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Income Tax Appellate Tribunal, Hyderabad ‘SMC‘ Bench, Hyderabad
Before: Shri Manjunatha, G.
(िनधा�रण वष�/Assessment Year: 2011-12) Shri Rama Krishna Vs. Income Tax Officer Ramisetty Ward-1 Ranga Reddy Nalgonda PAN:AHLPR1765R (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri K.A. Sai Prasad, CA राज� व �ारा/Revenue by:: Shri Aravindakshan, DR सुनवाई की तारीख/Date of hearing: 04/11/2024 घोषणा की तारीख/Pronouncement: 04/11/2024 आदेश/ORDER
This appeal filed by the assessee is directed against the order dated 16/08/2024 of the learned CIT (A)-/ADDL/ JCIT(A)-1, Nagpur, relating to A.Y.2011-12.
The brief facts of the case are that the appellant, an individual was an employee with the State Bank of Hyderabad (now State Bank of India), at Colaba, Mumbai. The State Bank of Hyderabad (herein after referred (as the employer) had issued to the Appellant, a Form 16 dated 02.05.2011, wherein total income was Page 1 of 12 indicated at Rs. 9,86,373/-. However, the tax was deducted on actual income which was Rs. 5,02,558/-. Accordingly, the Appellant filed the return of income on 29.06.2011, admitting the total income to be Rs. 9,86,370/- totally relying on the Form 16 issued by the employer. Thereafter, the Central Processing Centre (herein after referred as CPC) issued an intimation u/s 143(1)(a) raising a demand of Rs 1,49,380/-. The demand of Rs.1,49,380/- could be because the tax TDS was done on actual income of Rs.5,02,558/-. Whereas the income indicated in the Form-16, income tax return and intimation u/s 143(1)(a) is Rs.9,86,373/-. Subsequently, intimation u/s 245 dated 12 October, 2013, was issued to the Appellant adjusting the refund of AY 2013-14 with demand of impugned AY. Upon receipt of intimation u/s 245 on 12- 10-2013 the Assessee became aware that income offered in the return was Rs.9,86,373/- as against actual income of Rs.5,02,558/- which was substantially lower than the amount mentioned in Form 16. Thereafter, the Appellant requested the Employer to issue updated/Revised Form-16 showing correct particulars. Subsequently, revised Form-16 was issued by the Employer on 20.11.2013, determining income to be Rs 5,02,558/-. However, the time limit to file revised return had expired by 31.03.2013 and accordingly, revised return could not be filed. Further, in response to the above Intimation for adjusting refund, the appellant filed letter with the Jurisdictional Assessing Officer and since there was no adjustment of refunds due against any Page 2 of 12 demand, he was under the presumption that the matter has been resolved.
Thereafter, the appellant has filed appeal on 17/06/2022 against the order passed u/s 143(1) of the I.T. Act, 1961 passed on 24/01/2013 by the Assessing Officer/CPC Bengaluru and such appeal has been filed after a delay of more than 10 years. The assessee has explained the reasons for not filing the appeal in time and according to the assessee, he has filed incorrect ITR based on incorrect Form-16 issued by his employer State Bank of Hyderabad. The Assessing Officer processed the return of income filed by the assessee and determined the tax liability of Rs.1,49,380/-. However, he could not notice the order passed by the Assessing Officer u/s 143(1) of the Act, until such time, the Assessing Officer issued intimation u/s 245 of the Act, dated 12/10/2023 after adjusting refund due for the subsequent A.Y against the tax liability for the A.Y 2011- 12. Thereafter, the assessee has approached his employer for issue of correct Form 16 and the employer has issued revised Form 16 on 26/11/2023 with nil tax liability. The assessee could not file belated return u/s 139(4) of the Act, because the due date for filing the return was already expired. The assessee has approached the Assessing Officer for rectifying the mistake, but the Assessing Officer has not responded to the letters filed by the assessee. The assessee was pursuing the matter with the Assessing Officer whenever the Assessing Officer issued notice for Page 3 of 12 recovery of tax. However, could not file appeal on the bonafide belief that his grievance would be resolved by the Assessing Officer. However, only after he came to know that the Assessing Officer has failed to resolve his grievance, the appellant had filed appeal on 17/06/22 before the learned CIT (A). Although, there is a delay of more than 10 years in filing of the appeal, but the said delay is neither intentional nor wanton of any undue benefit. Therefore, he requested the learned CIT (A) to condone the delay.
4. The learned CIT (A) after considering the relevant submissions and also by following certain judicial precedents, rejected the appeal filed by the assessee unadmitted by holding that the reasons given by the assessee for not filing the appeal within due date does not come under reasonable cause and thus, rejected the explanation of the assessee and dismissed the appeal in limini. The relevant findings of the learned CIT (A) are as under:
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Aggrieved by the order of the learned CIT (A), the assessee is in appeal before the Tribunal.
The learned Counsel for the assessee referring to the dates and events including the order passed u/s 143(1) of the Act, and subsequent intimation u/s 245 of the Act, submitted that the assessee was sincerely following the issue with the Assessing Officer for rectifying the mistake and therefore, did not file appeal on bonafide belief that his grievance would be resolved by the Page 8 of 12 Assessing Officer. Further, the Assessing Officer has fastened tax liability on the assessee on the income which is not at all accrued to the assessee which is evident from the Revised Form 16 issued by the employer and as per Revised Form 16, there is no tax liability as per employer itself. Since the assessee was under bonafide belief that there is no need to file appeal against the order passed by the Assessing Officer, the delay in filing of the appeal should have been condoned by the learned CIT (A). Therefore, he submitted that a direction may be given to the learned CIT (A) to condone the delay in filing of the appeal and decide the issue on merit.
The learned DR, on the other hand, supporting the orders of the learned CIT (A) submitted that sufficient cause as provided under the Act, means the cause which is beyond the control of the assessee. In the present case, the assessee is showing negligence on the part in not filing the appeal even through the Assessing Officer has passed order u/s 143(1) of the Act, and raised the demand. Although, there is no tax demand as per revised Form 16 issued by the employer but that alone is not sufficient for condoning huge delay of 10 years. Therefore, the delay in filing of the appeal should not be condoned and the order of the learned CIT (A) should be upheld.
I have heard both the parties, perused the material available on record and gone through the orders of the authorities
Page 9 of 12 below. There is no dispute with regard to the fact that there is a delay of more than 10 years in filing of appeal before the learned CIT (A). In fact, the Assessing Officer passed the assessment order u/s 143(1) on 24/01/2013 and in ordinary course, the appellant should have filed appeal on 23.02.2013. However, the appeal was filed on 17/06/2022 with a delay of nearly a decade. Going by the period of delay and reasons given by the assessee, in my considered view, it is not fit cause for condonation of delay. However, if we go by the demand raised by the Assessing Officer and subsequent revised Form 16 issued by the employer, in my considered view, the tax liability is fastened on the assessee purely on the mistake committed by the employer, State Bank of Hyderabad. Admittedly, the appellant is an employee of SBH, a public sector bank. In case of salaried employee, the tax is deducted at source on total income of the appellant. In the present case, there is no dispute as per revised Form 16 issued on 26/11/2013, the net tax payable/refundable to the assessee was at Rs. Nil. If we go by substance over Form, the cause of substance needs to be looked into rather than form, because as per Article 265 of the Constitution of India, no tax can be collected unless an authority of law. In the present case, tax liability has been fastened on the assessee without an authority of law, because the Assessing Officer raised demand on the income which is not at all accrued or received by the assessee. Since it is a well settled principle of law that unless authority of law, no tax can be collected, in my considered view, if the appeal filed by the Page 10 of 12 assessee is rejected on technical ground of not filing appeal on or before the dud date, then it is as good as the taxes has been collected without an authority of law contrary to Article 265 of the Constitution of India. Therefore, in my considered view, going by the facts of the present case, as a special case, the delay in filing of appeal before the learned CIT (A) needs to be condoned. Thus, I condone the delay in filing of the appeal before the learned CIT (A) and set aside the order of the learned CIT (A) to the file of the learned CIT (A) to admit the appeal filed by the assessee and decide the issue on merits after providing reasonable opportunity of being heard to the assessee. I further made it clear that, this order cannot be taken as a precedent or authority for any other cases in so far as condonation of delay in filing of appeal before the first appellate authority or before the Tribunal.
In the result, appeal filed by the assessee is allowed for statistical purposes.