Tribunal grants Assessee's appeal, emphasizes substantive justice, remands case for fresh decision

The Tribunal allowed the Assessee's appeals for statistical purposes, directing the CIT(A) to decide on the merits in accordance with the law. The delay in filing appeals was condoned based on bona fide reasons provided by the Assessee, emphasizing that technicalities should not hinder substantive justice. The Tribunal set aside the CIT(A)'s order and remanded the case for a fresh decision, ensuring the Assessee's right to be heard.

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Issues Involved:
1. Levy of late fee under Section 234E of the Income-Tax Act, 1961.
2. Condonation of delay in filing appeals before the CIT(A).

Issue-wise Detailed Analysis:

1. Levy of Late Fee under Section 234E of the Income-Tax Act, 1961:

The Assessee filed statements of tax deducted at source (TDS) for various quarters in Form No.24Q/26Q/27EQ for the financial years 2012-13 to 2014-15 (assessment years 2013-14 to 2015-16). These statements were processed by CPC TDS, Bengaluru, and due to delays in filing, the Assessing Officer (AO) levied late fees under Section 234E of the Income-Tax Act, 1961. Section 234E mandates a fee of Rs. 200 per day for delays in filing TDS statements. The provision was inserted by the Finance Act, 2012, effective from 1st July 2012.

The Assessee challenged the levy of late fees, arguing that Section 200A, which deals with the processing of TDS returns, was amended by the Finance Act, 2015, effective from 1st June 2015. The Assessee contended that the AO could levy fees under Section 234E only by virtue of the amended provisions of Section 200A, which came into force from 1st June 2015. Therefore, the fee under Section 234E could not be levied for statements filed prior to 1st June 2015. The Assessee relied on the decision of the Karnataka High Court in Fatehraj Singhvi v. UOI [2016] 73 taxmann.com 252, which held that the amendment to Section 200A has prospective effect from 1st June 2015.

2. Condonation of Delay in Filing Appeals Before the CIT(A):

The CIT(A) found that the appeals filed by the Assessee were belated, with delays ranging from 751 days to 1971 days. The Assessee filed applications for condonation of delay, citing reasons such as being a small business with all affairs managed by the proprietor, web-based TDS compliance issues, non-receipt of TDS assessment orders, and reliance on the Karnataka High Court's decision in Fatehraj Singhvi. The Assessee argued that the delay was due to bona fide reasons and not negligence.

The CIT(A) rejected the condonation applications, distinguishing between marginal and inordinate delays, and citing the need for the Assessee to explain delays due to circumstances beyond control. The CIT(A) referred to various judicial precedents, including the Supreme Court's decision in Ramalal Vs. Rewa Coalfields Ltd., to conclude that the Assessee's reasons were routine and insufficient to condone the delay.

Tribunal's Decision:

The Tribunal considered the Assessee's grounds and the submissions of both parties. It noted that an intimation under Section 200A became appealable under Section 246A only from 1st June 2015. The Tribunal referred to the Supreme Court's principles in Mst. Katiji, emphasizing that substantial justice should prevail over technical considerations and that delays should be explained rationally and pragmatically. The Tribunal also referenced the ITAT Hyderabad Bench's decision in MSV IT Solutions Ltd. Vs. ITO, which condoned delays in similar circumstances.

Given the bona fide reasons provided by the Assessee and the principle that technicalities should not impede substantive justice, the Tribunal condoned the delay in filing the appeals. The Tribunal set aside the CIT(A)'s order and remanded the case to the CIT(A) for a decision on merits, ensuring due opportunity for the Assessee to be heard.

Conclusion:

The appeals by the Assessee were allowed for statistical purposes, with the Tribunal directing the CIT(A) to decide the appeals on merits in accordance with the law.

Pronounced in the open court on this 17th day of January, 2020.

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