THE GREAT EASTERN SHIPPING CO. LTD ,MUMBAI vs. THE DEPUTY COMMISSIONER OF INCOME TAX, TDS CIRCLE 2(3), MUMBAI

ITA 2772/MUM/2024Status: DisposedITAT Mumbai27 November 2024AY 2013-1425 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeals, adopting a liberal approach as per the principles laid down by the Supreme Court in Collector, Land Acquisition Vs. Mst. Katiji. The Tribunal held that the assessee's explanation for the delay, attributing it to an email being sent to the spam folder, constituted a sufficient cause. Regarding the interest under Section 201(1A), the Tribunal ruled that it is not leviable if the entire tax deductible is deducted by the end of the financial year, even if there was a short deduction in earlier months, provided there are bonafide reasons and the shortfall is made good. The Tribunal found that Section 192(3) allows for adjustment of excess or deficiency, making the interest charge under Section 201(1A) inapplicable for mere short deduction in initial months when the total tax is collected by year-end. Consequently, grounds 1 to 4 were allowed in favour of the assessee. For ground 5, concerning interest under Section 220(2), the Tribunal held that this section applies only when an amount specified in a notice of demand under Section 156 is not paid within the stipulated period. As no such notice of demand was issued for the assessment years in question, the levy of interest under Section 220(2) was deleted, and this ground was also allowed. All eight appeals were allowed.

What were the facts?

The assessee, The Great Eastern Shipping Co. Ltd., filed eight appeals before the Income Tax Appellate Tribunal (ITAT) challenging common orders passed by the Commissioner of Income Tax (Appeals) for Assessment Years 2012-13 to 2019-20. The appeals concerned the levy of interest under Section 201(1A) and Section 220(2) of the Income Tax Act, 1961. The assessee contended that the delay in filing the appeals was due to the CIT(A)'s order being received late, having been sent to the spam folder of the designated employee's email. The revenue did not rebut the assessee's submissions regarding the condonation of delay.

What were the issues?

1. Whether the Tribunal has jurisdiction to entertain the appeals, given the delay in filing, and if so, whether the delay is to be condoned on the grounds of sufficient cause, as per Section 5 of the Limitation Act, 1963, applied liberally. - Assessee's contention: The delay was unintentional and caused by the CIT(A)'s order landing in the spam folder, preventing timely awareness and filing. They rely on the Supreme Court's principle in Collector, Land Acquisition Vs. Mst. Katiji (1987) 167 ITR 471 for a liberal interpretation of 'sufficient cause'. - Revenue's contention: Not recorded. 2. Whether the levy of interest under Section 201(1A) of the Act is sustainable in respect of alleged late deduction of tax at source on salaries paid to floating staff members, considering their residential status determination and the provisions of Section 192(3). - Assessee's contention: Interest under Section 201(1A) is not leviable as the residential status of floating staff deployed in foreign waters could only be determined towards the end of the year, and any shortfall in TDS was adjusted within the financial year as permitted by Section 192(3). They also cite High Court and Tribunal judgments where similar interest levies were deleted. - Revenue's contention: Not recorded. 3. Whether the levy of interest under Section 220(2) of the Act is applicable in the absence of a specific notice of demand under Section 156 of the Act for the relevant assessment years. - Assessee's contention: Section 220(2) is not applicable as no order or notice of demand was issued for the assessment years in question. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 201(1A),Section 220(2),Section 192(3),Section 156,Section 250,Section 5

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “G” BENCH MUMBAI

Before: SHRI SANDEEP GOSAIN & MS. PADMAVATHY S

For Appellant: Shri Jeet Kumar, Adv, Shri Yasmin Dastur
Hearing: 13.11.2024

PER BENCH:

The present appeals have been filed by the assessee challenging the common impugned order 27.06.2024, passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (‘Ld. CIT(A)’), for the A.Ys 2012-13 to 2019-20. The Great Eastern Shipping Co. Ltd, Mumbai

2.

Since all the issues involved in these eight appeals are common and identical, therefore, they have been clubbed, heard t

The order continues below.

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