2020 (9) TMI 316 - AT - Income Tax

Condonation of delay - delay in preferring the appeal before tribunal - eligible reasons for delay - HELD THAT - It is not a case of the Revenue that there are any mala fides on the part of the assessee in preferring the appeal with any delay. Obviously, assessee does not stand to gain by preferring the appeal with delay. When the technicalities are pitted against the substantial justice, the former must give way to the latter. There is no reason not to accept the explanation offered by the assessee that it is only due to bona fide mistaken impression the delay occurred in preferring the appeal. Revenue does not plead any rights to have been crystallized due to efflux of time. By condoning the delay, the highest that would happen is that a cause could be decided on merits, which would go in the interest of justice. Delay in preferring the appeal could have been condoned. We, therefore, find it difficult to sustain the impugned order of the Ld. CIT(A). Disallowance of credit of TDS under intimation under section 143(1 ) - no reasons are assigned for a disallowance - HELD THAT - For want of reasons by way of speaking order, not only the assessee does not know the reason for disallowance, but at the same time we are also unable to appreciate the legality otherwise of such an act of disallowance. It is only reasons that infuse life into the action of any public authority, and such reasons allow the higher forums to appreciate the legal sustainability of such an action, without which not only the party affected by such an action suffers, but the higher forums would be handicapped either to confirm or to set it aside. It is, therefore, clear that the impugned action of disallowance of the credit of TDS is unsustainable, in the manner it is presently manifested in the impugned order. Disallowance of credit of TDS under intimation under section 143(1) of the Act suffers legal irregularity and cannot be sustained as it is, it goes without saying that the matter requires reconsideration by the learned Assessing Officer to pass a speaking order with the reasons.

Summary

Issues Involved:
Delay in filing appeal before Ld. CIT(A) | Disallowance of TDS credit without reasons in intimation under section 143(1) of the Act

Delay in filing appeal before Ld. CIT(A):
The appellant, a company, had carried forward TDS amounting to ?1,56,74,596 from the assessment year 2015-16, which was not allowed for the assessment year 2015-16. The appellant filed an appeal before the Ld. CIT(A) for the assessment year 2016-17 with a delay. The Ld. CIT(A) refused to condone the delay, stating that the delayed realization of the need for appeal did not constitute sufficient cause. The appellant argued through its representative that the delay was due to a bona fide mistaken impression and that the delay should be condoned to ensure substantial justice. The Tribunal found that there were no mala fides on the part of the appellant and that condoning the delay would allow the case to be decided on merits, serving the interest of justice. Consequently, the Tribunal held that the delay in filing the appeal should have been condoned, disagreeing with the Ld. CIT(A)'s decision.

Disallowance of TDS credit without reasons in intimation under section 143(1) of the Act:
The appellant contested the disallowance of TDS credit amounting to ?94,64,792 without reasons provided in the intimation under section 143(1) of the Act. The Tribunal observed that the intimation did not offer any reasons for the disallowance and appeared to be a pro forma generated by the Centralized Processing Centre, Bangalore. The absence of reasons not only left the appellant unaware of the basis for the disallowance but also hindered the Tribunal's ability to assess the legality of the action. Emphasizing that reasons are essential to justify actions by public authorities, the Tribunal deemed the disallowance unsustainable in its current form. Consequently, the Tribunal set aside the impugned orders and remanded the issue to the Assessing Officer for reconsideration, directing the issuance of a speaking order with reasons and providing the appellant an opportunity to be heard. Ultimately, the Tribunal allowed the appeal for statistical purposes, highlighting the need for a lawful reconsideration of the disallowance of TDS credit.

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