2018 (5) TMI 2019 - AT - Income Tax

TDS u/s 194C - Non deduction on payment made in respect of expenditure incurred for freight and transport - CIT(A) has dismissed the appeal of the assessee on the ground that assessee has not filed the appeal electronically by referring the notification no. 11/2006 (F.No. 149/150/2015-TPL dated 01/03/2016 of the CBDT - HELD THAT - Vide circular no. 20/2016 dated 26/05/2011 of CBDT, the date of filing of appeal by electronic mode was extended up to 15/06/2016, however, the assessee had filed it electronically on 02/09/2016. At the initial stage the assessee had filed the appeal in the paper form in form no. 35 on 30/03/2016. As noticed that the assessee had brought to the notice of the CIT(A) that delay in filing appeal on electronic mode was because of unintended technical lapse. In this connection, we observed that the online filing of appeal was newly introduced during the year under consideration because of which the assessee had faced difficulty in uploading the appeal electronically in the system. The issuing of circulars by the CBDT for extending the date of filing the appeal implicit constraint and elucidate the hiccup in uploading the prescribed appeal in the system electronically. Assessee had filed the appeal on 30/03/2016 manually within the due date which could not be uploaded electronically because of the reasons stated supra in this order. The above stated facts and findings indeed indicate that there was a bona fide reasonable cause for not filing the appeal electronically by the assessee, therefore, as per our considered opinion the CIT(A) is not justified in dismissing the appeal. We restore this appeal to the file of the ld. CIT (A) for adjudication on merit after affording adequate opportunities to the assessee. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Maintainability of appeal based on CBDT Circular No. 20/2016
2. Disallowance of transport charges under section 40(a)(ia) of the Income Tax Act, 1961

Issue 1: Maintainability of appeal based on CBDT Circular No. 20/2016
The assessee filed an appeal for A.Y. 2013-14 challenging the CIT(A)2's order under section 143(3) of the Income Tax Act, 1961. The grounds of appeal included contentions regarding the maintainability of the appeal. The CIT(A) dismissed the appeal citing the non-maintainability based on CBDT Circular No. 20/2016 dated 25/05/2016. The assessee argued that the appeal had already been heard on 29/04/2016. The ITAT observed that the assessee initially filed the appeal in paper form on 30/03/2016, before the due date, but faced technical difficulties in uploading it electronically by the extended deadline of 15/06/2016. Considering the genuine reasons for the delay in electronic filing, the ITAT held that the CIT(A) was not justified in dismissing the appeal solely based on the mode of filing. Consequently, the ITAT restored the appeal to the CIT(A) for adjudication on merit after providing adequate opportunities to the assessee.

Issue 2: Disallowance of transport charges under section 40(a)(ia) of the Income Tax Act, 1961
During scrutiny assessment, it was found that the assessee had not deducted tax on payment made for freight and transport expenses as required under section 194C of the Act. As a result, the assessing officer disallowed transport charges amounting to &8377;34,43,324 under section 40(a)(ia) of the Act. The assessee appealed to the CIT(A) challenging this disallowance. The CIT(A) dismissed the appeal, emphasizing the delay in filing the appeal electronically. The ITAT noted that the assessee had a valid reason for the delay, as the online filing system was new and the assessee faced technical difficulties in uploading the appeal. Given the circumstances and the bona fide reasons provided by the assessee, the ITAT allowed the appeal for statistical purposes, overturning the CIT(A)'s decision and directing the CIT(A) to reconsider the case on its merits.

In conclusion, the ITAT's judgment in this case addressed the issues of maintainability of appeal based on a circular and the disallowance of transport charges under the Income Tax Act, 1961. The ITAT found in favor of the assessee on both issues, emphasizing genuine reasons for the delay in electronic filing and directing the CIT(A) to reconsider the case on its merits.