2023 (4) TMI 998 - AT - Income Tax

Tribunal dismisses appeals over late filing fee waiver denial under Income Tax Act

Balajee Constructions Versus Deputy Commissioner of Income Tax, TDS Ward-1, Visakhapatnam, Andhra Pradesh.

The Tribunal upheld the decision to dismiss three appeals filed by the assessee against the denial of waiver of late filing fee under section 234E of the ... Seeking waiver for late fee and rectification U/s. 154 before the Ld. AO - Late filing fee u/s. 234E - assessee has filed e-TDS return belatedly for the respective quarters of the impugned AY under consideration which was processed u/s. 200A of the Act - HELD THAT:- Assessee filed a letter on 24/01/2019 seeking waive-off of late fee and rectification u/s.154 before the AO. AO did not pass any rectification order since it is not a petition u/s.154. ITO (TDS), Ward-1, Visakhapatnam responded to the assessee’s letter stating that the waive-off of the late filing fee is out of his scope. In our view the assessee ought to have filed a petition seeking rectification of the order passed by the Ld. AO instead of filing a letter. Assessee filed an appeal based on the letter issued by the Ld. ITO (TDS), Ward-1, Visakhapatnam instead of filing the appeal against the intimation. CIT(A)-NFAC, following the provisions of section 246A of the Income Tax Act, 1961 dismissed the appeal of the assessee in limine as the same is not a maintainable appeal. One can clearly understand that the letter issued by the Ld. ITO, Ward-1, Visakhapatnam dated 10/05/2019 is nothing but a response to the letter filed by the assessee seeking waive-off of late filing fee imposed by the Ld. AO. Therefore it is not an appealable order before the Appellate Authorities as described in the provisions of the IT Act, 1961. CIT(A)-NFAC has rightly concluded that the grounds of appeal raised by the assessee cannot be adjudicated on merits since the appeal itself is not maintainable and therefore dismissed in limine. We have no hesitation to come to a conclusion that the Ld. CIT(A)-NFAC’s order holds good as there is no infirmity in the order of the Ld. CIT(A)-NFAC and accordingly no interference is required. Assessee appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether the delay of 16 days in filing the appeals before the Tribunal ought to be condoned in view of the stated reason (managing partner affected with COVID symptoms). 2. Whether an appeal filed against a letter from the Income Tax Officer responding to a request for waiver of late filing fee (letter denying waiver and directing payment) is maintainable before the Commissioner (Appeals) / Appellate authorities, having regard to the scope of appealable orders under section 246A of the Income Tax Act. 3. Whether the grounds challenging levy of late filing fee under section 234E (and related processing under section 200A) can be adjudicated when the appeal is filed against a non-appealable letter instead of the intimation/order under section 200A or by seeking rectification under section 154. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Condonation of delay of 16 days Legal framework: Provisional principles governing condonation of delay in filing appeals before the Tribunal (discretion to condone where sufficient cause exists). Precedent treatment: No precedents cited or relied upon in the judgment. Interpretation and reasoning: The petitioner filed a condonation petition stating that the managing partner was confined at home with COVID symptoms until 28/11/2022 and the appeal was filed on 06/12/2022, causing a delay of 16 days. On perusal of the petition and hearing submissions, the Tribunal accepted that the assessee was prevented by a reasonable and sufficient cause from filing the appeal within time. Ratio vs. Obiter: Ratio - the Tribunal exercised its discretion to condone a short delay where illness of a key person responsible for filing was shown as a reasonable cause. Conclusion: Delay of 16 days in filing the appeals is condoned and the appeals are admitted for adjudication on merits. Issue 2 - Maintainability of appeal filed against a letter refusing waiver of late filing fee (scope of section 246A) Legal framework: Section 246A enumerates the orders appealable before the Commissioner (Appeals); appealable orders include assessment orders, orders under section 154, penalty orders listed, intimations under section 143(1) / (1B) where adjustments are objected to, and other specified categories. The statutory language does not treat a mere administrative letter responding to a request for waiver as an appealable order. Precedent treatment: No earlier decisions were followed or distinguished in the judgment; the Tribunal applied the statutory text directly. Interpretation and reasoning: The Tribunal found that the letter dated 10/05/2019 from the ITO was a response to the assessee's letter seeking waiver of the late filing fee and was not itself an order enumerated in section 246A. The cause of grievance arose from the intimation/order processed under section 200A and the levy under section 234E. The appeal, however, was filed against the non-appealable response letter rather than the intimation/order. Form 35 column entries corroborated that the appeal related to the letter received on 10/05/2019. The Tribunal held that grounds of appeal that are primarily directed against the order passed under section 200A/section 234E cannot be adjudicated when the appeal is lodged against the letter which is not an appealable order under section 246A. Ratio vs. Obiter: Ratio - an appeal filed against a mere response/letter denying waiver of a demand is not maintainable where that letter does not constitute any category of appealable order under section 246A; relief must be sought by appealing the intimation/order (or by appropriate rectification under section 154) to enable adjudication of the substantive grounds. Conclusion: The appeal filed against the letter refusing waiver is not maintainable; the Commissioner (Appeals) correctly dismissed the appeal in limine for lack of jurisdiction to adjudicate the grounds when the appeal was not directed against an appealable order. Issue 3 - Appropriateness of remedy: appeal against intimation/order or rectification under section 154 when challenging levy under section 234E Legal framework: Remedies against assessment/intimation include appeal under section 246A against enumerated orders; rectification of orders lies under section 154 where an assessee seeks correction of a mistake apparent from record. Precedent treatment: No express precedents cited; Tribunal applied procedural/administrative law principles and statutory scheme. Interpretation and reasoning: The Tribunal observed that the assessee ought to have filed a rectification petition under section 154 against the intimation/order passed under section 200A or appealed against that intimation/order, rather than relying on the ITO's administrative response letter. Because the substantive grievance arose from the section 200A/234E order, initiating proceedings against the non-appealable letter precluded adjudication on merits. The Tribunal noted the amendment to section 200A by Finance Act, 2015 (inserting clauses) was argued by the assessee but held that procedural correctness of initiating appeal - i.e., appealing the proper order or seeking rectification - was a prerequisite to merits adjudication. The Tribunal therefore declined to reach merits of the section 234E challenge because of non-maintainability. Ratio vs. Obiter: Ratio - procedurally proper remedy must be invoked (rectification under section 154 or appeal against the intimation/order); failure to do so results in dismissal in limine even if substantive grounds are raised in the pleadings. Conclusion: As the appellant pursued an appeal against a non-appealable administrative letter instead of the intimation/order or rectification, the Tribunal upheld the dismissal in limine and did not adjudicate the substantive contention on applicability of section 234E. Disposition and Application to Related Appeals Interpretation and reasoning: The three appeals involved identical grounds and facts across assessment years. Having condoned delay and determined the appeal in limine for the lead assessment year on the ground of non-maintainability, the Tribunal applied the same reasoning mutatis mutandis to the remaining two appeals. Ratio vs. Obiter: Ratio - identical facts and procedural posture permit application of the same conclusion to multiple appeals where the defect is procedural (appeal against non-appealable letter). Conclusion: All three appeals are dismissed for non-maintainability (subject to the condonation of delay already granted for filing). The Tribunal did not decide substantive issues concerning the levy under section 234E in the present proceedings because the appeals were not properly directed against appealable orders.