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Facts
The assessee, Bank of India, filed five appeals against the order of the NFAC for assessment years 2009-10 & 2010-11. These appeals arose from orders passed under sections 201(1), 201(1A), and 271C of the Income Tax Act. The core issue revolved around the alleged short deduction or non-deduction of TDS on interest payments.
Held
The Tribunal noted that the assessee, a bank, faced challenges due to the transferable nature of its branch managers and the lack of a dedicated tax consultant, leading to delays in filing appeals at both the CIT(A) and Tribunal levels. The Tribunal, considering the principles of substantial justice and citing various judicial precedents, condoned the delays.
Key Issues
Whether the delay in filing the appeals before the CIT(A) and the Tribunal is sufficiently explained and should be condoned, and whether the demands raised for short/non-deduction of TDS are sustainable in light of the facts presented.
Sections Cited
201(1), 201(1A), 271C, 10(23C)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA Nos. 639 to 643/JP/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA Nos. 639 to 643/JP/2024 fu/kZkj.k o"kZ@Assessment Years : 2009-10 & 2010-11 cuke Bank of India, ITO Vs. Jaipur TDS-1, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: JPRB 02554 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Shailesh Mantri, CA jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary, Addl. CIT lquokbZ dh rkjh[k@ Date of Hearing : 02/07/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 24/07/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
These bunch of five appeals filed by assessee are arising out of the order of the National Faceless Appeal Centre, Delhi dated 17/08/2022 & 26/10/2022 [here in after ‘NFAC’) ] for assessment years 2009-10 & 2010- 11 which in turn arise from the order dated 29.03.2016, 29.03.2017, 11.10.2017 passed under section 201(1) & 201(1A) & 271C of the Income Tax Act [ here in after as Act ] , by ACIT (TDS), Jaipur & ITO, TDS, Circle- 01, Jaipur. interrelated on grounds and on facts. Therefore, these appeals were heard together with the agreement of both the parties and are being disposed off by this common order in all these appeals.
3. In all these appeals, grounds raised by the assessee are as under:- -JP-2024 for A.Y 2009-10
“1.Ground No. 1 That the Ld. CIT(A) has erred in facts and in law considering the assessee as assessee in default u/s 201(1) and confirming the demand of Rs. 800671/- u/s 201(1A). 2. Ground No. 2 That the appellant craves to add, amend, and alter the grounds before or at the time of appellate hearing.”
-JP-2024 for A.Y 2010-11
“1.Ground No. 1 That the Ld. CIT(A) has erred in facts and in law considering the assessee as assessee in default u/s 201(1) and confirming the demand of Rs. 1,19,616/- 201(1A). 2. Ground No. 2 That the appellant craves to add, amend, and alter the grounds before or at the time of appellate hearing.”
-JP-2024 for A.Y 2010-11
“1.Ground No. 1 That the Ld. CIT(A)-NFAC, has erred in facts and in law in confirming the Penalty of Rs. 101046/- u/s 271C. 2. Ground No. 2 That the appellant craves to add, amend, and alter the grounds before or at the time of appellate hearing.”
“1.Ground No. 1 That the Ld. CIT(A) has erred in facts and in law considering the assessee as assessee in default u/s 201(1) and confirming the demand of Rs. 191988/- u/s 201(1A). 2. Ground No. 2 That the appellant craves to add, amend, and alter the grounds before or at the time of appellate hearing.”
-JP-2024 for A.Y 2010-11
1.That the Penalty u/s 271C for Rs. 65009/- imposed by ld. AO and confirmed by Ld. CIT(A)-NFAC are bad in law. 2. That the appellant craves to add, amend, and alter the grounds before or at the time of appellate hearing.”
First we take up the appeal in filed by the 4. assessee for A.Y 2009-10. Brief facts as emerges from the order of lower authorities is that a demand u/s 201(1)/201(1A) of the Act was raised in respect of alleged non-deduction/short deduction of TDS on the interest payment made to each of the parties, the relevant demand raised on account of short deduction/non deduction of tax in each of the parties is tabulated herein below:
Aggrieved from the order of Assessing Officer, the assessee preferred an appeal before the ld. CIT(A)/NFAC. The ld. CIT(A)/NFAC has disposed off the appeal confirming the order of the Assessing Officer. So far as the merits of the case are concerned. The ld. CIT(A)/NFAC has also not condoned the delay in filing the appeal before him which was delayed by 582 days. The ld. AR of the assessee drawn our attention two reasons advanced before ld. CIT(A)/NFAC wherein the assessee stated that ;
“The assessee is a govt banking company and due to transferable job of branch managers, no proper tax consultant, we have not filed the appeal in time. But now as we know about the demand through demand collection letters, we would like to file an appeal before your honour. As we know that the appeal becomes quite delay but the demand raised by the Ld AO mainly on interest paid to govt
5 to 643/JP/2024 Bank of India vs. ITO university, Senior citizens etc are not according to the law of the case, all the deductees have already paid the tax on such income and further deduction of tax goes to double taxation and interest thereon also very harsh on us as well as on deductees also, hence we would like to pray before your honour to accept our appeal and condone the delay and oblige.”
The ld. CIT(A) did not consider this reason as sufficient to condonation the delay. Therefore, the appeal was dismissed by the ld. CIT(A).
At the outset of hearing, the bench also notes that even the present appeal filed before this bench is also delayed by 569 days and in support of this delay. The ld. AR of the assessee relied upon the content of the affidavit filed by Mr. Rajesh Sharma, Branch Manager of Bank of India wherein the reasons advanced for this condonation are as under:-
“Affidavit of Mr. Rajesh Sharma, Branch Manager of Bank of India, 202 Govardhan Colony opposite Sanjivani Hospital, New Sanganer Road Jaipur 302019, Rajasthan, India.
The Deponent Mr. Rajesh Sharma has well conversant with the facts deposed to below:
That the deponent received CIT(A) order on 17/08/2022. That the time for filing of appeal before the tribunal was expired on 16/10/2022.
That the deponent filed appeal on 07/05/2024.
That in this way there is a delay of 569 days.
6 to 643/JP/2024 Bank of India vs. ITO 4. That delay in filing the appeal is because of that the CIT(A) proceedings has been taken over on NFAC, and the all notices issued by the NFAC was on email id of the bank system, due to technical error the system of bank has marked all these mails as SPAM mail and therefore the same will never came in the knowledge. The bank received the demand recovery notice from the ITO, then they contacted to ITO-TDS, The ITO TDS updated the bank officer that the order are passed. Then the Branch head submitted the request for providing the true certified copy of these order. The ITO TDS has provided the certified copies of these order on 06/04/2024. Thereafter the appeal documents had been prepared and the appeal has been submitted before your goodself within 60 days of the receipts of the true certified copy of the orders. It is therefore requested kindly condone the said delay and accept the appeal & oblige.”
To support the contention of the delay in bringing this appeal before this bench, the ld. AR of the assessee relied upon the Co-ordinate Bench decision in the case of Tirupati Prasad Sahu vs. ITO, Rayagada in dated 24/06/2024 and decision of Natthi Singh vs. ITO in ITA No. 117/JP/2023 dated 03/05/2023.
Per contra, ld. DR heavily opposed the reason advanced by the assessee in bringing the present appeal with a delay and stated the same is not explained by sufficient cause. The ld. DR also submitted that the assessee is in habit of non-compliance and even the appeal was not filed in time before the ld. CIT(A) and the same was filed with delay of 582 days.
Considering that habituated behavior of tax payer for filing the appeal with delay at both stages, the present appeal is also required to be dismissed. council, but reasons advanced by them are not sufficient to condone the delay and therefore, the appeal should not be admitted and be dismissed with costs.
We have heard the rival contentions and perused the material placed on record. The bench noted that the content of affidavit filed by the Branch Manager, wherein he stated that based on criteria decided for e-mail id bank as a whole, considering the frequent e-mail from the same id, these all notices of ld. CIT(A) fixing the date of hearing and that of the order went into spam mail. Therefore, the same has left attention to incumbent at that time. Even the Branch Head as per request submitted by him on 06.04.2024, he received the certified copy of the orders passed and therefore, considering that aspect of the matter, there has been delay in filling the present appeal. To drive to the contentions so raised the ld. AR of the assessee relied upon the decision of the co-ordinate bench in the case of Natthi Singh vs. ITO (Supra). The relevant finding of the bench is relied upon is reproduced herein below :
8. We have heard the rival contentions and perused the material placed on record. The bench noted that the assessment proceeding were not attended by the ld. AR of the assessee and the appeal of the assessee was presented by the 8 to 643/JP/2024 Bank of India vs. ITO same AR of the assessee for which notices were went in the SPAM folder of the ld. AR of the assessee’s email account and therefore, the assessee did not get a fair chance to represent the merits of his case before the ld. CIT(A). Thus, it is evident that the assessee is represented / assisted by an expert in the field and therefore, the assessee may have acted upon the advise of that expert in the field and was dependent on the advise of his counsel. Not being an expert he had engaged a professional who was supposed to take care of the statutory requirements. The delay if any was caused due to the inabilities being faced by his tax consultant. The appellant was not going to gain any benefit because of the delayed filling and his conduct was not contumacious. The bench noted that the appellant was serious and interested in prosecuting the appeal in as much as he had already engaged tax consultant and also made the payment of the filling of fees of appeal before the first appellate authority. We also find that while filling appeal before the ld. CIT(A) the ld. AR of the assessee also filed a condonation petition before the ld. CIT(A) but the ld. CIT(A) has summarily dismissed the appeal. The ld. AR of the assessee appearing in this appeal has relied upon the various judicial precedent where in the courts has considered ignored technicality of the reasons and has considered the delay. It is settled principles as laid down by the apex court as well as other courts on the facts of the present case, we find that the assessee has explained sufficient cause of delay by filling a detailed affidavit and also reasons for not appearing before the ld. CIT(A). Therefore, in the facts and circumstances of the case, we remand back the matter to the record of the ld. CIT(A) for deciding the appeal afresh on merits after giving an opportunity of being heard to the assessee. The assessee is also directed to co- operate with the ld. CIT(A) in deciding the appeal on merits and without sufficient reason, not to take further adjournments. Before parting, we may make It clear that our decision to restore the matter back to the file of the ld. CIT(A) shall in no way be construed as having an reflection or expression on merits of the dispute, which shall be adjudicated by the learned Commissioner of Income Tax, (Appeals) independently in accordance with the law.
On being consistent to the finding so recorded in the case law relied upon having similar set of facts the delay in bring the present appeal is condoned.
So far as the delay before, the ld. CIT(A) is concerned we note that the assessee is a Government Banking Company and due to transferable receipt of demand through demand collection letters, the appeal was filed which was delayed and prayed to accept appeal and condone the delay.
The ld. CIT(A) has not considered the prayer of the assessee and taken a view that the request of the assessee for condonation of delay based on those averments is liable to rejected and the appeal was dismissed as it was filed beyond the prescribed time limit. The bench noted that recently Hon’ble apex court for condonation of delay in bring appeal laid down certain criteria vide para 26 of the decision in the case of Pathapati Subba Reddy (Died) By L.Rs & ORS.Vs. The Special Deputy Collector (LA) in special leave petition (Civil) no. 31248 of 2018. The apex court observed that:
On a harmonious consideration of the provisions of the law, as aforesaid, and the law laid down by this Court, it is evident that: (i) Law of limitation is based upon public policy that there should be an end to litigation by forfeiting the right to remedy rather than the right itself; (ii) A right or the remedy that has not been exercised or availed of for a long time must come to an end or cease to exist after a fixed period of time; (iii) The provisions of the Limitation Act have to be construed differently, such as Section 3 has to be construed in a strict sense whereas Section 5 has to be construed liberally; (iv) In order to advance substantial justice, though liberal approach, justice- oriented approach or cause of substantial justice may be kept in mind but the same cannot be used to defeat the substantial law of limitation contained in Section 3 of the Limitation Act;
10 to 643/JP/2024 Bank of India vs. ITO (v) Courts are empowered to exercise discretion to condone the delay if sufficient cause had been explained, but that exercise of power is discretionary in nature and may not be exercised even if sufficient cause is established for various factors such as, where there is inordinate delay, negligence and want of due diligence; (vi) Merely some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal; (vii) Merits of the case are not required to be considered in condoning the delay; and (viii) Delay condonation application has to be decided on the parameters laid down for condoning the delay and condoning the delay for the reason that the conditions have been imposed, tantamounts to disregarding the statutory provision.”
Here in this case as it is noted that issue as pointed out that the branch managers are changing. The incumbent, on being aware of existing demand seriously pursued the same and filed the appeal, though delayed.
Thus, here the case is of substantial justice, though liberal approach, justice-oriented approach or cause of substantial justice may be kept in mind. Because the assessee is represented by the branch incumbent.
Considering criteria laid down by the Hon’ble Apex Court herein above in this case, the bench noted that both appeals presented before us and that of disputed before ld. CIT(A) were filed with inordinate delay. But as the ld. AR of the assessee submitted that generally, Branch Manager do not have any taxation issues to be dealt with at branch level as such and there is a and also considering the fact that job of bank Branch Manager being transferable job and Branch Manager being not technical equipped such type of skill and in the interest of substantial justice when out of more than five thousand cases in a branch, only a few cases the technical lapses have been observed and that too are curable in nature. Therefore, in the interest of substantial justice, the present appeal is admitted as the order of ld. CIT(A) went into spam mail and as regards the delay before ld. CIT(A) is also condoned considering the explanation furnished by the assessee in all these bunch of appeals.
In the appeal of the assessee has not been considered on merits and the same was dismissed confirming the view of the ld. AO as the appeal was filed before ld. CIT(A) belatedly.
Before us, the ld. AR of the assessee, so far as demand of Rs. 8,00,671/- is concerned invited our attention to a table (extracted herein below and referred as Table -A ) where the default of TDS is computed;
Table-A As it is evident from Table-A above that in the case of TDS default in the case of deductee named Shree Jagat Guru, the ld. AR of the assessee placed on record at paper book page No. 6 that the assessee for which the default is considered is University and income of that institution is exempted from tax as per provision of section 10(23C) of the Act. Therefore, there cannot be any default of non-deduction as income of that institution is not taxable in respect of default mentioned. For Serial Nos. 2 & 3, 15G was placed on record though the income paid by the branch exceeds the maximum amount not chargeable to tax, deduction of TDS left by the software and therefore, there is reason for non-deduction of tax. The ld. AR argued that at least benefit of default to be considered where it does of the assessee also submitted at bar that if given a chance he will submit that there is no revenue loss by filing the form no. 26A before ld. AO, if the matter is restored to his file of the ld. AO. As regards default listed Sr. Nos.
4, 5, 6 & 7, the ld. AR of the assessee raised similar arguments and submitted that considering the peculiar aspect of the matter if the assessee given a chance to prove before the ld. ITO, TDS that as such there is no default or loss to the revenue by filing the form 26A so as to justify that the assessee is not in default.
Per contra, ld. DR relied upon the order of lower authorities and submitted that the assessee is in habit of not complied to the law and as default in the short deduction/non-deduction has observed by the AO and prayed that the order of ld. AO be sustained. As regards the contention of the assessee that the form no. 26A be filed by the assessee at remand in the year under consideration, the ld. DR stated that the said form is inserted w.e.f. 2012 and that form cannot be applied to give the relief to the assessee. on record. The bench noted that in all the 7 cases cited in table-A in 4 cases, the TDS has been deducted either at the rate prescribed or at less rates and TDS was not deducted at the prescribed rate in three cases. The ld. AR of the assessee submitted that considering the factual aspect that in two cases the parties have submitted form 15G/H and therefore the default if any to be considered to the extent of the maximum amount not chargeable to tax and that of the interest paid because at the time when submitted in initial month of April. The Branch Manager has no idea what would be interest at the yearend, that is why in two cases TDS not deducted by software. The third case being the interest paid to the university whose income is not chargeable to tax. As regards the rest of the four cases the TDS has already been deducted so the assessee, if given a chance will be able to prove by filling the Form no. 26A before the ld. ITO, TDS. As regards the applicability of the form no. 26A to the year under consideration since this form no. 26A is derived in rules so as to provide curable remedy to the assessee the same can be considered for the year under consideration and the assessee be given a chance to prove the deductibility or otherwise on the said defaults. Needless to say the justice.
In terms of these observations, the appeal of the assessee in ITA no.
639/JP/2024 is allowed for statistical purposes.
The facts of the case in 642 & 643/JP/2024 are similar to the facts of the case in ITA No. 639/JP/2024 and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in these appeal No. 640, 642 & 643/JP/2024 are equally similar on set of facts and grounds.
Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in for the Assessment Year 2009-10 shall apply mutatis mutandis in the case of Bank of India in ITA Nos. 640, 642 & 643/JP/2024.
In terms of these observations, the appeal of the assessee in ITA Nos. 640, 642 & 643/JP/2024 are allowed for statistical purposes.
In the assessee has challenged the levy of penalty u/s 271C of the Act. Since we have in quantum proceeding to set aside the order of ld. AO for re-adjudication and therefore, present appeal proceeding in set aside may decide the issue in accordance with law.
In terms of these observations, the appeal of the assessee in ITA no.
641/JP/2024 is allowed for statistical purposes.
Based on these observations, all these appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 24/07/2024.
Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 24/07/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Bank of India, Jaipur izR;FkhZ@ The Respondent- ITO, TDS-1, Jaipur 2. vk;dj vk;qDr@ The ld CIT 3. 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZ QkbZy@ Guard File (ITA Nos. 639 to 643/JP/2024) 6. vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत