issue IDS Form-4 in these cases. We further, find that the CBDT also issued clarification with regard to third instalment payable by 30th September, 2017 and directed that due to bank holidays, close National holiday and payment was effected or completed on next working day of the banks be treated as on time payment of the statutory liability towards third instalment. It was noted that 01st October, 2017 and 2nd October, 2017 were close bank holidays, therefore regular banking transaction could take place only on 03rd October, 2017 after 30th September, 2017. It was directed by the Board that payments effected by declarants on 3rd October, 2017 shall be deemed to have been paid by due date for third instalment i.e. 30th September, 2017. It was more particularly clarify that deemed extended date of third instalment which were credited by banks till 05th October, 2017 shall be deemed to have been paid by 30th September, 2017. Thus, in view of the directions of CBDT, we find that the case of assessee squarely falls within the time limit period allowed in it aforesaid circular. Such plea was already raised by assessee in her statement of facts in appeal before ld Commissioner (Appeals), hence, we direct the Assessing Officer to verify the facts about the payment of final tax liability determined by ld Pr CIT-1, Surat in term of IDS-16. The Assessing Officer is also directed that after verification of payment of tax liability, initiate information of payments made by the assessee and on matching 100% Induben Ghanshyambhai Kevadiya Pr. CIT for making a reference to Pr. DGIT (System) to grant permission/facility to issue IDS Form-4 in these cases. Such directions are issued in term of CBDT instruction in Circular dated Circular dated 12th July 2019. In the result, the ground No.2 of the appeal is allowed for statistical purpose.
Considering the facts, that we have allowed the appeal for statistical purpose, therefore, adjudication on other grounds of appeal
have become academic.
9. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 03/02/2025.