Case Law Details
State Council for Science Technology & Environment Vs ITO (ITAT Chandigarh)
Introduction: The recent decision of the Income Tax Appellate Tribunal (ITAT) in Chandigarh addresses the State Council for Science Technology & Environment’s dispute with the Income Tax Officer (ITO) regarding the non-deduction of Tax Deducted at Source (TDS).
Delay in Filing the Appeal: The appellant filed appeals for the Assessment Years 2012-13 to 2016-17. Specifically, for the Assessment Year 2016-17, an 18-day delay was noted. The delay arose due to an inadvertent mistake in the challan, which was later rectified. ITAT, taking cognizance of the unintentional error, condoned the delay.
Common Cause of Action: All appeals shared a common cause. The main grievance was that the taxing authorities had mistakenly labeled the appellant as a defaulter under the Income Tax Act.
Main Grounds Raised:
- Wrongful Default Labeling: The taxing authorities erred by terming the appellant as a defaulter without understanding its functioning and the nature of the amount involved.
- Misinterpretation of Section 194C: Authorities mistakenly applied provisions of section 194C, even though the appellant didn’t fall under it and hadn’t deducted the TDS.
- Inaccurate Interest Charge: The Assessing officer wrongly levied interest u/s 201(1 A) without considering the case’s specifics.
- TDS Deduction by NRTC: The TDS was deducted by NRTC u/s 192 of the Income Tax Act, so there wasn’t any revenue loss.
Submission of Additional Evidence: The appellant sought to file a Chartered Accountant’s certificate as additional evidence, stating the compliance with the Income Tax Act. This certificate, which was critical to the dispute, hadn’t been submitted earlier due to an oversight. ITAT, recognizing the importance of this document, admitted it for further consideration.
Conclusion: In a significant move, ITAT allowed the submission of the CA certificate, acknowledging its relevance in determining the case. As a result, the case has been remitted back to the Assessing Officer for a fresh evaluation, with the appellant being given another opportunity for representation. This order underscores the importance of procedural justice and the significance of relevant evidence in tax matters.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
All the above appeals are filed by the Assessee for Assessment Years 2012-13 to 2016-17.
2. In ITA No. 1197/Chd/2019, for Assessment Year 2016-17 there is a delay of 18 days in filing the appeal. The application for condonation of delay states that though the appeal fee was deposited in time, due to some inadvertent mistake in the challan for Assessment Year 2016-17, some other Assessment Year was wrongly mentioned; that however, as soon as this mistake came to the knowledge of the assessee, the same was rectified by depositing appeal amount for Assessment Year 2016-17 and a new challan was also filed with the Registry; and that it was not on purpose that the delay of 18 days in filing the appeal occurred.
3. Finding that the contents of the application for condonation of delay make out a sufficient cause for the incurrence of the delay of 18 days in filing the appeal, this delay is condoned.
4. All the appeals are having a common cause of action. Therefore, they are being disposed of by this composite order. For convenience, the facts are being taken from ITA No. 1193/Chd/2019, for Assessment Year 2012-13, wherein, the following grounds have been raised:
A. Because the Ld. Authorities below has erred in law and fact of the case by treating the appellant as defaulter under the Act without appreciating the functioning and objective of the appellant and without referring to the agreement and nature of the amount which are subject matter of the present case. The orders of the Respondents are highly illegal, arbitrary against the principle of natural justice.
B. Because the Ld. Authorities below has erred in law and fact of the by concluding that provisions of section 194C_are applicable, even when appellant does not fall u/s 194 C and has rightly not deducted the TDS, respondents had ignored the law lay down by the various court on the subject matter of the case .
C. Because the Ld. Assessing officer has erred in law and fact of the case by charging interest u/s 201(1 A) while passing the order with out considering the fact and circumstances of the case.
D. Because TDS from the concerned employees was deducted by NRTC u/s 192 of the Income Tax Act hence there was no revenue loss to the exchequer.
5. The grievance of the assessee is that the Taxing Authorities have wrongly treated the assessee as a defaulter.
5.1. Before us, the assessee has filed an application for additional evidence, stating that the copies of the certificates issued by the Chartered Accountant of National Research & Technologies Consortium (NRTC), endorsing that the amount received has been subjected to Income Tax, be taken on record as additional evidence; that due to some inadvertent mistake / oversight, the same could not be filed at the relevant time.
6. We find that the assessee seeks to file certificates of the Chartered Accountant under the first proviso of Section 201(1) of the Act, for furnishing the return of income, payment of tax, etc, by the payee, wherein, the State Council for Science Technology and Environment has paid to or credited the sums mentioned in the certificates, to the account of the NRTC (payee), without deduction of whole or any part of the tax in accordance with the provisions of Chapter XVII – B of the Income tax Act, that the payee, who is a resident, has furnished his return of income for the years under consideration, relevant to the said payment, that the payee has taken into account the said sums for computing his taxable income in the returns of income filed by him, that it has been ensured by the Chartered Accountant that the information furnished is true and correct in all respects and no relevant information has been concealed or withheld and that neither the Chartered Accountant, nor any of his Partners are Director, Partner or employee of the entity mentioned in the certificates, or their associated concerns. These certificates are dated 30/05/2019. The impugned orders, on the other hand, were passed on 26/06/2019.
6.1. The assessee’s plea is that it was due to some inadvertent mistake / oversight, that these certificates could not be filed during the appeal proceedings before the Ld. CIT(A). It cannot be gainshead that the assessee would not stand to gain anything by not filing the said evidence at the relevant time. The certificates issued by the Chartered Accountant are most relevant for the decision of the dispute at hand. Therefore, in the interest of justice, we admit the aforesaid additional evidence and remit all these appeals to the file of the AO to be decide afresh in accordance with law, on affording due opportunity of hearing to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the AO. Ordered accordingly.
6.2. In the result, all the above appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 18/07/2023.
