SPARSH DESIGNS PVT LTD. , MUMBAI V. ITO (TDS) WARD 2(2)(4) , MUMBAI

ITA 1363/MUM/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9493 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 28-02-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR LD
• Assessee Lawyers: PRAKASH JUNJHUNWALA LD
• Keywords: Period of limitation; Time period of passing order; Condonation of delay; TDS
• Section: 234E; 200A

Judgement Text

M/S SPARSH DESIGNS PRIVATE LIMITED ITA NOS.1361 TO 1364/MUM/2020 ASSESSMENT YEARS : 2013-14 TO 2016-17 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.1361 TO 1364/MUM/2020 ( / ASSESSMENT YEARS: 2013-14 TO 2016-17) M/S. SPARSH DESIGNS PRIVATE LIMITED B-1306, OBEROI SPLENDOR JVLR, JOGESHWARI (EAST) MUMBAI 400 060 / VS. ITO - TDS WARD 2(2)(4) AYURVEDIC HOSPITAL BUILDING CHARNI ROAD MUMBAI 400 004. PAN / TAN: AAOCS - 6795 - B / MUMS67917D ( /APPELLANT ) : ( ! / RESPONDENT ) ASSESSEE BY : SHRI PRAKASH JUNJHUNWALA LD. AR REV ENUE BY : SHRI V. VINOD KUMAR-LD. DR / DATE OF HEARING : 18/08/2020 / DATE OF PRONOUNCEMENT : 21/08/2020 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE ASSESSEE HAS COMMON GRIEVANCE IN ALL THE 4 CAPTIONED APPEALS FOR ASSESSMENT YEARS (AY) 2013-14 TO 2016-1 7. THE FACTS ARE PARI-MATERIA THE SAME IN ALL THE APPEALS AND THEREF ORE, THE APPEALS WERE HEARD TOGETHER AND ARE NOW BEING DISPOSED-OFF BY WA Y OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. M/S SPARSH DESIGNS PRIVATE LIMITED ITA NOS.1361 TO 1364/MUM/2020 ASSESSMENT YEARS : 2013-14 TO 2016-17 2 ITA NO.1364/MUM/2020, AY 2013-14 2. THIS APPEAL ASSAILS THE ORDER OF LD. COMMISSIONE R OF INCOME TAX (APPEALS)-60, MUMBAI [CIT(A)], APPEAL NO. CIT(A)-60 /IT- 10052/ACIT(CPC)(TDS)/2015-16 DATED 13/08/2019 ON FO LLOWING GROUNDS: - 1.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. CIT(A) ERRED IN NOT CONDONING THE DELAY IN FILING OF THE 1 ST APPEAL ON IGNORING THE BONAFIDE REASONS AND COMPELLING CIRCUMSTANCES BEYOND CONTROL OF THE APPELLANT AND A PRAYER IS MADE TO CONDONE THE DELAY IN FILING OF TH E 1 ST APPEAL; 2.0 THE LD. CIT(A) ERRED SERIOUSLY IN REJECTING THE APPELLANTS APPLICATION FOR CONDONATION OF DELAY WITHOUT CONSIDERING THE WRITTE N SUBMISSION, SUPPORTING DOCUMENTS AND JUDICIAL DECISIONS FILED BEFORE 1 ST APPELLATE AUTHORITY; 3.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. CIT(A) ERRED IN NOT DELETING THE FEES CHARGED U/S. 234E OF RS.251,073/- FOR DELAY IN FURNISHING THE TDS RETURNS, WITHOUT CONSIDERING THE FACT THAT THE POWERS TO PROCESS THE STATEMENT U/S. 200A(1)(C) TO RECOVER THE FEE U/S. 2 34E IS MADE EFFECTIVE FROM 01/06/2015 AND WOULD NOT APPLY RETROSPECTIVELY; 4.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. CIT(A) OUGHT TO HAVE DELETED THE LATE FEE CHARGED U/S. 234E SINCE AN OPP ORTUNITY OF BEING HEARD HAS NOT BEEN ALLOWED BY LD. TDS OFFICER TO THE APPE LLANT. AS EVIDENT THE ASSESSEE IS AGGRIEVED BY LEVY OF LAT E FEES U/S 234E AND ALSO BY THE FACT THAT LEARNED FIRST APPELLATE AUTHO RITY REFUSED TO CONDONE THE DELAY IN ASSESSEES APPEAL. 3. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS. T HE LD. AR PLEADED FOR CONDONATION OF DELAY AND RESTORATION OF APPEAL TO THE LEARNED FIRST APPELLATE AUTHORITY FOR DISPOSAL ON MERITS. THE LD. DR OPPOSED THE SAME. OUR ADJUDICATION TO THE SUBJECT MATTER OF APP EAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 4.1 FACTS ON RECORD WOULD REVEAL THAT THE ASSESSEE HAS BEEN SADDLED WITH LATE FEES U/S 234E FOR RS.2,51,073/- WHILE PRO CESSING TDS RETURNS OF VARIOUS QUARTERS IN FORM NOS. 24Q AND 26Q. THE QUAR TER-WISE DETAILS M/S SPARSH DESIGNS PRIVATE LIMITED ITA NOS.1361 TO 1364/MUM/2020 ASSESSMENT YEARS : 2013-14 TO 2016-17 3 HAVE ALREADY BEEN TABULATED ON PAGE-2 OF THE IMPUGN ED ORDER. THE SAID FEES HAVE BEEN CHARGED IN VARIOUS ORDERS DATED 11/1 1/2016 PASSED BY TDS-CPC U/S 200A OF THE INCOME TAX ACT, 1961 IN RES PECT OF E-TDS STATEMENTS FILED BY THE ASSESSEE. THE APPEAL WAS IN STITUTED BY THE ASSESSEE ON 27/07/2018 AND ACCORDINGLY, IT WAS VIEW ED THAT THE APPEAL WAS FILED BELATEDLY. 4.2 THE ASSESSEE, INTER-ALIA, SUBMITTED THAT THE AFORESAID STATEMENTS (DEFAULT SUMMARY) U/S 200A WERE SERVED TO THE ASSES SEE ONLY ON 27/06/2018 AND ACCORDINGLY, THE APPEAL WAS FILED WI THIN STIPULATED PERIOD OF 30 DAYS AS PRESCRIBED U/S 249(2). ALTERNATIVELY, THE ASSESSEE PLEADED FOR CONDONATION OF DELAY ON ACCOUNT OF ADVERSE MEDI CAL AS WELL FINANCIAL CONDITIONS BEING FACED BY THE DIRECTOR OF THE ASSES SEE ENTITY. IT WAS SUBMITTED THAT THERE WAS NO NEGLIGENCE OR DELIBERAT E ATTEMPT TO DELAY THE FILING OF THE APPEAL. THE ASSESSEE ALSO ASSAILED TH E LEVY OF FEES ON MERITS. 4.3 HOWEVER, LD. CIT(A) REJECTING THE STAND OF ASSE SSEE, NOTED THAT THE REGULAR STATEMENT WAS PROCESSED ON 28/12/2013 AND T HERE WAS CONSIDERABLE DELAY IN FILING OF THE APPEAL. THE ASS ESSEE COULD NOT ESTABLISH SUFFICIENT CAUSE OF LATE FILING OF APPEAL IN TERMS OF SECTION 249(3) OF THE ACT AND THEREFORE THE DELAY WAS NOT T O BE CONDONED. FINALLY THE APPEAL WAS DISMISSED ON TECHNICAL GROUND OF DEL AY. AGGRIEVED AS AFORESAID, THE ASSESSEE IS UNDER FURTHER APPEAL BEF ORE US. 4.4 THE LD. AR REITERATED THE SUBMISSIONS MADE BY T HE ASSESSEE BEFORE LD. CIT(A) TO SUPPORT THE STAND OF CONDONATI ON OF DELAY. OUR ATTENTION HAS BEEN DRAWN TO THE FACT THAT THE ASSES SEES BUSINESS WAS M/S SPARSH DESIGNS PRIVATE LIMITED ITA NOS.1361 TO 1364/MUM/2020 ASSESSMENT YEARS : 2013-14 TO 2016-17 4 SITUATED IN NEPAL AND THE SAME WAS CLOSED DOWN IN D EVASTATING EARTHQUAKE IN NEPAL ON 25/04/2015. THE SITUATION CA USED FINANCIAL TROUBLE TO THE DIRECTORS OF THE ASSESSEE WHO WERE F ORCED TO SELL THEIR RESIDENTIAL HOUSE AND HAD TO SHIFT TO RENTED ACCOMM ODATION. DUE TO SHIFTING OF PREMISES, THE STATEMENTS REMAINED UNSER VED. IT WAS ALSO SUBMITTED THAT THE COPIES OF TDS STATEMENTS U/S 200 A WERE PROVIDED TO THE ASSESSEE ONLY ON 27/06/2018 AND THEREFORE, THE LIMITATION PERIOD WAS TO BE COUNTED FROM THE DATE OF EFFECTIVE KNOWLEDGE. AN AFFIDAVIT OF ASSESSEES DIRECTOR, SHRI PRATEEK JAIN, AFFIRMING T HE SAID FACTS HAS BEEN PLACED ON RECORD. A COPY OF EMAIL DATED 27/06/2018 FROM ITO-TDS HAS BEEN PLACED ON RECORD TO SUPPORT THE SUBMISSIONS TH AT SCREEN PRINTS OF INTIMATION DELIVERY WERE FORWARDED TO THE ASSESSEE ONLY ON THAT DATE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL ARGUMENTS AS WELL AS MATERIAL PLACED BEFORE. KEEPING IN VIEW THE ADVERSE BUSINESS / FINANCIAL AS WELL AS MEDICAL CONDITIONS BEING FACED BY THE DI RECTOR OF THE ASSESSEE ENTITY, WE ARE OF THE CONSIDERED OPINION THAT THE D ELAY WAS TO BE CONDONED. THE FACTUAL MATRIX PLACED BEFORE US COULD EXPLAIN THE NON- RECEIPT OF STATEMENTS U/S 200A BY THE ASSESSEE. WHI LE DOING SO, WE ARE GUIDED BY THE FOLLOWING PRINCIPLES LAID DOWN BY HON BLE SUPREME COURT REGARDING CONDONATION OF DELAY IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. KATIJI [167 ITR 471 (SC)] : - 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEA TED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUS E WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY, EVERY S ECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMON-SENSE PRAGMATI C MANNER. M/S SPARSH DESIGNS PRIVATE LIMITED ITA NOS.1361 TO 1364/MUM/2020 ASSESSMENT YEARS : 2013-14 TO 2016-17 5 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT, HE RUNS A SERIOUS R ISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. WE ARE UNABLE TO FIND ANY DELIBERATE NEGLIGENCE OR MALICIOUS INTENT ON THE PART OF THE ASSESSEE IN FILING OF THE APPEAL. W HEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EAC H OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR TH E OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON- DELIBERATE DELAY. KEEPING IN MIND THE AFORESAID PRI NCIPLES, THE BENCH FORMED AN OPINION THAT THE DELAY WAS TO BE CONDONED AND THE APPEAL WAS TO BE RESTORED BACK TO THE FILE OF LEARNED CIT( A) FOR DISPOSAL ON MERITS. WE ORDER SO. RESULTANTLY, THE APPEAL STANDS PARTLY ALLOWED TO THAT EXTENT. ITA NOS.1361 TO 1363 /MUM/2020, AYS 2014-15 TO 2016 -17 6. FACTS ARE PARI-MATERIA THE SAME IN ALL THESE 3 Y EARS. THE ASSESSEE HAS BEEN SADDLED WITH LATE FILING FEES U/S 234E WHI CH WAS ASSAILED BEFORE LEARNED FIRST APPELLATE AUTHORITY. THE LD. C IT(A), ON SIMILAR LOGIC AS WELL AS REASONING, DISMISSED ALL THE APPEALS PRI MARILY ON TECHNICAL GROUND OF LIMITATION. AGGRIEVED THE ASSESSEE IS IN FURTHER APPEAL BEFORE US WITH SIMILAR GROUNDS. 7. FACTS IN ALL THE 3 APPEALS BEING PARI-MATERIA TH E SAME AS IN AY 2013-14, OUR ADJUDICATION AS WELL AS DIRECTIONS GIV EN THEREIN SHALL M/S SPARSH DESIGNS PRIVATE LIMITED ITA NOS.1361 TO 1364/MUM/2020 ASSESSMENT YEARS : 2013-14 TO 2016-17 6 MUTATIS-MUTANDIS, APPLY TO ALL THESE 3 APPEALS ALSO. RESULTANTLY, ALL THE APPEAL STANDS PARTLY ALLOWED TO THAT EXTENT. CONCLUSION 8. ALL THE APPEALS STAND PARTLY ALLOWED IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED ON 21 ST AUGUST,2020. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/08/2020 SR.PS, JAISY VARGHESE !'# $ %! $ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT 3. ' ( ) / THE CIT(A) 4. ' / CIT CONCERNED 5. () # * , * , / DR, ITAT, MUMBAI 6. )+,- / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.