2021 (1) TMI 289 - AT - Income Tax

Rectification u/s 254 - Period of limitation - condone delay in filing of miscellaneous petition - TDS u/s 194C - HELD THAT - No power vested with Tribunal to condone delay in filing of miscellaneous petition u/s 254(2) of the 1961 Act. Hence, we are bound by provisions of the 1961 Act and we are afraid that this MA filed by assessee in the instant case is barred by limitation and is to be dismissed on that short ground itself. For the sake of completeness and also that the assessee has invoked cause of substantial justice and that act of court should not prejudice anyone, we are going ahead to see whether even otherwise there is any merit in this MA. As observed that even otherwise, on merits of the miscellaneous petition Tribunal has passed a well-reasoned appellate order dated 08th June 2016 , whereby the Tribunal has elaborately discussed the contentions of the assessee and arrived at well reasoned conclusion/ decision in its appellate order. The assessee has purchased raw material on FOR basis from suppliers namely M/s. Pioneers Wires Private Limited and M/s. Saudagar Mal Mamman Lal Private Limited, and hence accordingly transportation of raw material purchased from the factory of the supplier to the assessee s place of business is obviously liability of the assessee and are to be borne by the assessee. The assessee has itself admittedly and rightly booked transportation/freight charges under the head transportation charges in its books of accounts , instead of debiting the same to purchase of material. Thus, contention of the assessee that said freight /transportation charges are part of purchase cost are devoid of any merit and the tribunal rightly held that assessee was liable to deduct income tax at source u/s 194C of the 1961 Act, which assessee in the instant case failed to do. The tribunal, keeping in view and after considering the amended provisions of Section 40(i)(ia) as amended by Finance Act, 2012, wherein second proviso was inserted, took a well reasoned and conscious decision of setting aside the matter to the file of the AO for verification as to whether the payee of the transportation charges has duly paid income-tax on the said income and to grant relief if the assessee is able to demonstrate that the payee has duly paid income tax on the said receipt. No mistake which is apparent from record in the well-reasoned order passed by the Tribunal and thus both on merits as well as on legal grounds, the contentions of the assessee cannot be accepted and hence this MA stands dismissed.

Issues:
Delay in filing the Miscellaneous Application (MA) beyond the prescribed period of limitation under Section 254(2) of the Income-tax Act, 1961.
Whether the Tribunal has the power to condone the delay in filing the MA.
Merits of the Miscellaneous Application filed seeking rectification of a mistake apparent from the record in the appellate order.
Applicability of the decision in the case of 'Laxmi Electronic Corporation Ltd. v. CIT' and the maxims 'actus curiae neminem gravabit' and 'ex debito justitiae'.
Interpretation of the provisions of the Income Tax Act, 1961 regarding the Tribunal's power to condone delay in filing appeals or memoranda of cross-objections versus miscellaneous petitions for rectification of mistakes.
Analysis of the well-reasoned appellate order dated 08.06.2016 passed by the Tribunal on the merits of the case.
Whether the transportation charges are part of the purchase cost and the liability of the assessee to deduct income tax at source under Section 194C of the 1961 Act.
The decision of the Tribunal to set aside the matter to the file of the Assessing Officer for verification of income tax payment by the payee of transportation charges.

Delay in Filing the Miscellaneous Application:
The MA was filed beyond the six-month limitation period under Section 254(2) of the Income-tax Act, 1961. The Tribunal does not have the power to condone the delay in filing a miscellaneous petition for rectification of mistakes beyond the prescribed time limit, as per the specific provisions of the Act. The decision is supported by the ruling of the Hon'ble Karnataka High Court in the case of 'Karuturi Global Ltd. v. DCIT'.

Merits of the Miscellaneous Application:
On the merits of the case, the Tribunal found no mistake apparent from the record in the well-reasoned appellate order dated 08.06.2016. The Tribunal's decision was based on a detailed analysis of the contentions raised by the assessee regarding the liability to deduct income tax at source under Section 194C of the 1961 Act. The Tribunal upheld that the transportation charges are the liability of the assessee and cannot be considered part of the purchase cost.

Interpretation of Provisions and Legal Grounds:
The Tribunal clarified that while it has the power to condone delay in filing appeals or memoranda of cross-objections under Section 253(5) of the 1961 Act, no such power is granted for miscellaneous petitions under Section 254(2). The Tribunal emphasized that it is bound by the provisions of the Act and cannot go beyond the statutory limitations.

Conclusion:
The MA filed by the assessee was dismissed on the grounds of being time-barred and lacking merit. The Tribunal's decision to dismiss the MA was based on legal grounds and the absence of any mistake apparent from the record in the original appellate order. The Tribunal's order was pronounced on 07/01/2021 at Allahabad through Video Conferencing.

← Previous Next →