2022 (6) TMI 891 - AT - Income Tax

Tribunal allows delayed appeals with cost, bars Assessing Officer's orders, and partially allows appeals on other grounds.

Bank of India Versus DCIT (TDS), Circle–1, Nagpur

The Tribunal condoned the delay in filing the appeals subject to a cost and admitted them for adjudication on merits. It held that the Assessing Officer's ... Condonation of delay in filing the appeal before CIT(A) - Eligible reasons of delay - HELD THAT:- As assessee in its averments has not made out any case that there was reasonable cause which being beyond the control of the assessee, prevented it from filing the appeals in time before the Tribunal. The delay cannot be condoned merely because the assessee's case calls for sympathy or merely out of benevolence. For the exercise of discretion in condoning the delay, it must be established beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence on its part. Sufficient cause as contemplated in the limitation provisions must be a cause which is beyond the control of the assessee. In the case on hand as clearly established that the delay was due to the latches and inaction on the part of the assessee, which could have been avoided by the assessee if it had exercised due care and attention and we agree with the contention of the ld DR that there were no compelling circumstances which prevented the assessee from filing the appeal in time and lack of internal processes cannot be a valid reason for condoning the delay and merely because the assessee is a public institution, it shouldn’t expect any advantage over any other private entity. At the same time, respectfully following the decision of the Hon’ble Supreme Court in case of Anil Kumar Nehru [2019 (1) TMI 1075 - SC ORDER] and in the interest of substantial Justice, we hereby condone the delay subject to cost of Rs 500/- for each of the sixteen appeals totaling to Rs 8,000/- to which the ld AR has agreed. Validity of orders under sec 201(1)/201(1A) - period of limitation - HELD THAT:- TDS statements in Form 26Q have been filed by the respective branches of the assessee bank for each of the four quarters pertaining to financial year 2009-10 and financial 2010-11 and considering the limitation period of two years from the end of the financial year in which the last of the quarterly statements have been filed, we find that the limitation period for the financial year 2009- 10 relevant to assessment year 2010-11 expires on 31.03.2013 and for the financial year 2010-11 relevant to assessment year 2011-12 expires on 31.03.2014 whereas the assessment orders u/s 201(1)/201(IA) have been passed in last week of March 2017 and March 2018 respectively as noted above. Thus section 201(3), as amended by Finance Act No.2 of 2014 shall not be applicable in the instant case as limitation had already expired prior to amended section 201(3) as amended by Finance Act No.2 of 2014 w.e.f 1.10.2014. In light of the same, we are of the considered view that all the orders passed by the Assessing officer under section 201(1)/201(IA) are barred by the limitation and are hereby set-aside. The ground of appeal taken by the assessee in all these sixteen appeals wherein the order of the Assessing officer has been challenged as barred by limitation is thus allowed. Issues Involved:1. Condonation of delay in filing the appeal.2. Validity of the Assessing Officer's order under section 201(1)/(1A) of the Income Tax Act, 1961, considering the limitation period.Detailed Analysis:1. Condonation of Delay in Filing the Appeal:The assessee challenged the rejection of its prayer for condoning the delay in filing the appeal. The delay was attributed to multiple factors: the orders were received at individual branches, branch staff were unaware of procedural aspects, frequent transfers of branch managers, lack of centralized handling, and the COVID-19 pandemic. The assessee cited several judicial precedents to argue that technical delays should be ignored in the interest of substantial justice.The Revenue countered that the delay was around 987 days, with 687 days remaining even after excluding the COVID-19 period, indicating negligence on the part of the assessee. It was argued that ignorance of law and lack of internal processes do not constitute sufficient cause for condonation of delay.The Tribunal acknowledged the delay but emphasized that sufficient cause must be established beyond doubt. However, in the interest of substantial justice and following the Supreme Court decision in Anil Kumar Nehru's case, the Tribunal condoned the delay subject to a cost of Rs 500/- per appeal, totaling Rs 8,000/-. The appeals were admitted for adjudication on merits.2. Validity of the Assessing Officer's Order Under Section 201(1)/(1A) Considering the Limitation Period:The assessee argued that the orders passed by the Assessing Officer were beyond the limitation period provided under section 201(3)(i) of the Income Tax Act. The last quarterly TDS statement for FY 2009-10 was filed on 17.05.2011, making the limitation period expire on 31.03.2014. However, the orders were passed on 27.03.2018, beyond the limitation period.The Revenue relied on the amendment brought by the Finance Act, 2014, which prescribed a limitation period of seven years from the end of the financial year in which the payment was made. The Revenue argued that the orders were within this amended limitation period.The Tribunal referred to the Gujarat High Court decision in Tata Teleservice v/s Union of India, which held that the amendment by the Finance Act, 2014, is prospective and not retrospective. The Tribunal also cited the Pune Bench decision in the assessee's own case, which supported the view that the orders were barred by limitation.The Tribunal concluded that the orders passed by the Assessing Officer were barred by limitation as the limitation period had expired before the amendment by the Finance Act, 2014. Consequently, the orders under section 201(1)/(1A) were set aside.Conclusion:The Tribunal condoned the delay in filing the appeals subject to a cost and admitted the appeals for adjudication on merits. It held that the orders passed by the Assessing Officer under section 201(1)/(1A) were barred by limitation and set them aside. The other grounds raised by the assessee became academic and were dismissed as infructuous. The appeals were partly allowed in light of these directions.