2023 (11) TMI 189 - AT - Income Tax

Condonation of inordinate delay - delay ranges between 2175 days to 3300 days which roughly translates into 6 to 9 years - Levy of fees u/s 234E on late filing of quarterly TDS returns in Form No.24Q / 26Q - AR has submitted that the assessee is serving in the remote areas AND continuous changes in branch managers and concerned persons who were responsible for filing TDS returns. Due to amalgamation of various banks with assessee bank, it became difficult for head office of Bank to compile all previous data related to TDS returns - AR further submitted that no appeals were preferred against original intimation orders since there was lack of clarity on the issue of levy of late fees u/s 234E. The assessee was informed by its consultants that the levy of late fee u/s 234E was already being challenged in the judicial forums and Bank decided to wait for the outcome of the judicial proceedings HELD THAT - Though there was inordinate delay in filing the appeal, the assessee could not adduce sufficient or reasonable cause to justify the inordinate delay. As noted by Ld. CIT(A), the assessee is a regional rural bank and assisted by qualified professionals who simply ignored the statutory notices / orders issued by assessing officer and also various limitations given in the Act for the purpose of filing appeal. The conduct of the assessee shows gross negligence which does not justify the condonation of delay. The various case laws as enumerated by CIT(A) supports this reasoning. It could thus be seen that Ld. CIT(A), in a very detailed manner, considered the condonation plea of the assessee and arrived at a conclusion that there was no reasonable or justifiable cause with the assessee in filing the appeals with such an inordinate delay. Reasons and arguments are very general in nature. Difficulty in compliance or change in concerned offices / professional or the fact that the TIN facilitation centre was far-off could not be a reasonable cause to justify such an inordinate delay. The plea that the assessee was waiting for the outcome of judicial decisions also does not impress us since the assessee s grievance could be redressed only by filing an appeal by the assessee only. Even today, there are divergent views of various High Courts on impugned issue and this issue is yet to be settled by Hon ble Apex Court. The assessee is a regional rural bank and surely assisted by qualified professionals and therefore, we are unable to accept all these arguments of Ld. AR. Thus we confirm the action of Ld. CIT(A) in dismissing the appeals of the assessee for want of condonation of inordinate delay.

Issues Involved:
1. Request for condonation of delay in filing of appeal before CIT(A).
2. Applicability of Section 200A(1)(c) of the IT Act w.e.f. 01.06.2015.
3. Prospective effect of Section 200A(1)(c) read with Section 234E.
4. Judicial precedents supporting the assessee's case.
5. ITAT case laws supporting the assessee's case.

Summary:

Issue 1: Request for Condonation of Delay in Filing of Appeal Before CIT(A)

The appellant's primary grievance was the rejection of their appeal by CIT(A) due to the delay in filing, which was not condoned. The appellant argued that the delay was not deliberate, citing various judicial precedents for condonation of delay. The Ld. AR contended that the delay was due to the unsettled nature of the law at the time and logistical issues within the bank. However, the CIT(A) found no "sufficient cause" for the delay, noting that the appellant, a regional rural bank assisted by qualified professionals, showed gross negligence by ignoring statutory notices and deadlines. The delay ranged from 2175 to 3300 days, translating to 6 to 9 years, which was deemed inordinate and unjustifiable.

Issue 2: Applicability of Section 200A(1)(c) of the IT Act w.e.f. 01.06.2015

The appellant argued that the TDS-CPC was empowered to levy late fees under Section 234E only for statements filed on or after 01.06.2015, and hence, intimations for statements filed before this date should be quashed. The CIT(A), however, upheld the levy of fees, noting that the appellant failed to file appeals within the statutory time frame, and the delay was not attributable to the COVID-19 pandemic as claimed.

Issue 3: Prospective Effect of Section 200A(1)(c) Read with Section 234E

The appellant contended that the amendment to Section 200A effective from 01.06.2015 should apply prospectively, and fees for late filing of TDS returns for periods before this date should be quashed. The CIT(A) dismissed this argument, emphasizing that the appellant did not demonstrate sufficient cause for the inordinate delay in filing the appeal.

Issue 4: Judicial Precedents Supporting the Assessee's Case

The appellant cited favorable judgments from the Karnataka and Kerala High Courts, which held that the amendment to Section 200A was effective only from 01.06.2015, and late filing fees under Section 234E could not be levied for periods prior to this date. They also referenced the Supreme Court's ruling in CIT vs. Vegetable Products Ltd. and CIT vs. Vatika Township P. Ltd., advocating for a decision in favor of the assessee in case of divergent opinions among High Courts. The CIT(A) noted these precedents but found them inapplicable due to the appellant's failure to file timely appeals.

Issue 5: ITAT Case Laws Supporting the Assessee's Case

The appellant relied on various ITAT judgments that deemed the intimation for late filing fees under Section 234E before 01.07.2015 as illegal and invalid. However, the CIT(A) distinguished these cases, noting that they did not address the issue of condonation of inordinate delay in filing appeals. The CIT(A) emphasized that the appellant's conduct showed gross negligence and did not justify condonation of delay.

Conclusion:

The Tribunal upheld the CIT(A)'s decision, noting that the appellant failed to provide a reasonable cause for the inordinate delay in filing the appeals. The appeals were dismissed for want of condonation of delay, with the Tribunal confirming the CIT(A)'s detailed reasoning and rejection of the appellant's arguments. The order was pronounced in open court on 17th October 2023.

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