Case Law Details
Halo Technologies and Training Pvt Ltd Vs ACIT (ITAT Mumbai)
Introduction: This article delves into the recent appeal by Halo Technologies against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre. The dispute revolves around the levy of late fees under Section 234E of the Income Tax Act for the Financial Year 2012-13. The ITAT Mumbai, in its order dated 20.10.2023, directs re-adjudication, highlighting the lack of opportunity for the Assessee to explain the delay in filing the appeal.
Analysis: The grounds of appeal raised by Halo Technologies cover various legal and procedural aspects. The Appellant challenges the levy of Rs. 1,46,000 under Section 234E, citing errors in law and facts. The ITAT, in its analysis, acknowledges the delay of 981 days in filing the appeal and emphasizes the importance of providing an opportunity for the Assessee to explain the delay. The article discusses the arguments presented by both the Appellant and the Departmental Representative, emphasizing the need for a fair hearing.
The ITAT condones the delay of 9 days in filing the appeal before the Tribunal, considering reasonable cause. It further criticizes the CIT(A) for not granting the Appellant an opportunity to explain the delay in the initial appeal filing. The article explores the legal nuances surrounding the power of the Assessing Officer to levy late fees under Section 234E and refers to relevant amendments in the Finance Act, 2015.
Conclusion: In conclusion, the ITAT Mumbai allows the appeal for statistical purposes, directing re-adjudication by the CIT(A). The order, pronounced on 20.10.2023, underscores the importance of providing a fair opportunity to the Assessee to present their case. This article provides insights into the grounds of appeal, the ITAT’s analysis, and the final decision, offering a comprehensive understanding of the case’s implications.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. By way of the present appeal the Appellant has challenged the order, dated 10/03/2023, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] whereby the Ld. CIT(A) had dismissing appeal preferred by the Assessee against the intimation issued under Section 200A and Section 154 of the Act for the Financial Year 2012-13 levying late fees under Section 234E of the Act.
2. The Appellant has raised following grounds of appeal:
1. “The Learned National Faceless Appeal Centre has erred in law, facts, and circumstances of the case by confirming the levy fees of Rs. 1,46,000/- under section 234E of the Income Tax Act, 1961.
2. The Learned National Faceless Appeal Centre has erred in law, facts, and circumstances of the case by confirming the levy fees of Rs. 1,46,000/- under section 234E of the Income Tax Act, 1961 without rebutting the submission made by the Appellant before it.
3. The Learned National Faceless Appeal Centre has erred in law, facts, and circumstances of the case by confirming the levy fees of Rs. 1,46,000/- under section 234E of the Income Tax Act, 1961 and ignoring the fact the provisions of section 200A were amended by the Finance Act, 2015 to enable the fee computation payable u/s 234E at the time of processing of TDS statements and therefore was not applicable to the year under consideration.
4. The Learned National Faceless Appeal Centre has erred in law, facts, and circumstances of the case by confirming the levy fees of Rs. 1,46,000/- under section 234E of the Income Tax Act, 1961 without giving the prior notice or opportunity to the Appellant for submitting the reasons of delay in filing the appeal before the Hon’ble Commissioner of Income Tax (Appeals).
5. The Learned National Faceless Appeal Centre has erred in law, facts, and circumstances of the case by confirming the levy fees of Rs. 1,46,000/- under section 234E of the Income Tax Act, 1961 and ignoring the fact the intimation u/s 200A for Quarter 2-26Q, Quarter 3-24Q, Quarter 4-24Q was time-barred.
6. The Learned National Faceless Appeal Centre has erred in law, facts, and circumstances of the case by confirming the levy fees of Rs. 1,46,000/- under section 234E of the Income Tax Act, 1961 and ignoring the decision of the Hon’ble High court in the case of Fatheraj Singhvi vs UOI (2016) 73 com 252 (Karn).
7. The Learned National Faceless Appeal Centre has erred in law, facts, and circumstances of the case by confirming the levy fees of Rs. 1,46,000/- under section 234E of the Income Tax Act, 1961 and ignoring the fact that the Appellant’s appeal on the same ground has been allowed by the Learned NFAC for FY 2013-14 (AY 2014-15).
8. Your Appellant craves leave to add to, alter, amend, delete and/or modify the above grounds of appeal on or before the final date of hearing.”
3. When the appeal was taken up for hearing, the Ld. Authorised Representative for the Appellant submitted that the appeal preferred by the Appellant has been dismissed by the CIT(A) on the ground that the appeal was barred by limitation and not maintainable without confronting the Appellant and without granting the Appellant an opportunity of being heard. Per contra, the Ld. Departmental Representative supported the order passed by the CIT(A) pointing out that there was a delay of 981 days of filing the appeal. However, no reason for such delay pointed out in Form No. 35 or and the submission filed by the Appellant before CIT(A). In rejoinder, the Ld. Authorised Representative for the Appellant submitted that the Appellant had filed various rectification applications and would have been able to explain the reason in delay in filing the appeal in case the Appellant was confronted with the same. However, no such opportunity was granted by the CIT(A). In this regard, she also referred to the affidavit file before the Tribunal and submitted the Director of the Company did not have knowledge about the procedural requirements which contributed in delay in filing appeal before the Tribunal. She submitted that for the same reasons there was a delay of 9 days in filing appeal before the Tribunal which may also be condoned. The Appellant got knowledge of the impugned order having been passed by the CIT(A) after some delay. The process of taking legal advice and necessary steps for getting the appeal prepared/filed took some time. The Ld. Authorised Representative for the Appellant submitted that the Appellant has a good case on merits since the Assessing Officer did not have the power to levy late fee under Section 234E of the Act at the relevant time. In view of the aforesaid, the Ld. Authorised Representative for the Appellant submitted that the order passed by the CIT(A) be set aside.
4. We have heard the rival submissions recorded hereinabove. The Appellant has explained that the Appellant company and its concerned person got the knowledge of the order passed by the CIT(A) after some time; getting information/details and seeking professional help took time which resulted into delay of 9 days in filing the appeal. Accepting the aforesaid submission of the Appellant we hold that Appellant had reasonable cause for not filing the appeal before the Tribunal in time and therefore, delay of 9 days in filing the present appeal before the Tribunal is condoned.
5. As regards appeal filed by the Appellant before the CIT(A), we note that the appeal was instituted on 05/07/2019. Clearly, there was a delay in filing the appeal. On perusal of the order passed by the CIT(A), it appears that the Appellant was not given an opportunity to explain the delay in filing the appeal or make submission on maintainability thereof. We find merit in the contention advanced on behalf of the Appellant that the Appellant should have been granted opportunity to explain the delay and establish maintainability of the petition. Accordingly, keeping in view the overall facts and circumstances of the case, we set aside the order passed by the CIT(A) and restore the appeal to its original number before the CIT(A) for deciding the appeal afresh after giving the Appellant an opportunity of being heard. The Appellant is directed to file affidavit before the CIT(A) explaining the circumstances leading to the filing of appeal before CIT(A) who shall be at liberty to also decide the issue of condonation of delay in filing the appeal before CIT(A) and its maintainability afresh as per law after giving the Appellant an opportunity of being heard. In terms of the aforesaid, Ground No. 4 raised by the Appellant is allowed while all the other grounds raised by the Appellant are dismissed as being infructuous.
In result, the present appeal preferred by the Assessee is allowed for statistical purposes.
Order pronounced on 20.10.2023.
