Case Law Details
Adithya Ferro Alloys Pvt. Limited Vs AO (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT) in Chennai has recently adjudicated a series of appeals filed by Adithya Ferro Alloys Pvt. Limited against the Commissioner of Income Tax (Appeals)-10, Hyderabad, concerning various quarters of the Assessment Years (AY) 2013-14 & 2014-15. The appeals were primarily focused on challenging fees imposed under Section 234E of the Income Tax Act, 1961, for the late filing of quarterly Tax Deducted at Source (TDS) returns. The ITAT’s decision to dismiss the appeals due to an inordinate delay in filing highlights the importance of adhering to statutory timelines in tax compliance and litigation.
The core issue revolved around the levy of fees under Section 234E by the TDS Centralized Processing Centre (CPC) for the late submission of quarterly TDS returns by the assessee. Despite the appeals being lodged with a significant delay exceeding 3000 days, the First Appellate Authority dismissed them due to the failure to condone such a substantial delay. The assessee’s contention rested on logistical challenges, including the collection of necessary documents and coordination with chartered accountants, which purportedly contributed to the delay.
The ITAT’s deliberation took into account the submissions from both parties, weighing the reasons for the delay against the principles established by jurisprudence for condoning delays in legal proceedings. The tribunal referenced the Supreme Court’s observation in the case of Perumon Bhagvathy Devaswom vs. Bhargavi Amma (Dead) by LRs, which emphasized a liberal construction of “sufficient cause” for delay, aimed at advancing substantial justice, provided the delay was not a result of dilatory tactics or negligence.
Despite these considerations, the ITAT concluded that the assessee’s inaction over eight years exhibited a clear negligence and lack of bona fides in pursuing the statutory right to appeal within the prescribed timeframe. Consequently, the appeals were dismissed at the threshold for the want of condonation of delay, underscoring the tribunal’s strict stance on adhering to procedural timelines and the diligent exercise of legal rights.
Conclusion: The ITAT Chennai’s ruling in the case of Adithya Ferro Alloys Pvt. Limited vs. AO serves as a stark reminder of the consequences of neglecting statutory timelines for legal recourse. This judgment not only sheds light on the tribunal’s approach towards cases marred by inordinate delays but also reinforces the legal maxim that justice delayed is justice denied. For taxpayers and practitioners alike, this case underscores the critical importance of timely compliance with tax obligations and the proactive pursuit of legal remedies within the bounds of statutory provisions.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
1. All these appeals have been filed by the assessee for various quarters of Assessment Years (AY) 2013-14 & 2014-15. The Assessment Year has wrongly been mentioned at few places in impugned orders as well as in Form 36 which appears to be merely typographical errors. Nevertheless, we proceed with adjudication of these appeals. It is admitted fact that the impugned order is pari-materia the same for all the years.
2. The assessee was saddled with impugned fees u/s 234E by TDS, CPC for late filing of quarterly TDS returns. The assessee assailed the same with inordinate delay of more than 3000 days in each of the appeal which resulted into dismissal of the appeals by first appellate authority for want of condonation of delay. The Ld. CIT(A) noted that there was no sufficient cause for such an inordinate delay of more than 8 years and accordingly, the appeals were not admitted. Aggrieved, the assessee is in further appeal before us.
3. Even before us, the registry has noted delay of 177 days in each of the appeal, the condonation of which has been sought by Ld. AR on the strength of identical worded affidavits of Managing Director of Assessee It has been submitted that the delay was neither willful nor deliberate but due to the time involved in collating the relevant data since Chartered Accounts were busy with the year-end book closure, return filings and other audit engagements. It has also been submitted that delay was further caused due to the time involved in collecting the papers from Chartered Accountants and delivering it to the advocates. The Ld. Sr. DR, on the other hand, pleaded for dismissal of all the appeals at its threshold. Having heard rival submissions and after perusal of impugned orders, our adjudication would be as given in succeeding paragraphs.
4. It is undisputed fact that there was delay in filing of quarterly TDS returns and accordingly, while processing TDS returns, CPC (TDS) has levied fees u/s 234E. The assessee remained silent for more than 8 years and suddenly assailed the same before first appellate authority which got dismissed for want of condonation of delay. The Ld. CIT(A) noted that the assessee did not furnish any documentary evidence in support of sufficient cause except filing an old affidavit repeating the same statement of resignation of staff etc. Upon perusal of the same, it was to be concluded that the assessee did not have any sufficient cause seeking condonation of delay and it was conscious decision of the assessee not to contest the levy of impugned fees since the same was mandatory in nature.
5. The Hon’ble Supreme Court, in the case of Perumon Bhagvathy Devaswom, Perinadu Village Vs. Bhargavi Amma (Dead) by LRs, (2008) (8 SCC 321), has pertinently observed that the decisive factor in condonation of delay is not the length of delay but sufficiency of a satisfactory explanation. The degree of leniency to be shown by a court depends on the nature of application and facts and circumstances of the The expression “sufficient cause” should receive a liberal construction so as to advance substantial justice, when the delay is not on account of any dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the appellant. In a situation where there exists inordinate delay and the same is attributable to the party’s inaction and negligence, the Courts have to take a strict approach so as to protect the substantial rights of the parties. The courts would refuse to exercise discretionary powers if it is found that the applicant had neglected / omitted to assert its rights in a timely manner. A distinction has to be made between inordinate delay and delay of few days.
6. In the present case, we are of the considered opinion that the assessee has remained negligent in filing the appeals before first appellate authority as well as before us. It is clear that the statutory right to appeal which was vested with the assessee has not been exercised within the stipulated time as provided under law. It is a case of lapses which is directly the result of deliberate inaction on the part of the assessee. Therefore, we dismiss all the appeals at its threshold for want of condonation of delay. Even otherwise, there is no sufficient cause with the assessee seeking condonation of inordinate delay of more than 8 years before first appellate authority.
7. In the result, all the appeals are dismissed as aforesaid.
Order pronounced in open court on 18th December, 2023.
Author Bio
