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Facts
The assessee, a Non-Resident of India, left for employment in the US and claimed exemption under the India-US DTAA. The exemption and TDS credit were denied by the AO. The appeal filed before the CIT(A) was dismissed due to a delay, which the assessee argued was incorrectly calculated due to Supreme Court directions regarding the COVID-19 period.
Held
The Tribunal found that the CIT(A) dismissed the appeal, condonation of delay, and the appeal itself in violation of the Supreme Court's directions. The Tribunal condoned the delay and restored the matter to the CIT(A) for a fresh decision.
Key Issues
Whether the CIT(A) erred in dismissing the appeal due to delay without considering the Supreme Court's directions for condonation. Whether the adjustment made under Section 143(1) was debatable and if TDS credit was wrongly disallowed.
Sections Cited
250, 143(1), 90, 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: SHRI S RIFAUR RAHMAN & SHRI VIMAL KUMAR
O R D E R
PER VIMAL KUMAR, JUDICIAL MEMBER:
The appeal filed by assessee is against order dated 17.10.2024 of Learned Commissioner of Income-Tax (Appeals), Bhubaneswar (hereinafter referred as “the Ld. CIT(A)”) under Section 250 of the Income Tax Act, 1961 ( hereinafter referred as “the Act”) arising out of assessment order dated 04.01.2020 of the Learned Assessing Officer/ADIT, CPC, Bangalore (hereinafter referred as “Ld. AO") under Section 143(1) of the Act for assessment year 2017-18.
Brief facts of case are that assessee left India for purpose of employment in US. The assessee had stay of less than 182 days in India during assessment year 2017-18. Assessee filed return of income on IT Portal claiming exemption from salary income covered under Article 16(1) of the India-US Double Taxation Avoidance Agreement (“DTAA”) read with section 90 of the Act read with CBDT Circular No. 333 dated 2nd April, 1982. The relief claimed was denied and TDS credit was not allowed in full as reflected in Form 26AS by then Ld. AO vide order dated 04.01.2020.
Against order dated 04.01.2020 of Ld. Assessing Officer, the appellant/assessee filed application for condonation of delay of 144 days in filing and appeal before Ld. CIT(A) which was dismissed vide order dated 17.10.2024.
Being aggrieved, the appellant/assessee preferred present appeal with following grounds:
“Ground No.1: On the facts and circumstances of the case and in law, the Learned Additional/ Joint Commissioner of Income-tax (Appeals), Bhubaneswar [Ld. ADDL/JCIT(A)], has erred in deciding the Appeal of the Appellant even when the Jurisdiction to decide the Appeal was with the Ld. Commissioner of Income-tax (Appeals) [CIT(A)], Delhi-44 and this fact was mentioned in the Appellant's letters dated 12 January 2023, 24 February 2023 and 24 April 2023. It is prayed that the due directions be issued for decision on the Appeal of the Appellant by the Ld. CIT(A), Delhi-44.
Ground No. 2: On the facts and circumstances of the case and in law, the Ld. ADDL/JCIT(A) has erred in holding that there was a delay of 144 days in filing of the Appeal against the Intimation under Section 143(1) of the Income-tax Act, 1961 (Act) while the delay was only of 40 days (from 04 February 2020 to 14 March 2020) as per the directions issued by the Hon'ble Supreme Court in its decision dated 10 January 2022. It is prayed that the delay for the period from 15 March 2020 does not merit to be considered for computing the period of delay in filling of the Appeal in view of the following directions issued by the Hon'ble Supreme Court in its decision dated 10 January 2022 wherein the following directions were issued: “ ----- i…… ii….. III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply." Ground No.3: On the facts and circumstances of the case and in law, the Ld. ADDL/JCIT(A) has erred in not condoning the delay in filing of the Appeal against Intimation under Section 143(1) of the Act, even when the delay in filing of the Appeal was caused on account of pursuing alternative remedy of Rectification Proceedings under Section 154 of the Act. It is prayed that the Order of the Ld. ADDL/JCIT(A) of not condoning the delay is contrary to several judicial precedents Including the following orders of the Hon'ble ITAT wherein it is held that the delay in filling of the Appeal against the Intimation under Section 143(1) of the Act merits to be condoned when the assessee is pursuing alternative remedy of Rectification Proceedings under Section 154 of the Act:
Order of the Pune bench of the Hon'ble ITAT in the case of Prasad Nimba Thakur vs ITO Ward 13(4), Pune, ITA No. 89/PUN/2023;
Order of the Hyderabad bench of the Hon'ble ITAT in the case of Ashish Agrawal vs Income Tax Officer Ward-12(1), Hyderabad (ITA No. 337/Hyd/2023) Ground No. 4: On the facts and circumstances of the case and in law, the Ld. ADDL/JCIT(A) has erred in not directing the Ld. Jurisdictional Assessing Officer (JAO) to delete the adjustment (addition) of Rs. 67,20,888 made under the head "Income from Salary' in the Intimation under Section 143(1) of the Act. It is prayed that the Ld. JAO be directed to delete the adjustment (addition) of Rs. 67,20,888 made under the head "Income from Salary' in the Intimation under Section 143(1) of the Act. Ground No.5: On the facts and circumstances of the case and in law, the Ld. ADDL/JCIT(A) ought to have held that the adjustment (addition) under the head 'Income from Salary in the Intimation under Section 143(1) of the Act is a debatable issue and no adjustment relating to debatable issues can be made in the Intimation under Section 143(1) of the Act. It is prayed that the Order of the Ld. ADDL/JCIT(A) is contrary to the following judicial pronouncements: Order of the Hon'ble ITAT in the case of City Manager Association vs. DCIT, CPC Bengaluru, (ITA No.1345/Ahd/2019); Order of Hon'ble ITAT in the case of Paris Elysees India Private Limited vs. Deputy Commissioner of Income Tax, Decision of the Hon'ble Supreme Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers (P.) Ltd [2007] 291 ITR 500.
Ground No.6: On the facts and circumstances of the case and in law, the Ld. ADDL/JCIT(A) has erred in not directing the Ld. JAO to allow credit of Tax Deducted at Source (TDS) of Rs. 19,53,556 as claimed in the Return of Income and also reflected in Form 26AS as against TDS credit of only Rs. 80,012 allowed in the Intimation under Section 143(1) of the Act.
It is prayed that the Ld. JAO be directed to allow TDS credit of Rs. 19,53,556 as claimed in the ROI and reflected in Form 26AS as against the TDS credit of only Rs. 80,012 allowed in the Intimation under Section 143(1) of the Act. The Appellant craves leave to add, alter, amend, or withdraw any/ all of the above Grounds of Appeal either before or during the hearing of the Appeal.”
5. Learned Authorized Representative for the appellant/assessee submitted that Ld. CIT(A) erred in dismissing application for condonation of delay of 144 days in filing appeal and appeal. Ld. CIT(A) erred in holding that there was delay of 44 days in filing appeal while the delay was 40 days i.e. from 04.02.2020 to 14.03.2020. As per direction of Hon'ble Supreme Court in decision dated 10.01.2022, limitation period from 15.03.2020 to 28.02.2022 was not to be considered. So, the matter may be restored to the file of Ld. CIT(A).
Learned Authorized Representative for the Department of Revenue had no objection.
From examination of record in light of aforesaid rival contentions, it is crystal clear that appellant/assessed, Non-Resident of India had preferred an application for condonation of delay and appeal which were dismissed vide order dated 17.10.2024 in violation of directions of Hon'ble Supreme Court dated 10.01.2022.
In view of above material facts in the interest of justice, it is considered expedient to set aside the order of Ld. CIT(A), condone the delay in filing appeal before the Ld. CIT(A) and restore the matter to the file of Ld. CIT(A), Delhi-44 for fresh decision in accordance with law after affording fair opportunity of hearing to the assessee.