2024 (7) TMI 342 - AT - Income Tax

Condonation delay filling appeal before CIT(A) - Delay of about 1000 to 2000 days - HELD THAT - As decided in case of People Education Economic Development Society 2006 (1) TMI 215 - ITAT MADRAS-C when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay. Whether delay was excessive or inordinate? - There is no question of any excessive or inordinate when the reason stated by the assessee was a reasonable cause for not able to file the appeals within the period of limitation. The cause for the delay therefore deserves to be considered, when there exist a reasonable cause, and therefore the period of delay may not be relevant factor. We rely on the decision of K.S.P. Shanmugavel Nadai and Ors. ( 1984 (4) TMI 24 - MADRAS HIGH COURT considered the condonation of delay and held that there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Hon'ble Madras High Court thus condoned nearly 21 years of delay in filing the appeal. As compared to 21 years, delay of about 1000 to 2000 days cannot be considered to be inordinate or excessive. TDS u/s 194C - payments made as set out in the assessment orders and picked out from the Receipt Payment account of the assessee - assessee is a Gram Panchayat (Town Municipal Corporation), a State Govt. Organization, carrying out the main functions of Government Schemes like Ashraya Scheme, Indira Awas Yojana, etc. - AR submitted that some of these payments are not covered by provisions of section 194C and the amount considered by the AO is the year ending figure - HELD THAT - AO has computed TDS u/s. 194C on the year end figure from Receipt Payment account of assessee which is not correct. He should have examined each and every payment whether it is covered under TDS provisions or not. In the interest of justice, we remit the common issue in both the appeals to the AO for fresh consideration and decision as per law. The assessee is directed to update its email id, communication address and other details and file necessary documents that would be essential and required for substantiating its case and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency. Appeals by the assessee are allowed for statistical purposes.

Summary

Issues:
Non-condonation of delay in filing appeals before CIT(Appeals) by the assessee for AYs 2009-10 & 2011-12.

Analysis:
The appeals were filed by the assessee against the common order of the CIT(Appeals) for non-condonation of delay in filing the appeals and subsequent dismissal. The survey conducted revealed non-deduction of TDS by the assessee, resulting in tax and interest liabilities. The CIT(Appeals) did not condone the delay of over 5.4 years and 3.4 years in both appeals, citing lack of due diligence in explaining the delay. The assessee argued remote location, lack of professional advice, and staff shortage as reasons for delay. The Department contended that being a State Govt. department, awareness of Rules & Regulations is mandatory, and negligence was evident.

The Tribunal noted that the delay was not condoned by the CIT(Appeals) due to the absence of a reasonable cause by the assessee. Citing legal precedents, the Tribunal emphasized the importance of substantial justice over technical considerations in condoning delays. It highlighted the need to consider reasonable causes for delay rather than focusing solely on the duration of delay. Legal judgments were referenced to support the liberal construction of "sufficient cause" for condonation of delay in the interest of substantial justice.

Referring to various legal precedents, the Tribunal concluded that there existed a sufficient cause for the delay in filing the appeals. The Tribunal also observed discrepancies in the computation of TDS by the AO and directed a fresh consideration of the issue. The assessee was instructed to update necessary details, cooperate with proceedings, and warned against further defaults. Ultimately, the appeals by the assessee were allowed for statistical purposes, emphasizing the importance of due process and substantial justice in tax matters.

The judgment showcases the balance between technicalities and substantial justice in tax appeal matters, emphasizing the need for a pragmatic approach in condoning delays and ensuring proper adjudication based on legal principles and factual considerations.