BANK OF INDIA,JAIPUR vs. ITO TDS-1, JAIPUR, JAIPUR

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.

2 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO 2. Since the issues involved in all these appeals are almost identical or

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.

ITA No. 639-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.”

ITA No. 640-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.”

ITA No. 641-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.”

3 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO ITA No. 642-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. 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.”

ITA No. 643-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 ITA No. 639/JP/2024 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:

4 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO Table-A

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 ITA Nos. 639 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.”

condonation the delay. Therefore, the appeal was dismissed by the ld.

CIT(A).

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:

6 ITA Nos. 639 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.”

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 ITA No.

184/CTK/2024 dated 24/06/2024 and decision of Natthi Singh vs. ITO in

ITA No. 117/JP/2023 dated 03/05/2023.

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.

7 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO The ld. DR also submitted that branch is seeking consultation of the tax

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.

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 ITA Nos. 639 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.

the assessee is a Government Banking Company and due to transferable

9 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO job of branch managers, no proper tax consultant appointed but upon

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:

10 ITA Nos. 639 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

11 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO system in Government organization to appoint the consultant, requires time

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.

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.

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

12 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO

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

13 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO exceed the limit till the maximum amount not chargeable to tax. The ld. AR

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.

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.

14 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO 15. We have heard the rival contentions and perused the material placed

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

15 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO assessee be given opportunity of hearing by following principles of natural

justice.

In terms of these observations, the appeal of the assessee in ITA no.

639/JP/2024 is allowed for statistical purposes.

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 ITA No. 639/JP/2024 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.

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

16 ITA Nos. 639 to 643/JP/2024 Bank of India vs. ITO become infructuous at this stage and ld. AO after completing the

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