2022 (5) TMI 1563 - AT - Income Tax

Delay in filing the appeal against the order levying interest u/s 234E - delay of 255 days - Covid -19 pandemic Lockdown situation - HELD THAT - In Re Cognizance for Extension of Limitation the Hon ble Supreme Court 2021 (5) TMI 564 - SC ORDER decided to extend the period of limitation of filing cases in various legal fora with effect from 14.03.2021 until further orders in view of hardships faced by litigants due to the alarming Covid-19 situation. It was directed vide order dated 23rd March, 2020 that the period of limitation in filing petitions/ applications/ suits/ appeals/ all other proceedings, irrespective of the period of limitation prescribed under the general or special laws, shall stand extended with effect from 15th March, 2020 till further orders Apex Court on 23 September 2021 recalled the limitation extension w.e.f. 2 October 2021. However, the Apex Court was mindful in stating that the recall order was subject to the uncertainties pertaining to the third wave of Covid-19 pandemic. As India witnessed a sharp rise in the Covid-19 cases in January 2022, the Hon'ble Supreme Court decided to restore the limitation extension. As per the order of the Apex Court dated 10 January 2022, the period from 15 March 2020 to 28 February 2022 would stand excluded for the purpose of limitation. It is therefore clear that even the Hon ble Supreme Court has taken cognisance of the pandemic situation and extended the period of limitation. It is clear from the order of the CIT(A) that the notices in question were issued during the covid period and the Assessee s contention that it could not respond to the notices in view of the pandemic situation has to be accepted as a reasonable cause. Appeals of the Assessee are allowed for statistical purposes.

Summary

Issues Involved:
1. Levy of late fee under Section 234E for delayed filing of TDS statements.
2. Validity of such levy for periods prior to 1.6.2015.
3. Delay in filing appeals before the CIT(A).
4. Ex-parte decision by CIT(A) due to non-response from the Assessee.
5. Extension of limitation period due to Covid-19 pandemic.

Issue-wise Detailed Analysis:

1. Levy of Late Fee under Section 234E:
The Assessee filed TDS statements for various quarters in FY 2012-13 to 2014-15, which were processed by CPC TDS, Bengaluru. Due to a delay in filing, the AO levied a late fee under Section 234E of the Income Tax Act, 1961. Section 234E mandates a fee of Rs. 200 per day for delays in filing TDS statements.

2. Validity of Levy for Periods Prior to 1.6.2015:
The Assessee contended before the CIT(A) that the levy of fees under Section 234E while processing TDS returns under Section 200A was only permissible from 1.6.2015, as per the amendments made by the Finance Act, 2015. The Assessee relied on the Karnataka High Court’s decision in Fatehraj Singhvi v. UOI, which held that the amendment allowing the levy of fees under Section 234E during processing of TDS returns had only prospective effect from 1.6.2015 and could not be applied retrospectively.

3. Delay in Filing Appeals Before the CIT(A):
The CIT(A) noted that the appeals were filed belatedly. The Assessee explained the delay was due to a pending application under Section 119 of the Act for waiving the fees, but no response was received, causing the delay. The CIT(A) found the explanation unsatisfactory and refused to condone the delay, citing lack of evidence and the requirement to explain each day's delay.

4. Ex-parte Decision by CIT(A):
The CIT(A) decided the appeals ex-parte due to the Assessee's non-response to multiple notices issued during the Covid-19 pandemic. The Assessee argued before the Tribunal that the non-response was due to the pandemic, which restricted office operations.

5. Extension of Limitation Period Due to Covid-19 Pandemic:
The Tribunal considered the Supreme Court’s orders extending the limitation period due to the Covid-19 pandemic. The Supreme Court had extended the limitation period from 15.03.2020 to 28.02.2022, recognizing the pandemic's impact on legal proceedings. Consequently, the Tribunal found no delay in filing the appeals.

Conclusion:
The Tribunal acknowledged the Supreme Court's extension of the limitation period and accepted the Assessee's reason for non-response during the pandemic. It set aside the CIT(A)’s orders and remanded the matter for fresh consideration, directing the CIT(A) to afford the Assessee an opportunity to present their case. The appeals were allowed for statistical purposes, emphasizing the need for the Assessee to cooperate and provide necessary information to the CIT(A).

Result:
The appeals of the Assessee were allowed for statistical purposes, with directions for a fresh hearing by the CIT(A).

Pronouncement:
The decision was pronounced in the open court on the specified date.