2021 (7) TMI 1441 - AT - Income Tax

Condonation of delay 516 days rejected - Short credit for tax deducted at source - above reasonable cause for the delay 516 days was not accepted by CIT(A), who dismissed the appeal in limine, as he was of the opinion that assessee has consciously chosen not to file appeal against the order - HELD THAT - The inference of CIT(A) is apparently correct that assessee has consciously chosen not to file appeal before CIT(A) against the order dated 24.03.2014. The plea before Ld.CIT(A) was that on advice of a counsel, the appeal was filed as assessee was also contesting similar issues before ITAT for AY 2010-11. The assessee's plea for liberal approach was rejected by the CIT(A). In our considered opinion, the assessee's plea of a liberal approach on the facts narrated above deserves to succeed. Accordingly, we direct that the delay be condoned and appeal admitted by Ld.CIT(A). Assessee has pleaded that since identical issue on merits was decided by ITAT, in earlier year this appeal on merits should also be decided in favour of the assessee also. In this regard, we note that after only applying a liberal approach, we have directed that the delay be condoned and appeal admitted by CIT(A), although, nowhere it has been pleaded that delay of 615 days was owing to wrong legal advice. In the interest of justice and fare play, the CIT(A) should have an opportunity to examine the order of AO for this year, in light of the ITAT order for AY 2010-11 and the assessees submission thereon. This is more so when even the AO did not had the ITAT order before him to examine when he framed the assessment order. Accordingly, we remit the appeal on merits to file of Ld.CIT(A) after condoning the delay of 516 days, which was not condoned by the Ld.CIT(A). The additional ground referred by the assessee may also be considered by Ld.CIT(A). Needless to add, in deciding the appeal on merits, the Ld.CIT(A) should grant adequate opportunities of being heard to the assessee. Assessee appeal is stands allowed for statistical purpose.

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Adjudication of the case on merits regarding tax deducted at source.

Issue 1: Condonation of delay in filing appeal

The appeal by the Assessee was against the order of the learned CIT(A)-53 dated 12.04.2019 for Assessment Year 2011-12. The grounds of appeal included the delay in filing the appeal and the failure of the CIT(A) to condone the delay. The Assessee contended that the delay was due to the advice of a counsel regarding similar issues in a previous year. The CIT(A) dismissed the appeal for non-condonation of the 615-day delay, stating that the Assessee was aware of the time limit for filing the appeal. The Tribunal, however, found that the Assessee's plea for a liberal approach deserved to succeed. The delay was condoned, and the appeal was admitted by the Tribunal.

Issue 2: Adjudication of the case on merits regarding tax deducted at source

The Assessee, a Joint Venture engaged in EPC services, received mobilization advance from Chennai Metro Rail Ltd. for which tax was deducted at source. The Assessee claimed full credit for the tax deducted, citing legal precedents and arguing that the advance should not be treated as income received in advance. However, the Assessing Officer rejected the claim, stating that the advance was not a loan but a mobilization advance against contractual obligations. The AO allowed TDS credit based on the revenue recognized in the accounts. The CIT(A) partly adjudicated and dismissed the appeal for non-condonation of delay. The Tribunal remitted the appeal on merits back to the CIT(A) after condoning the delay, directing a thorough examination of the AO's order in light of previous ITAT decisions and the Assessee's submissions. The Assessee's appeal was allowed for statistical purposes.

In conclusion, the Tribunal's judgment addressed the issues of delay in filing the appeal and the adjudication of the case on merits regarding tax deducted at source. The Tribunal found in favor of the Assessee, condoning the delay and remitting the case back to the CIT(A) for a detailed examination on the merits of the tax deducted at source. The legal arguments and precedents cited by the Assessee were considered in the decision-making process, ensuring a fair and just outcome in the matter.