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2015 (5) TMI 857 - AT - Income TaxCondonation of delay - Disallowance made u/s40(a)(ia) r.w.s 194C - Charging of interest u/s. 201(1)/(1A) - Held that - In the instant case the assessee society is registered under the Karnataka Co-operative Societies Act 1959. The assessee society s main object is to manufacture of sugars by procuring cane from members and non-members. Thus, the society runs on co-operative basis. The assessee could not obtain the legal advice. Moreover, the assessee s sugar factory was running in loss for so many years. Therefore, the assessee could not file appeal in time before the ld.CIT(A). The assessee has obtained legal opinion from an ex-principal, G.K.Law College, Hubli. The assessee has filed the appeal. The assessee has understood the legal position. We are of the view that the assessee had reasonable cause in not filing the appeal in time before the ld.CIT(A). The appeal may not be decided on technical ground, but it must be decided on merit in the interest of public. We find that the assessee society has huge money of the public. Therefore, in the interest of justice and fair play, we condone the aforesaid delay in filing all the appeals for all the assessment years under consideration and restore the matter to the file of the ld.CIT(A) to decide the appeal on merits after giving the assessee adequate opportunity of hearing. - Decided in favour of assesse for statistical purpose.
Issues Involved:
1. Non-deduction of TDS on payments made by the assessee. 2. Disallowance of expenses under Section 40(a)(ia) of the Income Tax Act. 3. Charging of interest under Section 201(1)/(1A) of the Income Tax Act. 4. Condonation of delay in filing appeals. Detailed Analysis: 1. Non-deduction of TDS on Payments: The assessee, a cooperative society engaged in manufacturing sugar, failed to deduct tax on payments exceeding Rs. 20,000 towards harvesting, transportation, and law and consultancy charges. The Assessing Officer (AO) disallowed these payments under Section 40(a)(ia) of the Income Tax Act for various assessment years (2005-06 to 2012-13). For assessment years 2009-10 to 2012-13, the AO also charged TDS/interest under Section 201(1)/(1A) for payments made without TDS. 2. Disallowance of Expenses under Section 40(a)(ia): The AO disallowed the expenses due to non-deduction of TDS. The disallowance was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)], who did not admit the appeal on the grounds of limitation. The CIT(A) observed that the agreement between the appellant deductor and the harvesting contractor had been acted upon, and the deductor was found to be in default for not deducting TDS on the payments made. 3. Charging of Interest under Section 201(1)/(1A): The AO charged interest under Section 201(1)/(1A) for non-deduction of TDS on various payments, including harvesting, transportation, and commission (incentive) payments. The total demand payable, including interest, was calculated for different assessment years. 4. Condonation of Delay in Filing Appeals: The CIT(A) did not condone the delay in filing the appeals, citing that the appellant failed to establish sufficient cause for the delay. The CIT(A) referenced various judicial precedents, emphasizing that ignorance of law is not a ground for condonation and that the appellant had legal advice available. The CIT(A) concluded that the appellant acted without due diligence and did not provide a valid explanation for the delay. Tribunal's Decision: The Tribunal considered the detailed chart of delays and the reasons provided by the assessee, including obtaining legal advice and financial difficulties. The Tribunal noted that the assessee society operates on a cooperative basis and had reasonable cause for the delay. Emphasizing the need for justice and fair play, the Tribunal condoned the delay in filing the appeals and restored the matter to the CIT(A) for a decision on merits, ensuring adequate opportunity for the assessee to be heard. Conclusion: The appeals were allowed for statistical purposes, and the CIT(A) was directed to decide the appeals on merits after giving the assessee an opportunity of hearing. The decision was pronounced in open court on 22.1.2015.
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