M/s Arowana Consulting Limited , Bangalore V. Deputy Commissioner of Income Tax CPC TDS , Bangalore

ITA 422/BANG/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6210 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 05-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Keywords: Reasonable cause; Condonation of delay; TDS; Set aside
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER SN ITA NO. ASST. YEAR APPELLANT RESPODENT 1-9 422 TO 430 /BANG/2019 2013-14 M/S AROWANA CONSULTING LTD., FORTUNE SARAYU NO.206/193/186/1/30/6 6 TH SECTOR, HSR LAYOUT, ROOPEN AGRAHARA, BENGALURU-560 068. THE DY. COMMISSIONER OF INCOME-TAX CPC TDS/INCOME- TAX OFFICER, WARD-1(1) BENGALURU. 10- 21 431 TO 442 /BANG/2019 2014-15 M/S AROWANA CONSULTING LTD., FORTUNE SARAYU NO.206/193/186/1/30/6 6 TH SECTOR, HSR LAYOUT, ROOPEN AGRAHARA, BENGALURU-560 068. THE DY. COMMISSIONER OF INCOME-TAX CPC TDS/INCOME- TAX OFFICER, WARD-1(1) BENGALURU. 22- 29 443 TO 446 /BANG/2019 448 TO 451/ BANG/2019 2015-16 M/S AROWANA CONSULTING LTD., FORTUNE SARAYU NO.206/193/186/1/30/6 6 TH SECTOR, HSR LAYOUT, ROOPEN AGRAHARA, BENGALURU-560 068. THE DY. COMMISSIONER OF INCOME-TAX CPC TDS/INCOME- TAX OFFICER, WARD-1(1) BENGALURU. PAN AADCM 7560 P APPELLANT BY : SHRI PRAKASH HEGDE, C.A RESPONDENT BY : DR. P.V PRADEEP KUMAR, ADDL. CIT (DR) DATE OF HEARING : 06.08.2019 DATE OF PRONOUNCEMENT : 06.08.2019 ITA NOS.422 TO 451/BANG/2019 PAGE 2 OF 9 O R D E R PER BENCH:- ALL THESE APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST THE COMMON ORDER DATED 07-01-2019 PASSED BY LD CIT(A)-1 3, BENGALURU AND THEY RELATE TO THE FEE LEVIED U/S 23 4E OF THE ACT FOR THE PERIODS RELEVANT TO THE ASSESSMENT YEARS 2013-1 4, 2014-15 AND 2015-16. SINCE IDENTICAL ISSUES WERE URGED IN THES E APPEALS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN NOT CONDONING THE DELAY IN FILING APPEALS BEFORE HIM AN D FURTHER IN CONFIRMING THE FEE LEVIED U/S 234E OF THE ACT FOR A LL THE PERIODS RELEVANT TO THE ABOVE SAID ASSESSMENT YEARS. 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE HAD DEDUCTED TAX AT SOURCE FROM VARIOUS PAYMENTS MA DE BY IT DURING THE YEARS RELEVANT TO ASSESSMENT YEARS 2013- 14, 2014-15 AND 2015-16. THE ASSESSEE IS REQUIRED TO FILE STAT EMENT OF TDS (TDS RETURNS) ON QUARTERLY BASIS. HOWEVER, THERE W AS DELAY IN FILING VARIOUS QUARTERLY TDS RETURNS. ACCORDINGLY, WHILE PROCESSING THE TDS RETURNS, THE FEE U/S 234E OF THE ACT WAS LEVIED IN ALL THE TDS RETURNS. 4. THE ASSESSEE CHALLENGED THE FEE DEMANDED U/S 234E OF THE ACT BY FILING APPEALS BEFORE LD CIT(A). THE ASSESSEE P LACED ITS RELIANCE ON THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT IN THE ITA NOS.422 TO 451/BANG/2019 PAGE 3 OF 9 CASE OF FATHERAJ SINGHVI VS. UOI (2016)(289 CTR 602 ). ALL THE APPEALS CAME TO BE FILED BEFORE LD CIT(A) BELATEDLY , I.E., AFTER A LAPSE OF 2 TO 4 YEARS. THE ASSESSEE ALSO REQUESTED THE L D CIT(A) TO CONDONE THE DELAY BY MENTIONING FOLLOWING REASON:- THE COMMUNICATION FROM TDS CPC HAS BEEN SENT TO E- MAIL ID OF A STAFF WHO WAS HANDLING THE TAX MATTERS AND THE RELEVANT STAFF HAS LEFT THE COMPANY AS SUCH THE LEVY OF FINE U/S 234E HAS NOT BROUGHT TO THE NOTICE IN TIME TO THE MANAGE MENT. HENCE THERE IS DELAY IN FILING THE APPEAL. 5. THE LD CIT(A) TOOK THE VIEW THAT THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF FATHERA J SINGHIV (SUPRA) CANNOT BE TAKEN SUPPORT BY THE ASSESSEE BY OBSERVING AS UNDER:- ......SO THE DEMAND BECAME DUE WITHIN 30 DAYS OF S ERVICE OF THE INTIMATION. HOWEVER, THE APPELLANT DID NOT PAY THE SAME; NOR DID IT CHALLENGE THE LEVY OF THE LATE FILING FE E. BY NOT PAYING THE DEMAND WITHIN THE STIPULATED TIME THE AP PELLANT HAS DEFIED THE PROVISION OF THE ACT FOR WHICH IT CA NNOT BE REWARDED WITH A RELIEF BY RELYING ON THE ORDER OF T HE HONBLE COURT WHICH HAS A PROSPECTIVE EFFECT. THEREFORE, I N VIEW OF THE JUDGMENT IN THE CASE OF FATHERAJ SINGHVI VS. UO I (SUPRA), THE APPEAL FILED BY THE APPELLANT IS NOT MAINTAINAB LE. 6. WITH REGARD TO THE PRAYER FOR CONDONATION OF DELAY, THE LD CIT(A) HELD THAT IT IS THE DUTY OF THE ASSESSEE TO CHECK THE EMAILS AND RETRIEVE THE INTIMATIONS SENT BY TDS CPC. ACCO RDINGLY HE HELD THAT THE REASON CITED BY THE ASSESSEE CANNOT BE TRE ATED AS ITA NOS.422 TO 451/BANG/2019 PAGE 4 OF 9 SUFFICIENT CAUSE FOR FILING APPEALS AFTER A LAPSE OF 2-4 YEARS. ACCORDINGLY, BY PLACING RELIANCE ON THE DECISION RE NDERED BY HYDERABAD BENCH OF TRIBUNAL IN THE CASE OF T.KISHAN VS. ACIT (IT(SS)A NOS. 23 & 25 (HYD) OF 2011), HE REFUSED TO CONDONE THE DELAY AND ADMIT THE APPEALS. ACCORDINGLY, THE LD C IT(A) DISMISSED ALL THE APPEALS. 7. WE NOTICE THAT AN IDENTICAL ISSUE OF DELAY I N FILING APPEALS BEFORE LD CIT(A) BELATEDLY CAME TO BE CONSIDERED BY THIS BENCH IN THE CASE OF AVIATORS INDIA P LTD IN ITA NO.623/BANG /2019. IN THE ABOVE SAID CASE ALSO, THE ASSESSEE HAD FILED THE ST ATEMENT OF TDS THROUGH A STAFF, WHO HAD GIVEN HIS PERSONAL E-MAIL ID AND HAD LEFT THE JOB, I.E., IDENTICAL REASON WAS GIVEN FOR THE D ELAY IN FILING THE APPEAL BEFORE THE LD CIT(A). THE TRIBUNAL, VIDE ITS ORDER DATED 31.07.2019, HAS DECIDED THIS ISSUE AS UNDER:- 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. T HIS APPEAL RELATES TO LEVY OF FEES U/S 234E OF THE ACT. THE ASSESSEE HAS FILED THE QUARTERLY STATEMENT OF TDS B ELATEDLY AND HENCE FEES U/S 234E OF THE ACT WAS LEVIED FOR T HE DELAY IN FILING VARIOUS RETURNS, WHILE PROCESSING THE STATEM ENT OF TDS (TDS RETURNS). 4. THE ASSESSEE FIELD THE APPEAL CHALLENGING THE LE VY OF FEE U/S 234E OF THE ACT, BUT THE SAME WAS DISMISSED BY THE LD CIT(A) ON THE GROUND THAT THE APPEAL IS BARRED BY L IMITATION BY 457 DAYS. HENCE, THE ASSESSEE HAS FILED THIS APPEA L BEFORE US. 5. THE LD AR SUBMITTED THAT THE ASSESSEE DID NOT RE CEIVE ANY NOTICE OF DEMAND FROM THE INCOME-TAX DEPARTMENT PHYSICALLY AND HENCE THE ASSESSEE WAS NOT AWARE OF THE ITA NOS.422 TO 451/BANG/2019 PAGE 5 OF 9 DEMAND RAISED UPON IT. THE ASSESSEE CAME TO KNOW O F THE DEMAND RAISED U/S 234E OF THE ACT, ONLY WHEN IT VER IFIED THE DETAILS OF OUTSTANDING DEMAND IN THE INCOME-TAX SIT E (TRACES PORTAL). UPON NOTICING THE SAME THE ASSESSEE HAS F ILED THE APPEAL BEFORE THE LD CIT(A). 6. THE LD AR FURTHER SUBMITTED THAT THE TASK OF F ILING TDS RETURNS WAS ENTRUSTED TO A STAFF NAMED SHRI DEEN DA YAL AND THE ASSESSEE HAS NOTICED THAT THE SAID STAFF HAS RE GISTERED HIS EMAIL.ID WITH THE INCOME-TAX DEPARTMENT AT THE TIME OF UPLOADING OF TDS RETURNS. HE SUBMITTED THAT THE LD CIT(A) HAS NOTICED THAT THE NOTICE OF DEMAND HAS BEEN SENT TO THE E-MAIL ID REGISTERED WITH THE DEPARTMENT AND HENCE HE DID NOT AGREE WITH THE SUBMISSIONS OF THE ASSESSEE FOR THE DELAY IN FILING THE APPEAL. 7. HOWEVER, IT WAS NOTICED BY THE ASSESSEE THAT THE INTIMATION HAS BEEN SENT TO THE EMAIL.ID OF THE ABO VE SAID STAFF AND HE DID NOT INFORM ABOUT THE SAME TO THE ASSESSE E. THE LD A.R FURTHER SUBMITTED THAT THE ABOVE SAID STAFF HAS RESIGNED FROM THE SERVICES OF THE ASSESSEE COMPANY ON 19/9/2 006. ACCORDINGLY THE LD AR SUBMITTED THAT THERE WAS REAS ONABLE CAUSE IN FILING THE APPEAL BELATEDLY BEFORE THE LD CIT(A) AND ACCORDINGLY SUBMITTED THAT THE LD CIT(A) WAS NOT JU STIFIED IN REFUSING TO CONDONE THE DELAY. 8. ON THE CONTRARY, THE LD DR SUBMITTED THAT THE AS SESSEE HAS BEEN FILING TDS RETURNS REGULARLY AND HENCE IT COULD HAVE VERY WELL ASCERTAINED THE OUTSTANDING DEMAND BY VER IFYING TRACES PORTAL OF INCOME-TAX DEPARTMENT. ACCORDINGLY THE LD DR SUBMITTED THAT THERE WAS NO REASONABLE CAUSE FOR THE ITA NOS.422 TO 451/BANG/2019 PAGE 6 OF 9 ASSESSEE IN FILING THE APPEAL BELATEDLY BEFORE THE CIT(A) AND HE WAS JUSTIFIED IN REFUSING TO CONDONE THE DELAY IN F ILING THE APPEAL. 9. WE NOTICED THAT THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE EMAI.ID REGISTERED WITH THE INCOME- TAX DEPARTMENT IS THAT OF THE EMPLOYEE OF THE ASSESSEE NAMED SHRI DEEN DAYAL. IT IS STATED THAT THE ABOVE SAID STAFF HAS RESIGNED FROM THE SERVICES OF THE ASSESSEE COMPANY IN SEPTEM BER 2016. IT IS THE SUBMISSION OF THE ASSESSEE THAT THE ABOVE SAID STAFF DID NOT INTIMATE ABOUT THE DEMAND RAISED WHILE PROC ESSING THE TDS STATEMENT. ADMITTEDLY, THE ASSESSEE COULD NOT HAVE ACCESS TO THE E-MAIL OF THE STAFF. IT IS THE SUBM ISSION OF THE ASSESSEE THAT IT CAME TO KNOW ABOUT THE DEMAND ONLY WHEN IT VERIFIED THE TRACES PORTAL. ACCORDINGLY IT HAS FIL ED THE APPEAL IMMEDIATELY BEFORE THE LD CIT(A) BY QUOTING THE DAT E OF MAILING OF INTIMATION TO THE STAFF, WHICH HAS RESULTED IN D ELAY IN FILING THE APPEAL BEFORE LD CIT(A). IN OUR VIEW, THE ABOV E SAID EXPLANATIONS FURNISHED BY THE ASSESSEE CONSTITUTES REASONABLE CAUSE FOR THE DELAY IN FILING APPEAL BEFORE THE LD CIT(A). ACCORDINGLY WE ARE OF THE VIEW THAT THE LD CIT(A) W AS NOT JUSTIFIED IN REFUSING TO CONDONE THE DELAY. 10. IN VIEW OF THE FOREGOING DISCUSSIONS, WE CON DONE THE DELAY IN FILING APPEAL BEFORE THE LD CT(A). SINCE THE LD CIT(A) HAS NOT ADJUDICATED THE ISSUES ON MERITS, WE DEEM I T PROPER TO RESTORE THIS APPEAL TO HIS FILE FOR ADJUDICATING TH E ISSUES ON MERITS. ITA NOS.422 TO 451/BANG/2019 PAGE 7 OF 9 8. IN THE INSTANT CASES, WE HAVE NOTICED THAT TH E ASSESSEE HAS GIVEN IDENTICAL REASONING FOR THE DELAY IN FILING A PPEALS BEFORE LD CIT(A). HOWEVER, IT IS NOT CLEAR AS TO WHETHER THE ASSESSEE HAS FURNISHED ANY MATERIAL TO SUPPORT ITS CLAIM. WE AL SO NOTICE THAT THE LD CIT(A) HAS REJECTED THE SUBMISSIONS OF THE ASSES SEE WITHOUT CRITICALLY EXAMINING IT. BEFORE US, THE LD A.R PLA CED HIS RELIANCE ON THE DECISION RENDERED BY THE CO-ORDINATE BENCH IN T HE CASE OF SMT. VEENA SOMANI (ITA NO.2822 & 2823/BANG/2018 DATED 04 -06- 2019), WHEREIN THE TRIBUNAL HAD CONDONED THE DELAY BY FOLLOWING THE DECISION RENDERED BY HONBLE SUPREME COURT IN T HE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI AND OTHE RS (1987)(167 ITR 471)(SC). ACCORDINGLY HE PRAYED THAT THE DELAY IN F ILING APPEALS BEFORE LD CIT(A) MAY BE CONDONED. 9. WE HAVE NOTICED THAT THE LD CIT(A) HAS REFU SED TO CONDONE THE DELAY WITHOUT CRITICALLY EXAMINING THE EXPLANAT IONS FURNISHED BY THE ASSESSEE. WE HAVE ALSO NOTICED THAT IT IS CLEA R AS TO WHETHER THE ASSESSEE HAS FURNISHED ANY MATERIAL IN SUPPORT OF I TS SUBMISSIONS. WE HAVE ALSO EXTRACTED THE ORDER PASSED BY THE TRIB UNAL ON IDENTICAL SET OF FACTS, WHEREIN THE ASSESSEE HAD FU RNISHED THE SUPPORTING MATERIALS. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE MATTER RELATING TO CONDONATION OF DELAY RE QUIRES FRESH EXAMINATION AT THE END OF THE LD CIT(A). 10. WE NOTICE THAT THE LD CIT(A) HAS EXPRESSED THE VIEW THAT THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT I N THE CASE OF FATHERAJ SINGHVI (SUPRA) SHALL HAVE PROSPECTIVE EFF ECT AND THE ASSESSEES APPEALS ARE NOT MAINTAINABLE AS PER THE DECISION ITA NOS.422 TO 451/BANG/2019 PAGE 8 OF 9 RENDERED IN THE ABOVE SAID CASE. THE LD A.R SUBMIT TED THAT THE INTERPRETATION GIVEN BY LD CIT(A) MAY NOT BE CORREC T. ON GOING THROUGH THE OBSERVATIONS OF THE FIRST APPELLATE AUT HORITY, WE ARE OF THE VIEW THAT THE INTERPRETATION GIVEN BY HIM IS NO T CORRECT. HOWEVER, SINCE WE ARE RESTORING THIS ISSUE OF CONDO NATION OF DELAY TO HIS FILE, WE DEEM IT PROPER TO RESTORE THE ARGUM ENTS ADVANCED ON MERITS ALSO TO HIS FILE. ACCORDINGLY WE SET ASIDE THE ORDERS PASSED BY LD CIT(A) AND RESTORE ALL THE ISSUES TO HIS FILE FOR ADJUDICATING THEM AFRESH, AFTER AFFORDING ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. 11. IN THE RESULT, ALL THE APPEALS OF THE ASSESS EE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH AUGUST, 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 6 TH AUGUST, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE. ITA NOS.422 TO 451/BANG/2019 PAGE 9 OF 9 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. DICTATION NOTE ENCLOSED . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER .