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Facts
The assessee filed an appeal before the CIT(A) with a delay of 861 days, citing reasons such as COVID-19 and technical issues with the e-filing portal. The CIT(A) rejected the appeal due to the delay. The ITAT, however, found sufficient cause for condoning the delay.
Held
The Tribunal held that there was a sufficient cause for condoning the delay in filing the appeal, referencing the Supreme Court's decision in Collector Land Acquisition Vs. Mst. Katiji & Ors. The appeal was allowed for statistical purposes, and the issue regarding PF/ESI payment was remitted to the CIT(A) for verification.
Key Issues
Whether the delay of 861 days in filing the appeal before the CIT(A) should be condoned, and whether the disallowance of Provident Fund and ESI payments made after the due date but before the filing of the return of income is justified.
Sections Cited
Sec 36(1)(va), Sec 43B
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Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SANDEEP SINGH KARHAIL
ORDER
PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
This is an appeal filed by the assessee against the order passed by the Addl./JCIT (A)-9, Mumbai order dated 31.10.2023, DIN & Order No. ITBA/APL/S/250/2023-24/1057553824(1) for A.Y. 2017-18 on the following grounds of appeal:
S. No Grounds of Appeal Tax effect The Ld. CIT(A) erred in rejecting the petition filed by the appellant by seeking condonation for the delay of 861 days in filing the appeal before Technical 1. him, without considering the ground reasons for delay, as were submitted through an affidavit, dt. 26.08.2021 The Ld. CIT(A) ought to have admitted and heard the appeal on the basis of merits, without dismissing the appeal by Technical 2. condoning that the delay in filing ground the appeal on the reasons beyond the control of the appellant and with a reasonable cause. The Ld. CIT(A) ought to have fairly appreciated the fact that the delay in filing of appeal is because the order has been misplaced by the management and could only be Technical 3. traced on 21.03.2020 and the ground further delay in filing is due to COVID-19 situation which is a reasonable cause for delay in filing of appeal. The Ld. CIT(A) has erred in rejecting the appeal on the technical reason of delay in filing Technical 4. which amounts to denial of justice ground to an appellant on the technical and curable delay in seeking justice. The Ld. CIT(A) ought not to have denied the justice to the appellant Technical 5. by rejecting the appeal on the ground reason of delayed submission and ought to have condoned the delay. The Ld. CIT(A) ought to have applied the principles of natural Technical 6. justice to an aggrieved appellant ground by condoning the delay in filing the appeal. The Ld. CIT(A) erred in not Technical 7. considering that the intimation ground passed u/s 143(1) of the IT Act,
Page 3 of 1961 by the Ld. CPC, Bangalore dt. 30.03.2019 as erroneous both on facts and in law to the extent the order is prejudicial to the interests of the appellant. The Ld. CIT(A) ought to have appreciated that the Ld. CPC, Bangalore erred in making an addition by way of disallowance Technical 8. of Rs. 15,67,305/- towards ground Provident fund payment and ESI fund payment without considering the facts of the case. The Ld. CTT(A) ought to have appreciated that the Ld. CPC, Bangalore erred in not appreciating the fact that all the Technical 9. payments in relation to the ground Provident fund and ESI fund were made within the time limits prescribed in the Act. The Ld. CIT(A) erred in not fairly appreciating the fact that the Ld. CPC, Bangalore erred in making Technical 10. the additions without considering ground Sec 36(1)(va) r.w.s 43B of the Act, that expenditure is allowable if paid before filing return of income. The Ld. CIT(A) erred in not fairly appreciating the legal position considering that the Ld. CPC, Bangalore ought to have Technical 11. considered the fact that all the ground payments of Provident fund and ESI fund of employees and employer share are paid before filing of return of income. Appellant may, add or alter or amend or modify or substitute or delete and/or rescind all or any of General 12. the grounds of appeal at any time ground before or at the time of hearing of the appeal.
2. The brief facts of the case are that the assessee filed the return of income on 25.11.2017 declaring income of Rs.2,22,27,010/-. Later the return of income was processed by the CPC, Bangalore and issued the intimation u/s. 143(1) of the Act dated 30.03.2019 and determined the total income of the assessee at Rs.2,37,94,310/- after disallowing Rs.15,67,305/- towards the Provident Fund and ESI on the reason that these expenditure is not allowable u/s. 36(1)(va) of the act.
3. We note it from the order of CIT(A) that the CIT(A) has not condoned the delay of 861 days for which the assessee has submitted the reasons which is as under: “I, Mallu Reddy Subramanyam, director of M/s Knowledgehut Solutions Private Limited hereby state that, I am acquainted with the facts of the case in respect of appeal which has been filed with the CIT (appeals), for Assessment Year 2017-18, and I state that: The return of income was fled on 25.11.2019. Subsequently, the return was processed and intimation passed u/s 143(1) dt: 30.03.2019in respect of the Assessment Year 2017-18. The appeal on the order u/s 143(1) could not be filed in time as due to COVID-19 situation and same has not brought to the notice of me and could be filed on 04.09.2021 with the delay of 861 days as the appeal was due for fling on 28.04.2019 and instead of that the same is being fled on 04.09.2021. And, we could not able to file the appeal as the e-fling portal could not allow to upload the same due to technical issues of Income tax server. The delay in fling of the appeal may please be condoned and as the delay in fling the appeal is for good and sufficient reasons. In view of the above reasons, the delay may please be condoned and the appeal may please be considered as due to circumstances which were beyond the control of the Assessee.”
Page 5 of After going through the reasons it is observed that the assessee has sufficient reason for not filing the appeal within the due date to which the CIT(A) ought to have been accepted. In our opinion there is a sufficient cause for condoning the delay as observed by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471. We condone the delay in filing the appeal before CIT(A).
The Ld.AR of the assessee submitted that there was a delay for payment of PF/ESI because of the gazetted holiday/closure of the bank and the assessee was unable to pay the amount on the particular day which falls due date as per the respective Act and subsequently it was immediately paid by the assessee. Therefore the Ld.AR of the assessee requested that the issue should go back to the CIT(A) for verification.
The Ld.DR submitted that the Hon’ble Supreme Court of India has settled this issue in the case of Checkmate Services Pvt. Ltd. reported in (2022) 143 taxmann.com 178 (SC) relied by the revenue authorities.
6. Considering the rival submissions, we note that the Ld.AR of the assessee submitted that the payment was got delayed because of the holiday/closure of the bank. If the amount is remitted in the bank immediately on the next working day of the holiday, the payment should be allowed as within due date. We remit the issue back to the CIT(A) for verification and fresh decision as per
Page 6 of law. The assessee is directed to file necessary documents for substantiating its case.
In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on the 05th day of March, 2024, through virtual hearing.