The Finance Officer, Shimoga V. ITO, Davangere

ITA 1287/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7654 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-08-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 30-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH
• Assessee Lawyers: V SRINIVASAN
• Keywords: Reasonable cause; Condonation of delay
• Section: 201(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE S HRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER I.T . A. NO S . 1287 TO 1289 /BANG/20 16 (ASSESSMENT YEAR : 20 07 - 08, 1008 - 09 & 2011 - 12 ) THE FINANCE OFFICER, KUVEMPU UNIVERSITY, SHANKARAGHATTA, SHIMOGA DISTRICT. . APPELLANT. VS. INCOME TAX OFFICER, TDS WARD, DAVANGERE . .. RESPONDENT. APPELLANT BY : S HRI V. SRINIVASAN, ADVOCATE. R E SPONDENT BY : SHRI B. R. RAMESH, JCIT (D.R) DATE OF H EARING : 8.8.2017. DATE OF P RONOUNCEMENT : 31 .0 8 .201 7 . O R D E R PER SHRI VIJAY P AL RAO, J .M . : TH ESE THREE APPEAL S BY THE ASSESSEE ARE DIRECTED AGAINST THE COMPOSITE ORDER DT. 31.03.2016 OF COMMI SSIONER OF INCOME TAX (APPEALS) , DAVANGE RE FOR THE ASSESSMENT YEAR S 20 07 - 08, 1008 - 09 & 2011 - 12. 2 IT A NO S . 1287 TO 1289 /BANG/20 16 2. THE ASSESSEE HAS RAISED COMMON GROUNDS IN THESE APPEALS. THE GROUNDS RAISED FOR THE ASSESSMENT YEAR 2007 - 08 ARE REPRODUCED AS UNDER : 3 IT A NO S . 1287 TO 1289 /BANG/20 16 3. THE ASSESSEE IS A PUBLIC STATE UNIVERSITY OFFERING UNDER GRADUATE , GRADUATE & POST GRADUATE DEGREE PROGRAMMES. THE ASSESSING OFFICER CARRIED OUT SPOT VERIFICATION AT THE PREMISES OF THE ASSESSEE TO VERIFY THE APPLICABILITY OF PROVISIONS OF TDS AND COMPLIANCE THEREON. UPON VERIFICATION IT WAS FOUND THAT THE ASSESSEE HAD MADE PAYMENT TOWARDS LEGAL CHARGES WITHOUT DEDUCTING TAX AT SOURCE. THE ASSESSING OFFICER 4 IT A NO S . 1287 TO 1289 /BANG/20 16 ACCORDINGLY INITIATED THE PROCEEDINGS UNDER SECTIONS 201(1) & 201(1A) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') AND HELD THE ASSESSEE TO BE THE ASSESSEE IN DEFAULT TO THE EXTENT OF TAX DEDUCTION VIDE ORDER DT.13.06.2011. THE ASSESSEE CHALLENGED THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTIONS 201(1) & 201(1A) OF THE ACT BY FILING THE APPEAL BEFORE THE CIT (APPEALS) ON 8.3.2012. SINCE THE APPEALS WE RE FILED BELATEDLY AND THERE WAS A DELAY OF 235 DAYS THEREFORE, T HE ASSESSEE SOUGHT CONDONATION OF DELAY AND EXPLAINED THE CAUSE OF DELAY BY CITING VARIOUS ADMINISTRATIVE REASONS AS WELL AS NOT HAVING THE PAN WHICH WAS APPLIED SUBSEQUENT TO THE ORDER PASSE D BY THE ASSESSING OFFICER. THE CIT (APPEALS) WAS NOT CONVINCED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE REGARDING THE CAUSE OF DELAY OF 235 DAYS AND ACCORDINGLY THE APPEALS OF THE ASSESSEE WERE DISMISSED IN LIMINE BEING BARRED BY LIMITATION. 4. BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS A PUBLIC STATE UNIVERSITY AND WAS NOT HAVING ANY PAN BUT APPLIED ON 28.12.2011. HE HAS REFERRED TO THE EXPLANATION FURNISHED BY THE ASSESSEE FOR CONDONATIO N OF DELAY AS REPRODUCED BY THE CIT (APPEALS) IN PARA 6 OF THE IMPUGNED ORDER AND 5 IT A NO S . 1287 TO 1289 /BANG/20 16 SUBMITTED THAT AFTER THE ORDER PASSED UNDER SECTIONS 201(1) & 201(1A) OF THE ACT THE ASSESSEE SOUGHT NECESSARY APPROVAL OF THE SYNDICATE TO SEEK LEGAL REMEDIAL ACTION BY WAY OF APPEAL AND APPOINTMENT OF A LEGAL COUNSEL TO ADVISE IN THE MATTER. THEREAFTER THE ASSESSEE APPOINTED SRI N.L. PRASAD, CA TO LOOK INTO THE MATTER AND TO ADVISE THE ASSESSEE FOR LEGAL REMEDY AVAILABLE. IT WAS FURTHER EXPLAINED THAT THE ENTIRE ACCOUNT S DEPARTMENT EXCEPT A FEW PERSONS WERE DEPUTED TO DIFFERENT PARTS OF KARNATAKA ON EXAMINATION DUTY AND THEREFORE THE REQUIRED INFORMATION WAS NOT READILY AVAILABLE AND COULD BE GIVEN TO THE CA . O NLY DURING THE MONTH OF NOV., 2011 AFTER GOING THROUGH THE P APERS, THE TAX ADVISER HAS GIVEN THE OPINION FOR FILING THE APPEAL AGAINST THE ORDER PASSED UNDER SECTIONS 201(1) & 201(1A) OF THE ACT. THUS AFTER TAKING THE NECESSARY APPROVAL OF FINANCE DEPARTMENT, THE ASSESSEE DECIDED TO FILE THESE APPEALS HOWEVER FOR T HE PURPOSE OF FILING THIS APPEAL, THE INSTITUTION FEES OF RS.1,000 WAS REQUIRED TO BE PAID. THE ASSESSEE APPROACHED THE BANKER FOR PAYMENT OF APPEAL FEES BUT WAS TOLD BY THE BANKER THAT WITHOUT PAN THEY CANNOT ACCEPT THE PAYMENT. THE LEARNED AUTHORISED R EPRESENTATIVE HAS THUS SUBMITTED THAT ALL THIS PROCEDURE HAS RESULTED THE DELAY IN FILING THE APPEAL BEFORE THE CIT (APPEALS) AND THEREFORE THE DELAY WAS NEITHER 6 IT A NO S . 1287 TO 1289 /BANG/20 16 INTENTIONAL NOR WILLFUL BUT DUE TO THE UNAVOIDABLE REASON BEYOND THE CONTROL OF THE ASSESSEE. THE CIT (APPEALS) REJECTED THE APPLICATION FOR CONDONATION OF DELAY WITHOUT APPRECIATING THE EXPLANATION GIVEN BY THE ASSESSEE WHEREIN THE ASSESSEE HAS EXPLAINED SUFFICIENT CAUSE. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS RELIED UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ISRO SATELLITE CENTRE 218 TAXMANN 74 (KAR) AND SUBMITTED THAT THE HON'BLE HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL CONDONING THE DELAY OF FIVE YEARS. 5. ON THE OTHER HAND, T HE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE LAPSE ON THE PART OF THE ASSESSEE TO TAKE NECESSARY DECISION FOR CHALLENGING THE ORDER PASSED BY THE ASSESSING OFFICER CANNOT BE CONSIDERED AS A REASONABLE CAUSE OF DELAY IN FILING THE APPEALS. THE ASSESSEE HAS EXPLAINED THE DELAY ON ACCOUNT OF ADMINISTRATIVE REASON WHICH CANNOT BE CONSIDERED AS A REASONABLE CAUSE FOR CONDONATION OF DELAY. THE ASSESSEE HAS GIVEN THE REASON THAT IT TOOK TIME FOR APPROVAL OF SYNDICATE AS WELL AS APPROVAL OF FINAN CE DEPARTMENT FOR TAKING A DECISION TO CHALLENGE THE ORDER BY FILING THE APPEALS WHICH IS INTERNAL ADMINISTRATIVE MATTER AND NO EXTERNAL FORCE OR CIRCUMSTANCES HAS CAUSED 7 IT A NO S . 1287 TO 1289 /BANG/20 16 ANY DELAY IN FILING THE APPEALS BEFORE THE CIT (APPEALS). THUS THE LEARNED DEPARTME NTAL REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE REASONABLE CAUSE OR SUFFICIENT CAUSE OF DELAY IN FILING THE APPEALS. HE HAS RELIED UPON THE IMPUGNED ORDER OF THE CIT (APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS GIVEN THE EXPLANATION OF CAUSE OF DELAY WHICH HAS BEEN REPRODUCED BY THE CIT (APPEALS) IN THE IMPUGNED ORDER. THE CIT (APPEALS) WAS NOT SATISFIED WITH THE EXPLANATION HOWEVER NEITHER THE CIT (APPEALS) NO R THE DEPARTMENT HAS CONTROVERTED THE FACTS AS EXPLAINED BY THE ASSESSEE FOR CAUSE OF DELAY IN FILING THE APPEALS BEFORE THE CIT (APPEALS). UNDISPUTEDLY, THE ASSESSEE IS A PUBLIC STATE UNIVERSITY OFFERING UNDERGRADUATE, GRADUATE AND POST GRADUATE DEGREE P ROGRAMMES. THERE IS ADMINISTRATIVE HIERARCHY MANAGING THE AFFAIRS OF THE ASSESSEE - UNIVERSITY. THEREFORE FOR TAKING ANY DECISION , AS NOT IN THE CASE OF INDIVIDUAL , THERE IS A PROCESS FOR APPROVALS FROM THE APPROPRIATE AUTHORITIES IN THE ADMINISTRATION. THIS IS NOT A CASE ARISING FROM REGULAR ASSESSMENT BUT THE ASSESSING OFFICER HAS PASSED THE ORDER UNDER SECTION 201(1) & 201(1A) OF THE ACT HOLDING THE ASSESSEE AS ASSESSEE IN DEFAULT DUE TO NON - DEDUCTION OF TAX IN RESPECT OF CERTAIN PAYMENTS MADE BY THE 8 IT A NO S . 1287 TO 1289 /BANG/20 16 ASSESSEE TOWARDS LEGAL FEES. THE ASSESSEE HAS CONTENDED BEFORE THE CIT (APPEALS) THAT RECIPIENT OF THE FEES HAS OFFERED THE SAME TO TAX AND THEREFORE THE ASSESSEE CANNOT BE HELD AS ASSESSEE IN DEFAULT. THE CIT (APPEALS) WITHOUT GOING INTO THE MERIT OF TH E CASE DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE BY DECLINING THE CONDONATION OF DELAY OF 235 DAYS. IT IS SETTLED PROPOSITION OF LAW THAT WHILE CONSTRUING THE SUFFICIENT CAUSE THE COURT SHOULD BE LIBERAL AND LEAN IN FAVOUR OF SUCH PARTY IF IT IS BROU GHT ON RECORD THAT THE PARTIES HAS NOT ACTED IN ANY MALA FIDE BUT THE REASONS EXPLAINED ARE FACTUALLY CORRECT. IT IS ALWAYS A QUESTION WHETHER THE EXPLANATION AND REASON FOR DELAY W A S BONA FIDE OR MERELY A DEVICE TO COVER T HE ULTERIOR PURPOSE OR AN ATTEMPT TO SAVE THE LIMITATION IN AN UNDER HAND WAY. IN THE CASE OF THE ASSESSEE THE FACTS EXPLAINED BY THE ASSESSEE BEING THE REASONS FOR DELAY HAVE NOT BEEN DISPUTED BY THE DEPARTMENT HOWEVER THE CIT (APPEALS) FOUND THE SAME AS NOT SUFFICIENT OT SATISFY HIM FO R CONDONING THE DELAY. THEREFORE IT IS MANIFEST FROM THE RECORD THAT THE ASSESSEE HAS NOT ACTED IN MALA FIDE AND THE REASONS EXPLAINED ARE FACTUALLY CORRECT. FURTHER BY FILING THE APPEALS BELATEDLY THE ASSESSEE IS NOT GOING TO ACHIEVE ANY ULTERIOR PURPOS E OR MOTIVE OR OTHER BENEFIT WHEN IT WAS EXPLAINED BY THE ASSESSEE THAT THE RECIPIENT OF 9 IT A NO S . 1287 TO 1289 /BANG/20 16 THE AMOUNT IN QUESTION HAS OFFERED THE SAME FOR TAX. THE HON'BLE SUPREME COURT HAS LAID DOWN THE PRINCIPLE THAT W HENEVER SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERAT IONS ARE OPPOSED TO EACH OTHER THE CAUSE OF SUBSTANTIAL JUSTICE HAS TO BE PREFERRED. THUS IT APPEARS TO BE A CASE OF FACING THE LITIGATION FIRST TIME DUE TO THE ORDER PASSED UNDER SECTION 201(1) & 201(1A) OF THE ACT. THEREFORE IN VIEW OF THE FACTS AND CI RCUMSTANCES OF THE CASE WE ARE SATISFIED THAT THE ASSESSEE HAS EXPLAINED SUFFICIENT CAUSE FOR DELAY IN 235 DAYS IN FILING THE APPEAL BEFORE THE CIT (APPEALS). ACCORDINGLY, WE CONDONE THE DELAY IN FILING THE APPEAL BEFORE THE CIT (APPEALS) AND SET ASIDE TH E MATTER TO THE RECORD OF THE CIT (APPEALS) FOR ADJUDICATION OF THE APPEALS ON MERITS. 7. IN THE RESULT, THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUG., 2017 . SD/ - ( INTURI RAMA RAO ) ACCOUNTANT MEMBER SD/ - ( VIJAY PAL RAO ) JUDICIAL MEMBER BANGALORE, DT. 31 .08.2017. *REDDY GP