2016 (3) TMI 1325 - AT - Income Tax

TDS u/s 195 - liability to deduct tax at source on the remittances made by it to International Air Transport Association (Canada) - Held that - CIT(A) has held that for every remittances there should be separate appeal. We are not able to appreciate as to what are the basis with the Ld. CIT(A) to lay down such kind of proposition. In our considered opinion for every order passed u/s. 195(2) there would be only one appeal required to be filed u/s. 248 before CIT(A). But if the order u/s. 195(2) is for the remittances for more than one financial year and consolidated order is passed u/s. 195(2) then separate appeal will be required to be filed for each year. Thus we direct Ld. CIT(A) to take up the appeals keeping in view aforesaid guidelines. Eligibility of the appellant for filing of appeal u/s. 248 - Held that - In the cases before us if the tax liability is ultimately born by Geneva-India (i.e. appellant before us) under any arrangement made between the parties inter-se even if initial written agreement may not clearly suggest so then under such circumstances he can be said to have complied with requisite condition of section 248. Therefore we send this issue back to the file of CIT(A) to examine the facts of these cases keeping in mind this legal background. The appellant is directed to submit before the Ld. CIT(A) all requisite evidences to show that the appellant has borne impugned liability of tax deducted at source under an agreement or other arrangement as the case may be. CIT(A) shall give adequate opportunity of hearing to the appellant and shall allow him to raise all legal and factual issues on this aspect. The appellant shall also file requisite evidences to show that the impugned amount of tax has been paid by it to the credit of Central Government which is another mandatory condition for filing of appeal u/s. 248

Summary

Issues Involved:
1. Filing of appeals late before the Ld. CIT(A).
2. Requirement of filing separate appeals for each remittance.
3. Eligibility of the appellant for filing an appeal under section 248 of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Filing of Appeals Late Before the Ld. CIT(A):

The Ld. CIT(A) refused to grant condonation for the delay in filing the appeals, citing that the petition for condonation was not attached with the appeal memo and the appellant failed to provide sufficient cause for the delay. However, the Tribunal found that it is not mandatory for the condonation petition to be attached with the appeal memo, as long as it is filed before the hearing date. The appellant had submitted a duly sworn affidavit and a detailed note explaining the delay, which should have been considered. The Tribunal emphasized that the delay was inadvertent and not due to any malafide intention. The Tribunal referenced various judgments, including those of the Hon'ble Supreme Court, to support a liberal approach in condoning delays. Consequently, the Tribunal condoned the delay and directed the Ld. CIT(A) to take the appeals on record for hearing.

2. Requirement of Filing Separate Appeals for Each Remittance:

The Ld. CIT(A) held that separate appeals were required for each remittance. The Tribunal disagreed, stating that for every order passed under section 195(2), only one appeal is required under section 248. However, if the order under section 195(2) pertains to remittances for more than one financial year, separate appeals are necessary for each year. The Tribunal directed the Ld. CIT(A) to reconsider the appeals based on these guidelines.

3. Eligibility of the Appellant for Filing an Appeal Under Section 248:

The Ld. CIT(A) dismissed the appeals, stating that the appellant did not fulfill the condition of bearing the tax liability under an agreement or arrangement, as required by section 248. The Tribunal clarified that section 248, post-amendment by the Finance Act, 2007, requires the tax liability to be borne by the payer under an agreement or arrangement for appeals concerning remittances made after 01.06.2007. For remittances made before this date, the previous provisions apply, which do not include this condition. The Tribunal directed the Ld. CIT(A) to re-examine the appeals, considering whether the tax liability was borne by the appellant under any arrangement, even if not explicitly stated in the initial agreement. The Tribunal also instructed the Ld. CIT(A) to verify that the tax amount was paid to the credit of the Central Government, another mandatory condition for filing an appeal under section 248.

Conclusion:

All appeals were sent back to the Ld. CIT(A) for re-examination and re-adjudication in light of the Tribunal's directions. The appellant is allowed to raise all legal and factual issues and submit requisite evidence. The Ld. CIT(A) is to provide adequate opportunity for the appellant to make submissions and present evidence before deciding the appeals on merits. The appeals are allowed for statistical purposes.