Mass Awash Private Limited Vs ACIT (ITAT Delhi)
ITAT Delhi declined to condone the inordinate delay of 1005 days in filing of appeal in absence of sufficient cause for delay in filing of the same.
Facts- The matter decided here is that the registry noticed that all the three captioned appeals filed by the assessee are late by 1005 days and even the appeal fee has not been paid under the correct minor head 300. However, the assessee filed an application dated 24.02.2021 on 26.02.2021 for condonation of the said delay in filing appeal.
Conclusion- In CIT vs. Shankarlal Ved Prakash (HUF) 271 ITR 171 (Del) the Hon’ble Delhi High Court observed that in a case of apparent lethargy, the observation of Hon’ble Supreme Court in State of Haryana vs. Chandramani AIR 1996-SC-1623 that the expression “sufficient cause” should be considered with pragmatism could not be permitted to be used as a shield for inaction.
Having regard to the principle of law laid down in the decisions (supra) and in the facts and circumstances of the assessee’s case, we decline to condone the inordinate delay of 1005 days in filing appeal before the tribunal.
FULL TEXT OF THE ORDER OF ITAT DELHI
The three appeals filed by the assessee are directed against the consolidated order of the Ld. Commissioner of Income Tax (Appeals)-2, Noida dated 27.03.2018 pertaining to the Assessment Years (“AYs”) 2004-05, 2005-06 and 2006-07. Since the issues are common, all the three appeals were heard together and accordingly the same are being disposed of by this common order.
2. The assessee has raised the following grounds in all the three AYs:-
“1. That the penalty imposed is bad in facts and legal aspects of the case.
2. That penalty imposed is barred by time in terms of provisions of Section 275(1)(C).
3. That the penalty order is bad in law because penalty order passed by the Additional Commissioner of Income Tax, International Taxation, Noida is said to have been passed on 28.03.2017 at Noida and on the same date i.e. 28.03.2017, the Deputy Commissioner of Income Tax, International Taxation Circle, Lucknow has issued the demand notice under Section 156 of the Income Tax Act.
4. That when the appellant was having reasonable cause in not deducting TDS u/s 195 the penalty imposed is bad in law.
5. That the appellant was not in the knowledge that Smt. Nidhi Ram Singh was an NRI and there were no circumstances to suggest to appellant that she was NRI hence there was reasonable cause with appellant in not deducting TDS in terms of section 195.
6. That the order passed is against the merit, circumstances and legal aspects of the case.”
3. The brief facts of the case are that the assessee purchased a plot of land for a sale consideration of Rs. 3,04,50,750/- on 14.06.2005. One of the co-sellers of the property Smt. Nidhi Raman was non resident Indian (NRI) who had 1/5th share in the property to the tune of Rs. 60,00,000/-. The assessee while making payment to Smt. Nidhi Raman failed to withhold tax under section 195 of the Income Tax Act, 1961 (the “Act”) being the payment made to a NRI. Consequently proceedings under section 201(1)/201(1A) of the Act were initiated against the assessee and an order under section 201(1)/201(1A) was passed by DCIT, International Taxation, Lucknow. Reference dated 25.04.20 16 for imposition of penalty under section 271 C( 1) (a) of the Act was received by the Additional Commissioner of Income Tax (International Taxation), Noida from the Ld. Assessing Officer and notices dated 03.05.2016 and 29.08.2016 were issued wherein the assessee was required to show cause as to why penalty may not be imposed for failure to deduct tax under section 195 of the Act. The explanation offered by the assessee was not acceptable to the Ld. Addl. CIT, International Taxation, Noida who observed that there was no reasonable cause for failure to deduct TDS and that the assessee in its submission has also not raised any grounds or circumstance which might have led to the failure in deduction of TDS. The assessee’s explanation that none of the sellers were non resident and that the proceedings initiated under section 201(1)/201(1A) have become barred by limitation were also found to be not tenable. Accordingly, vide his order dated 28.03.2017 passed under section 271C(1)(a) the Ld. Addl. CIT imposed a total penalty of Rs. 12,36,000/- on account of assessee’s failure to deduct as well as deposit TDS in to the Central Govt. account for AY 2004-05, 2005-06 and 2006-07 as indicated in the table below:
