M/s APMG India Certifications Pvt Ltd, Bangalore V. Deputy Commissioner of Income Tax TDS, Bengaluru

ITA 3143/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2250 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 26-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K N DHANDA
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause; Tax effect; Condonation of delay; TDS
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 3143 /BANG/201 8 ASSESSMENT YEAR : 201 3 - 1 4 M/S. APMG INDIA CERTIFICATIONS PRIVATE LIMITED, REGUS BUSINESS CENTRE, E-1, GROUND FLOOR, BEECH, MANYATA EMBASSY BUSINESS PARK, OUTER RING ROAD, NAGAWARA, BANGALORE 560 045. PAN: AAICA5537D VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRALIZED PROCESSING CELL-TDS, GHAZIABAD. APPELLANT RESPONDENT ASSESSEE BY : SHRI DEEPAK CHOPRA, CA RE VENUE BY : SHRI K.N. DHANDAPANI, JCIT (DR) DATE OF HEARING : 1 2 .0 6 .201 9 DATE OF PRONOUNCEMENT : 21 .0 6 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-3, BANGALORE DATED 03.10.2018 FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE IMPUGNED INTIMATION BEING BAD IN LAW WITHOUT JURISDICTION AND NOT IN ACCORDANCE WITH ANY OF THE PROVISION OF LAW IS LIABLE TO BE QUASHED. [TAX EFFECT OF ABOVE GROUND : RS. 56,200/-] 2. IN ANY CASE AND WITHOUT PREJUDICE, THE LEARNED CIT(A) HAS ERRED IN NOT CONDONING THE DELAY FOR FILING OF APPEAL AND DISMISSING THE APPEAL FILED BY THE APPELLANT HOLDING THAT THE DELAY IS NOTHING BUT NEGLIGENCE AND INACTION OF THE APPELLANT AND THERE EXISTS NO SUFFICIENT OR GOOD REASON FOR CONDONING THE DELAY. ON PROPER APPRECIATION OF FACTS AND THE LAW APPLICABLE, THE APPELLANT WAS PREVENTED FROM REASONABLE AND SUFFICIENT CAUSE FROM FILING THE APPEAL WITH IN PRESCRIBED TIME AND SUCH DELAY IN FILING THE APPEAL OUGHT TO HAVE BEEN CONDONED. [TAX EFFECT OF ABOVE GROUND : RS. 56,200/] 3. IN ANY CASE AND WITHOUT FURTHER PREJUDICE, THE LEVY OF FEE U/S. 234E OF I.T. ACT, 1961 IN IMPUGNED INTIMATION PASSED U/S. 200A OF THE LT. ACT, IS BAD IN LAW IN AS MUCH AS SECTION 200A DID NOT PROVIDE FOR LEVY OF ANY FEE FOR THE RELEVANT ASSESSMENT YEAR AND THEREFORE THE INTIMATION ITA NO. 3143/BANG/2018 PAGE 2 OF 5 IS LIABLE TO BE QUASHED. [TAX EFFECT OF ABOVE GROUND : RS. 56,200/] 4. THE PASSING OF AN INTIMATION DEMANDING PAYMENT OF MONEY IN THE NATURE OF PENALTY WITHOUT ANY NOTICE OR ANY HEARING IS BAD IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE IS BAD IN LAW AND IS LIABLE TO BE QUASHED. [TAX EFFECT OF ABOVE GROUND : RS. 56,200/] 5. EVEN THE INTIMATION DEMANDING FEE IS BARRED BY TIME AND IS LIABLE TO BE QUASHED. [TAX EFFECT OF ABOVE GROUND : RS. 56,200/-] 6. THE APPELLANT DENIES LIABILITY TO PAY ANY FEES. THE LEVY OF FEES BEING BAD IN LAW IS LIABLE TO BE QUASHED. [TAX EFFECT OF ABOVE GROUND : RS. 56,200/-] 7. IN VIEW OF THE ABOVE AND ON OTHER GROUNDS TO BE ADDUCED AT THE TIME OF HEARING, IT IS REQUESTED THAT THE IMPUGNED INTIMATIONS BE QUASHED OR AT LEAST THE APPELLANT BE HELD NOT LIABLE TO PAY THE AMOUNT AS DEMANDED. [CUMULATIVE TAX EFFECT OF ALL GROUNDS: RS. 56,200/-] 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THERE WAS A DELAY OF 895 DAYS IN FILING THE APPEAL BEFORE CIT(A) AND ALTHOUGH THE ASSESSEE HAS SUBMITTED AN APPLICATION FOR CONDONATION OF DELAY, THE LD. CIT(A) HAS NOT CONDONED THE DELAY AND DISMISSED THE APPEAL OF THE ASSESSEE. HE SUBMITTED THAT ON PAGES 41 TO 43 OF PAPER BOOK IS THE COPY OF LETTER DATED 10.09.2018 SUBMITTED BEFORE THE CIT(A) ON 18.09.2018 AND IN THIS LETTER, THE ASSESSEE HAS MADE REQUEST FOR CONDONATION OF DELAY. HE POINTED OUT THAT IN PARA NO. 2 OF THIS LETTER, IT WAS SUBMITTED BY ASSESSEE BEFORE CIT(A) THAT THE ASSESSEE WAS ADVISED BY ITS CONSULTANT TO WAIT FOR THE OUTCOME OF WRIT PETITION BEFORE HON'BLE KARNATAKA HIGH COURT CHALLENGING THE CONSTITUTIONAL VALIDITY OF SECTION 234E. THE ASSESSEE ALSO SUBMITTED THAT IN THE SAME PARA, IT IS ALSO POINTED OUT BY THE ASSESSEE THAT THE ASSESSEE WAS INFORMED BY THE CONSULTANT THAT AGAINST LEVY OF LATE FILING FEE U/S. 234E, THERE WAS NO LEGAL REMEDY AVAILABLE TO THE ASSESSEE AND SINCE, THE ASSESSEE WAS COMPLETELY RELIANT ON THE CONSULTANT FOR ALL TDS RELATED COMPLIANCE, THE ASSESSEE DID NOT TAKE ANY FURTHER ACTION. IT IS ALSO SUBMITTED IN THE SAME PARA BY ASSESSEE BEFORE CIT(A) THAT SO SUBSTANTIATE THESE FACTS, THE ASSESSEE ENCLOSES COPY OF LETTER FROM THE CONSULTANT CONFIRMING THESE FACTS AND THIS LETTER IS AVAILABLE IN THE PAPER BOOK ALSO ON PAGE NO. 44 OF THE PAPER BOOK. THEREAFTER HE PLACED RELIANCE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF ASHTE LOGISTICS PVT. LTD. VS. PCIT IN ITA NO. 229/MUM/2018 DATED 03.12.2018, COPY AVAILABLE ON PAGES 75 TO 82 ITA NO. 3143/BANG/2018 PAGE 3 OF 5 OF THE PAPER BOOK. HE POINTED OUT THAT PARA NOS. 3 TO 5 OF THIS TRIBUNAL ORDER ARE RELEVANT IN WHICH IT IS NOTED BY THE TRIBUNAL THAT THERE WAS DELAY OF 214 DAYS IN FILING THE APPEAL AND REGARDING REASONABLE CAUSE FOR SUCH DELAY, IT WAS SUBMITTED BY THE ASSESSEE IN THAT CASE THAT THE ASSESSEE WAS ADVISED THAT NO APPEAL CAN BE FILED AGAINST ORDER U/S. 263 AND SUBSEQUENTLY, THE ASSESSEE WAS ADVISED BY ANOTHER ADVISER THAT THE APPEAL SHOULD BE FILED AGAINST ORDER U/S. 263 AND UNDER THESE FACTS, THE TRIBUNAL CONDONED THE DELAY BY HOLDING THAT THE ASSESSEE SHOULD NOT SUFFER ON ACCOUNT OF WRONG ADVICE OF THE CONSULTANT. HE SUBMITTED THAT IN THE PRESENT CASE ALSO, THE DELAY IS CAUSED BY THE WRONG ADVICE OF THE CONSULTANT AND THEREFORE, THE DELAY SHOULD HAVE BEEN CONDONED BY CIT(A) AND SINCE, THIS WAS NOT CONDONED BY THE CIT(A), THE TRIBUNAL SHOULD CONDONE THE DELAY AND REMIT THE MATTER BACK TO THE FILE OF CIT(A) FOR DECISION ON MERIT. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, WE REPRODUCE PARA NO. 2 OF THE LETTER SUBMITTED BY THE ASSESSEE BEFORE CIT(A) REQUESTING FOR CONDONATION OF DELAY AND THIS PARA IS AVAILABLE ON PAGES 41 AND 42 OF THE PAPER BOOK. THIS PARA READS AS UNDER. 2. THE PETITIONER IN THE CONDONATION PETITION HAD SUBMITTED THAT THE DELAY IN FILING THE APPEAL WAS ON ACCOUNT OF INCORRECT ADVICE GIVEN BY THE APPELLANT'S CONSULTANT. IN RESPECT OF DEMAND RAISED UNDER SECTION 234E THE PETITIONER WAS ADVISED BY ITS CONSULTANT TO WAIT FOR THE OUTCOME OF WRIT PETITION BEFORE HON'BLE KARNATAKA HIGH COURT CHALLENGING THE CONSTITUTIONAL VALIDITY OF SEC 234E. THEREAFTER THE PETITIONER WAS INFORMED BY THE CONSULTANT THAT AGAINST LEVY OF LATE FILING FEE U/S 234E THERE WAS NO LEGAL REMEDY AVAILABLE TO THE PETITIONER. THE PETITIONER WAS COMPLETELY RELIANT ON THE CONSULTANT FOR ALL TDS RELATED COMPLIANCE AND THEREFORE TOOK NO FURTHER ACTION. TO SUBSTANTIATE THESE FACTS THE PETITIONER ENCLOSES AS ANNEXURE 1 LETTER FROM THE CONSULTANT CONFIRMING THE ABOVE FACTS. 5. NOW WE REPRODUCE PARA NOS. 3 TO 5 OF THE TRIBUNAL ORDER CITED BY LD. AR OF ASSESSEE AS NOTED ABOVE. THESE PARAS ARE AVAILABLE ON PAGE NO. 76 OF PAPER BOOK. THESE PARAS READ AS UNDER. 3. AT THE OUTSET IT IS NOTED THAT THERE IS A DELAY OF 214 DAYS IN FILING THIS APPEAL. FOR THE REASONABLE CAUSE IT HAS BEEN SUBMITTED THAT ASSESSEE WAS WELL VERSED OF TAXATION LAWS PROPERLY. THAT IT WAS ADVISED THAT NO APPEAL COULD BE FILED AGAINST THE ORDER U/S.263 AND THAT SUBSEQUENTLY THEY WERE ADVISED BY ANOTHER ADVISER THE APPEAL SHOULD BE FILED AGAINST ORDER U/S.263. FURTHERMORE AN AFFIDAVIT HAS BEEN FILED BY THE CONCERNED ITA NO. 3143/BANG/2018 PAGE 4 OF 5 CHARTERED ACCOUNTANT WHO IS AUDITOR OF THE COMPANY. IN THE SAID AFFIDAVIT THE SAID CONSULTANT HAS DULY ACCEPTED THAT WRONG ADVICE WAS GIVEN BY HIM ORIGINALLY NOT TO CONTEST THE ORDER U/S.263. IN THE BACKGROUND OF THE ABOVE, THE ASSESSEE HAS SOUGHT CONDONATION OF DELAY IN FILING THE APPEAL AND THE ASSESSEE HAS ALSO PLACED RELIANCE UPON SEVERAL CASE LAWS IN THIS REGARD. 4. PER CONTRA, THE ID. DEPARTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) STRONGLY OPPOSED THE CONDONATION OF DELAY AND PLACED RELIANCE UPON SEVERAL CASE LAWS. 5. UPON CAREFUL CONSIDERATION WE FIND THAT THE DELAY IN FILING THE APPEAL IS SOLELY ATTRIBUTABLE TO THE WRONG ADVICE OF THE CONSULTANT. IN OUR CONSIDERED OPINION, THE ASSESSEE SHOULD NOT SUFFER ON ACCOUNT OF THE WRONG ADVICE OF THE CONSULTANT, HENCE, IN THE SUBSTANTIAL INTEREST OF JUSTICE WE CONDONE THE DELAY 6. FROM THE ABOVE PARAS REPRODUCED FROM THE TRIBUNAL ORDER, IT IS SEEN THAT IT IS HELD BY TRIBUNAL IN THAT CASE THAT THE ASSESSEE SHOULD NOT SUFFER ON ACCOUNT OF WRONG ADVICE OF THE CONSULTANT AND ON THIS BASIS, THE DELAY OF 214 DAYS WAS CONDONED BY THE TRIBUNAL. IN THE PRESENT CASE, AS PER PARA NO. 2 OF THE LETTER SUBMITTED BY THE ASSESSEE BEFORE CIT(A) IN RESPECT OF CONDONATION OF DELAY AS REPRODUCED ABOVE, THIS IS THE SUBMISSION OF THE ASSESSEE THAT ASSESSEE DID NOT FILE ANY APPEAL BEFORE LD. CIT(A) BECAUSE THE ASSESSEE WAS SO ADVISED BY THE ASSESSEES CONSULTANT AND ON PAGE NO. 44 OF THE PAPER BOOK IS THE CERTIFICATE OF THE SAID CONSULTANT SINGHANIA & CO., SOLICITORS & ADVOCATES IN WHICH IT IS CERTIFIED BY THE SAID CONSULTANT THAT THEY HAVE ADVISED THE ASSESSEE TO WAIT FOR THE OUTCOME OF WRIT PETITION BEFORE HON'BLE KARNATAKA HIGH COURT CHALLENGING THE CONSTITUTIONAL VALIDITY OF SECTION 234E OF IT ACT. IT IS ALSO CERTIFIED BY THE CONSULTANT THAT THEY HAVE ALSO ADVISED THE CONSULTANT THAT THERE WAS NO FURTHER LEGAL REMEDY AVAILABLE IN RESPECT OF LEVY OF DEMANDS U/S. 234E OF IT ACT BECAUSE IN JUNE 2015, HON'BLE KARNATAKA HIGH COURT IN THE CASE OF LAKSHMINIRMAN BANGALORE (P.) LTD. VS. DCIT IN W.P. NOS. 26589 OF 2014 UPHELD THE CONSTITUTIONAL VALIDITY OF SECTION 234E. HENCE IT IS SEEN THAT IN THE PRESENT CASE ALSO, THE DELAY IN FILING THE APPEAL BEFORE CIT(A) WAS CAUSED BY THE WRONG ADVICE OF THE CONSULTANT AND THEREFORE, WE RESPECTFULLY FOLLOW THIS TRIBUNAL ORDER CITED BY LD. AR OF ASSESSEE AND HOLD THAT IN THE FACTS OF PRESENT CASE, THE DELAY IN FILING THE APPEAL BEFORE CIT(A) SHOULD BE CONDONED. WE CONDONE THE DELAY AND REMIT THE ENTIRE MATTER BACK TO THE FILE OF CIT(A) FOR A DECISION ON MERIT BECAUSE AS PER IMPUGNED ORDER, THE LD. ITA NO. 3143/BANG/2018 PAGE 5 OF 5 CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BECAUSE HE DECIDED NOT TO CONDONE THE DELAY AND THEREFORE, THERE WAS NO OCCASION FOR CIT(A) TO DECIDE THE ISSUE ON MERIT. WE REMIT THE MATTER BACK TO THE FILE OF CIT(A) FOR A DECISION ON MERIT AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. IN VIEW OF THIS DECISION, WE MAKE NO COMMENT ON THE MERIT OF THE CASE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 21 ST JUNE, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.