M/s Athazhakunnu Mappila L.P. School, Kannur V. ITO WARD TDS, Kannur

ITA 912/COCH/2022

AI Insights

The case involves Athazhakunnu Mappilla L.P. School appealing against the orders of the National Faceless Appeal Centre, Delhi, which dismissed their appeals contesting the levy of fees under section 234E of the Income Tax Act, 1961, for Quarters 2 & 3 of Financial Year 2013-14. The primary legal contention was whether the levy of fees under section 234E was applicable to TDS returns processed under section 200A(1) before June 1, 2015, a provision introduced by the Finance Act, 2015. The Tribunal noted that the appeals were initially dismissed due to an unexplained delay of 308 days in filing, which was not condoned. However, the Tribunal set aside the dismissal and remanded the case for a fresh adjudication on both the delay and the merits of the levy.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 108295 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-05-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 03-10-2022
• Other Referred Cases: Olari Little Flower Kuries (P.) Ltd. v. UoI [2022] 440 ITR 26 (Ker), Sree Narayana Guru Smarakha Sangam UPS vs. GoI [2017] 292 CTR (Ker) 296
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; TDS; Set aside
• Section: 234E

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before ShriSanjay Arora, Accountant Member and ShriAbyT.Varkey, Judicial Member ITA Nos. 911& 912/Coch/2022 (Assessment Year: 2014-15) Athazhakunnu Mappilla L.P. School Athazhakunnu Kottali P.O., Kannur [PAN:CHNAO 2829B] vs. The Income Tax Officer - TDS Kannur [Appellant] [Respondent] Appellant by: Shri Arun Raj S., Advocate Respondent by: Smt. J.M. Jamuna Devi, Sr. D.R. Date of Hearing: 15.05.2023 Date of Pronouncement: 31.07.2023 O R D E R Per: Sanjay Arora, AM This is a set of two Appeals by the Assessee, directed against separate orders by the National Faceless Appeal Centre, Delhi (NFAC/CIT(A)) of even date, i.e., 11.8.2022, dismissing the assessee’s appeals contesting the levy of fees under section 234E of Income Tax Act, 1961 (‘the Act’) for Quarters 2 & 3 of Financial Year 2013-14,vide orders under section 200A(1) of the Act dated 20.12.2015. 2. It was, at the outset, submitted by Shri Raj, the learned counsel for the assessee, that the issue in both the instant appeals is the levy of fees u/s. 234E of the Act on processing of returns of tax deduction at source (TDS) under section 200A(1) of the Act even as there was, prior to 01.6.2015, no provision for the said levy while processing a TDS return u/s. 200A(1) of the Act, which ITA Nos. 911& 912/Coch/2022 (AY 2014-15) Athazhakunnu Mappilla L.P. School v. ITO 2 came on the statute only by Finance Act, 2015 w.e.f. from that date. The issue is squarely covered by the decisions by the Hon’ble jurisdictional High Court, as in Olari Little Flower Kuries (P.) Ltd. v. UoI [2022] 440 ITR 26 (Ker) and SreeNarayana GuruSmarakhaSangam UPS vs. GoI [2017] 292 CTR (Ker) 296, and which are in fact being regularly followed by the Cochin Bench of the Tribunal. Smt. Jamuna Devi, the ld. Sr. D.R., did not rebut any of the contentions by Shri Raj. The matter was accordingly regarded as covered in favour of the assessee, and the hearing closed. 3. At the time of dictation, however, it has, on going through the file/s and reading the impugned orders, come to the light that the impugned orders are not on the merits of the levy under reference, but dismiss the appeals as not maintainable for the unexplained delay of 308 days in filing them, which was, accordingly, relying on case law, which in fact is legion, not condoned. The said appeals would therefore have to be admitted at the first appellate stage prior to being decided on merits, and on which aspect no contentions were raised before us by Shri Raj. That is, much less making out a case for condonation of delay in filing appeals before the first appellate authority, Shri Raj did not even bring this fact to our notice, which is deplorable, as indeed the non-bringing forth of the same by Smt. Devi, suggesting of her having not read the impugned orders. The whole premise of hearing, particularly through counsels, who are trained in the subject, is to assist the court in arriving at an informed opinion and correct decision, consistent with the facts of the case and in accordance with law. 4. Continuing further, there is no whisper for the reasons of the delay, either in the statement of facts or the grounds of appeal before us, which, rather, speak of the delay in filing the TDS returns due to absence of internet facility and support staff. The said delay, which the law subjects to a fees u/s. ITA Nos. 911& 912/Coch/2022 (AY 2014-15) Athazhakunnu Mappilla L.P. School v. ITO 3 234E of the Act –also prescribing the rate, ought to have, on the contrary, made the appellant more conscious and vigilant in the discharge of it’s obligations. The appeals are accordingly liable to be dismissed at the threshold; the delay being not explained at any stage, having been not even, as afore-stated, raised before us, if not also imposing cost inasmuch as the pleadings made before us for and on behalf of the assessee were misleading and, thus, a disservice. We, however, abstain from doing so for, principally, two reasons. Firstly, we regard the Revenue itself as equally responsible for the said misconduct inasmuch as the relevant facts were not brought to our notice during hearing. Two, to be fair to the assessee, it states of non-receipt of any notice of hearing or alert from the office of the ld.CIT(A). Where so, there was thus no occasion for it to plead it’s case, either with regard to condonation of delay or on merits. At column 15 of the Memo of Appeal before the first appellate authority (Form 35),it states some reasons, which therefore would have to be considered on merits. Suffice to say here that genuineness of the cause of delay is essentially a matter of fact, which is to be borne out by or substantiated in the given facts and circumstances of the case. 5. Under the circumstances, we, therefore, only consider it fit and proper to, acceding to the assessee’s Ground No. 4 before us, raising the issue of non- grant of reasonable opportunity of hearing by the first appellate authority – whose order (para 3) though states of several opportunities being extended, remains uncontested before us, set aside the impugned order(s) with a view to adjudicate afresh upon allowing the assessee a fair opportunity to present it’s case with regard to condonation of delay, as indeed on the merits of the levy. The assessee shall, needless to add, fully cooperate in the said proceedings. We decide accordingly. ITA Nos. 911& 912/Coch/2022 (AY 2014-15) Athazhakunnu Mappilla L.P. School v. ITO 4 6. In the result, the appeals by the assessee are allowed for statistical purposes. Order pronounced on July 31, 2023 under Rule 34 of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (AbyT.Varkey) (Sanjay Arora) Judicial Member Accountant Member Cochin, Dated: July 31, 2023 Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin n.p.