2020 (4) TMI 359 - AT - Income Tax

Tribunal allows appeal delay, prioritizes substantive justice over technicalities.

The Tribunal concluded that the delay in filing the appeals should be condoned, emphasizing that technicalities should not hinder substantive justice. The ... Condonation of filling appeal - Levy of late fee u/s.234E - Order passed u/s.200A read with Sec.154 - delay in filing statement of TDS within the prescribed time - HELD THAT:- An intimation u/s.200A of the Act became an appealable order u/s.246A of the Act, only consequent to amendment by the Finance Act, 2015 w.e.f. 1.6.2015. Prior to the said date an intimation u/s.200A was not appealable. At the outset, we observe that the Hon’ble Supreme Court, in the case of Mst. Katiji [1987 (2) TMI 61 - SUPREME COURT] has explained the principles that need to be kept in mind while considering an application for condonation of delay. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner ITAT Hyderabad Bench in the case of MSV IT Solutions Ltd. Vs. ITO, Ward 16(4) [2018 (10) TMI 1774 - ITAT HYDERABAD] wherein on identical facts noticing that there was no legal remedy prior to 1.6.2015 against an intimation u/s.200A of the Act, the Hyderabad Bench condoned delay in filing appeal before CIT(A). Considering the reasons given by the Assessee for condonation of delay and keeping in mind that technicalities should not stand in the way of rendering substantive justice, we are of the view that the delay in filing the appeals deserves to be condoned. Issues Involved:1. Levy of late fee under Section 234E of the Income Tax Act.2. Validity of charging fee under Section 234E for periods prior to 1.6.2015.3. Condonation of delay in filing appeals before the CIT(A).Detailed Analysis:1. Levy of Late Fee under Section 234E of the Income Tax Act:The assessee filed TDS statements for various quarters for FYs 2012-13 and 2013-14, which were processed by CPC TDS, Bengaluru. Due to delays in filing these statements, the Assessing Officer (AO) levied late fees under Section 234E of the Income Tax Act. Section 234E imposes a fee of Rs. 200 per day for delays in filing TDS statements. The assessee contended that the AO could levy this fee only after the amendment to Section 200A, which came into effect from 1.6.2015.2. Validity of Charging Fee under Section 234E for Periods Prior to 1.6.2015:The assessee argued that the provisions enabling the levy of fees under Section 234E while processing TDS returns (Section 200A(1)(c), (d), and (f)) were introduced only from 1.6.2015. Therefore, the levy of fees for periods prior to this date was challenged. The assessee relied on the Karnataka High Court's decision in Fatehraj Singhvi v. UOI, which held that the amendment had only prospective effect from 1.6.2015. Consequently, no fee under Section 234E could be levied for delays in TDS returns filed before this date.3. Condonation of Delay in Filing Appeals before the CIT(A):The CIT(A) found that the appeals were filed with significant delays, ranging from 895 to 1921 days. The assessee filed an application for condonation of delay, citing reasons such as conflicting judgments on the levy of late fees under Section 234E and the belief that no fees would be levied for periods prior to 1.6.2015. The CIT(A) dismissed the appeals, stating that the reasons provided were routine and did not constitute sufficient cause for the delay.Upon appeal to the Tribunal, it was noted that an intimation under Section 200A became appealable only from 1.6.2015, following the amendment by the Finance Act, 2015. The Tribunal considered the principles laid down by the Supreme Court in the case of Mst. Katiji, emphasizing that substantial justice should prevail over technical considerations. The ITAT Hyderabad Bench's decision in MSV IT Solutions Ltd. was also referenced, where a similar delay was condoned due to the lack of a legal remedy prior to 1.6.2015.Conclusion:The Tribunal concluded that the delay in filing the appeals should be condoned, as technicalities should not hinder substantive justice. The Tribunal set aside the CIT(A)'s order and remanded the issue back to the CIT(A) for a decision on merits, in accordance with the law, and after providing due opportunity to the assessee to be heard.Result:All appeals by the assessee were treated as allowed for statistical purposes. The judgment was pronounced in the open court on 22nd January 2020.