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Facts
The assessee company engaged in manufacturing copper products faced a demand due to alleged short deduction of TDS under Section 194Q of the Income Tax Act. The AO and CIT(A) confirmed the demand. The assessee's appeal before the NFAC was dismissed for being delayed by 164 days.
Held
The Tribunal held that tax authorities should be considerate in condoning delays, especially when based on non-service of notices, which is verifiable from records. The NFAC's refusal to condone the delay without substantial rebuttal was unjustified.
Key Issues
Whether the NFAC was justified in refusing to condone the delay in filing the appeal and whether the explanation for the delay was reasonable.
Sections Cited
194Q, 200A
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Income Tax Appellate Tribunal, DELHI BENCHES : B : NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI ANUBHAV SHARMA
(Appellant) (Respondent) Assessee by : Shri Ravi Pratap Mall, Advocate & Shri Anish Raj, Advocate Revenue by : Shri Rajesh Kumar Dhanesta, Sr.DR Date of Hearing : 13.11.2025 Date of Pronouncement : 13.11.2025 ORDER
PER ANUBHAV SHARMA, JM:
This is an appeal preferred by the Assessee against the order dated 26.03.2025 of the Commissioner of Income-tax (Appeals), NFAC, Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in appeal No.NFAC/2023-24/10420434 arising out of the appeal before it against the order dated 12.06.2024 passed u/s 200A of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the CPC, TDS (hereinafter referred to as the Ld. AO).
During the year under reference, the assesse company is engaged in business of manufacturing of copper products. As for the year under reference, the CPC has determined outstanding demand amounting to Rs 1,43,74,569 including interest on short deduction of Rs.11,74,909 for Q2 & Q3 on account of short deduction of TDS. The CPC has alleged that the assesse company has short deducted TDS under section 194Q of the Income Tax Act. 1961. It is submitted that the assesse company has deducted TDS at the rate of 0.1 percent under section 194Q of the Act. However, it was alleged that amount of TDS should be deducted at the rate of 5 percent instead of 0.1 percent as the PAN of the seller was inoperative. Consequently, the same resulted in short deduction. Being aggrieved by the order passed by the AO, the Appellant preferred an appeal before CIT(A) in search of relief. However, the CIT(A) passed an order dated 26.03.2025, confirming the demand made by the Ld. АО. On being aggrieved by the order of CIT(A), the Appellant Company preferred an appeal before the Tribunal for relief on various grounds.
On hearing both the sides we find that the impugned order has been passed by the NFAC by refusing to condone the delay of 164 days in filing the appeal. The assessee had explained before the ld. FAA that due to change in the registered address of the assessee in April, 2023 which was updated in the official income-tax record, but, the fact that the notices were still served on the old address has not been found to be a reasonable cause by the NFAC and the delay was found to be of substantial period and a big time lag.
We are of the considered view that quasi judicial authority and especially the tax authorities should be considerate to entertain a plea of an assessee for condonation of delay and especially when the assessee seeks the condonation on the basis of non-service of the notices which can be factually verified from the record. Therefore, without rebutting the claim of the assessee in a substantial manner, there is no justification for dismissing the appeal by not condoning the delay.
In the light of the aforesaid discussion, we are of the considered view that the facts narrated in the condonation application deserves to be accepted. Accordingly, condoning the delay, we restore the appeal on merits to the files of the ld.CIT(A)/NFAC to decide in accordance with the law