2025 (6) TMI 1325 - AT - Income Tax

Condonation of delay of 181 days in filing the appeal before CIT(A) - Whether CIT(A) has dismissed the appeal in limine without condoning the delay even though the assessee has sought for personal hearing through video conferencing to explain the case - assessee has submitted all the details. HELD THAT - We find that admittedly CIT(A) has dismissed the appeal of assessee in limine without condoning the delay. The Assessing Officer also made the impugned addition without appreciating the relevant documents such as relevant quarterly returns along with challans and also party-wise TDS statements to prove TDS deduction on various payments including salary u/sec.192B TDS on contract payments u/sec.194C TDS on interest on loan u/sec.195 etc. made by the assessee. We therefore after considering the reasons given by the assessee condone the delay of 181 days in filing the appeal before the learned CIT(A) and deem it fit and appropriate to remit the matter back to the file of Assessing Officer for fresh verification. The assessee is directed to file all the documents including relevant quarterly returns etc. to prove it s case in consequential proceedings. Accordingly the grounds of the assessee are allowed for statistical purposes.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Tribunal in this appeal are:

• Whether the delay of 181 days in filing the appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] can be condoned on the grounds presented by the assessee;
• Whether the Assessing Officer's order passed under section 201(1) and 201(1A) of the Income Tax Act, 1961, determining short deduction of TDS and interest, was justified without considering the relevant documentary evidence submitted by the assessee;
• Whether the assessee was denied a reasonable opportunity of hearing before the impugned assessment order was passed;
• Whether the matter should be remitted back to the Assessing Officer for fresh adjudication after considering the relevant documents and evidence filed by the assessee;
• Whether the CIT(A) was correct in dismissing the appeal in limine without condoning the delay and without providing an opportunity to the assessee to be heard.

2. ISSUE-WISE DETAILED ANALYSIS

Condonation of Delay in Filing Appeal before CIT(A)

Relevant Legal Framework and Precedents: The Income Tax Act and procedural rules empower the CIT(A) to condone delay in filing appeals if sufficient cause is shown. The principle of substantial justice mandates that procedural lapses should not bar adjudication on merits if reasonable cause is demonstrated.

Court's Interpretation and Reasoning: The Tribunal observed that the delay of 181 days was initially not condoned by the CIT(A) who dismissed the appeal in limine. The assessee had explained reasons for the delay, which the CIT(A) found insufficient. However, the Tribunal considered the principles of natural justice and the need to adjudicate matters on merits rather than technicalities.

Key Evidence and Findings: The assessee had filed the appeal with delay and provided explanations for the same. The Tribunal found these reasons adequate to condone the delay, emphasizing the importance of hearing the substantive issues.

Application of Law to Facts: The Tribunal applied the principle that delay should be condoned liberally where there is a reasonable cause and no mala fide intent. It concluded that the CIT(A) erred in not condoning the delay.

Treatment of Competing Arguments: The Revenue did not oppose the remand but agreed to set aside the matter for fresh consideration. Thus, the Tribunal sided with the assessee on this procedural ground.

Conclusion: The delay of 181 days in filing the appeal before CIT(A) is condoned.

Validity of Assessment Order Passed Without Considering Relevant Evidence and Without Reasonable Opportunity of Hearing

Relevant Legal Framework and Precedents: Section 201(1) and 201(1A) of the Income Tax Act impose liability for failure to deduct or pay TDS. However, principles of natural justice require that the assessee be given a reasonable opportunity to present evidence and be heard before adverse orders are passed. The survey under section 133A(2A) is a fact-finding exercise and the Assessing Officer must consider all relevant documents submitted.

Court's Interpretation and Reasoning: The Tribunal found that the Assessing Officer passed the impugned order without appreciating the detailed documentary evidence submitted by the assessee, including quarterly returns, challans, and party-wise TDS statements relating to various sections (192B for salary, 194C for contract payments, and 195 for interest on loan). Further, the assessee was not afforded a reasonable opportunity of hearing before the order was passed.

Key Evidence and Findings: The assessee had submitted comprehensive details to prove compliance with TDS provisions. The Tribunal noted the absence of any meaningful consideration of these documents by the Assessing Officer.

Application of Law to Facts: The Tribunal held that the Assessing Officer's failure to consider relevant evidence and to provide a reasonable opportunity of hearing vitiated the assessment order. The principles of natural justice were not complied with.

Treatment of Competing Arguments: The Revenue acknowledged the procedural lapse and consented to remand the matter for fresh adjudication.

Conclusion: The assessment order is set aside and remitted to the Assessing Officer for fresh verification after providing the assessee an opportunity to be heard and to file all relevant documents.

Dismissal of Appeal by CIT(A) in Limine Without Condoning Delay

Relevant Legal Framework and Precedents: The CIT(A) is empowered to condone delay in appeals filed beyond prescribed time limits if sufficient cause is shown. Dismissal in limine without considering the merits or condoning delay is generally disfavored unless the delay is unexplained or inordinate.

Court's Interpretation and Reasoning: The Tribunal found that the CIT(A) erred in dismissing the appeal without condoning the delay and without affording an opportunity for hearing, especially when the assessee sought personal hearing through video conferencing.

Key Evidence and Findings: The assessee's request for hearing and submission of reasons for delay were ignored by the CIT(A).

Application of Law to Facts: The Tribunal applied the principle that appeals should be decided on merits and procedural lapses should be excused if reasonable cause exists.

Treatment of Competing Arguments: The Revenue did not oppose the remand and condonation of delay.

Conclusion: The CIT(A)'s order dismissing the appeal in limine is set aside, delay is condoned, and appeal is restored for adjudication on merits.

3. SIGNIFICANT HOLDINGS

The Tribunal held:

"We, therefore, after considering the reasons given by the assessee, condone the delay of 181 days in filing the appeal before the learned CIT(A) and deem it fit and appropriate to remit the matter back to the file of Assessing Officer for fresh verification."

"The Assessing Officer also made the impugned addition without appreciating the relevant documents such as relevant quarterly returns along with chall