2023 (8) TMI 1189 - AT - Income Tax

Condonation of delay - delay of 988 days in the filing of the appeal - validity of Order passed u/s 201(1)/(1A) - period of limitation - HELD THAT - The case of the assessee-branches is that they received notice individually about the default in compliance but were not technically equipped to handle the issue. Some branches appointed consultants at individual level who also kept on changing. Thereafter the Zonal office of Bank of India Nagpur took up the matter for all the branches of Nagpur zone by appointing a centralized consultant who filed the appeals for all the branches in coordination with income-tax department and addressed all the pending disputes anent to this issue. The delay in presenting the appeals was neither deliberate nor an act of negligence but was caused by genuine difficulty and inability to act promptly at branch level due to reasons adduced above. Ex consequenti we hold that there was a reasonable and sufficient cause for the delay in presenting the appeals before the ld. CIT(A). We therefore condone the delay. Limit limit to pass order u/s. 201(1)/201(1A) - default for non-deduction of tax at source u/s 194A on interest paid/credited to its customers - HELD THAT - As the time limit for the passing of the order u/s. 201(1)/201(1A) for the financial years under consideration came to an end on 31-3-2013 and 31-03-2014. The amendment by the Finance (No.2) Act 2014 came into force on 01-10-2014. This shows that on 01-10-2014 the time limit for passing the order u/s. 201(1)/201(1A) had already expired qua the financial years 2009-10 and 2010-11. A subsequent amendment to the provision cannot give a new lease of life to the time limit which has already exhausted. Hence for the years under consideration it is only the sub-section (3) as amended by Finance Act 2012 with retrospective effect from 01-04-2010 which shall prevail. Resultantly the orders passed by the AO beyond the stipulated time limit are time barred and hence quashed. In the absence of the existence of any valid orders u/s. 201(1)/201(1A) the proceedings flowing therefrom also get annulled. We therefore overturn the impugned orders holding the assessees to be in default in terms of section 201 of the Act. Assessee appeal allowed.

Summary

Issues involved:
The judgment involves the delay in filing appeals, non-condonation of delay by the CIT(A), and the limitation issue concerning orders passed by the AO under section 201(1)/(1A) of the Income-tax Act, 1961.

Delay in filing appeals:
The appeals were delayed by 99 days, and condonation applications were filed. The Tribunal was satisfied with the reasons provided and hence condoned the delay, admitting the appeals for disposal.

Non-condonation of delay by CIT(A):
The primary issue raised was the non-condonation of delay by the CIT(A) in presenting the appeals. The delay ranged from 688 to 988 days in filing the appeals, and the CIT(A) did not condone the delay. The assessee argued that the delay was due to genuine difficulties and inability to act promptly at the branch level. The Tribunal found reasonable cause for the delay and hence condoned it.

Limitation issue:
The Tribunal considered the limitation issue concerning orders passed by the AO under section 201(1)/(1A) of the Act. The AO treated the assessee in default for non-deduction of tax at source under section 194A. The CIT(A) held that the orders were within the time limit as per section 201(3)(ii) of the Act, which the Tribunal disagreed with. The Tribunal analyzed the provisions and concluded that the orders were time-barred and quashed them. Consequently, the proceedings stemming from those orders were annulled, and the appeals were allowed.