2018 (9) TMI 1010 - AT - Income Tax

Condonation of delay - Default u/s 201(1)/201(1A) - application u/s 154 seeking rectification in the orders passed under section 201(1)/201(1A) - Held that - It is admitted fact that the delay in filing the appeal after the application under section 154 was disposed off was 87 days which is not an abnormal or inordinate delay and even otherwise in the facts and circumstances of the case when the issue is not a direct tax liability of the assessee but the assessee was held as assessee in default which is vicarious liability for non deduction of tax and dependent on the fact whether recipient of the amount has already considered the same in the total income offered to tax or the income of the recipient was at all liable to tax. The appeal was not filed electronically but manually is only a defect in the appeal filed by the assessee which was subsequently removed by the assessee by filing the appeal electronically and, therefore, once the defect was removed by the assessee then the appeal filed manually would be considered as date of filing of the appeal. Hence in the facts and circumstances of the case, we condone the delay in filing the appeals before the ld. CIT (A). - Appeals of the assessee are allowed for statistical purposes.

Summary

Issues:
Delay in filing appeals before the ld. CIT (A) for assessment years 2009-10 to 2015-16 due to wrong advice given by Counsel and subsequent rejection of application under section 154 by AO.

Analysis:
The appeals by the assessee were directed against orders of ld. CIT (A) for assessment years 2009-10 to 2015-16 under section 201(1) / 201(1A) of the IT Act. The assessee, a University, faced action for not deducting TDS on pension payments. The AO passed orders holding the assessee as assessee in default. The assessee filed applications under section 154 seeking rectification, which were rejected by the AO. Subsequently, the appeals were filed with a delay of 87 days after the order under section 154. The delay was attributed to wrong advice from Counsel. The ld. CIT (A) dismissed the appeals as barred by limitation.

The assessee contended that the delay was not intentional but due to Counsel's advice. The delay after the order under section 154 was explained, and it was argued that the delay should be condoned for a fair hearing on merits. The Counsel referred to a High Court judgment in the assessee's favor regarding tax liability before the University's incorporation date.

The ld. CIT (A) rejected the condonation of delay application citing manual filing delays and lack of genuine cause. However, the delay of 87 days was not abnormal, especially considering the nature of the issue as vicarious liability. The appeals were initially filed manually but later electronically, rectifying the procedural defect. Consequently, the delay in filing appeals was condoned, and the matter was remanded for adjudication on merits by the ld. CIT (A).

The Tribunal found that the delay was not deliberate and that the reasons were genuine. The appeals were allowed for statistical purposes, emphasizing a liberal approach in condoning delays when factual correctness is established. The decision was pronounced on 04/09/2018.