ITAT Refuses to Condone a Delay of 1005 Days in Filing Income Tax Appeal without Reasonable Cause [Read Order]

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in appeals filed before it, refused to condone a delay of 1005 days in filling the income tax appeal without reasonable cause.

The aforesaid observation was made by the Delhi ITAT when three appeals were filed before it by the assessee as directed against the consolidated order of the Commissioner of Income Tax (Appeals), Noida, pertaining to the Assessment Years 2004-05, 2005-06 and 2006-07.

The grounds of the assessee’s appeal being that the penalty imposed is bad in facts and legal aspects of the case, and also that the same is barred by time in terms of provisions of Section 275(1)(C), the brief facts of the case were that the assessee had purchased a plot of land for a sale consideration of Rs. 3,04,50,750/- on 14.06.2005. And, one of the co-sellers of the property Smt. Nidhi Raman, was a 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, being the payment made to an NRI. Consequently, proceedings under section 201(1)/201(1A) were initiated against the assessee and an order under section 201(1)/201(1A) was passed by DCIT, International Taxation, Lucknow. Reference dated 25.04.2016, for imposition of penalty under section 271C(1)(a) was received by the Additional Commissioner of Income Tax (International Taxation), Noida from the 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 Income Tax Act.

The explanation offered by the assessee was not acceptable to the 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 had 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 Addl. CIT imposed a total penalty of Rs. 12,36,000/- on account of the assessee’s failure to deduct as well as deposit TDS into the Central Govt. account, for the AY 2004-05, 2005-06 and 2006-07.

Aggrieved, the assessee carried the matter before the CIT(A) who dismissed all the three appeals of the assessee for AY 2004-05, 2005-06 and 2006-07 by observing and recording his findings. And, it is being dissatisfied by the same, that the assessee presently come in appeal before the Tribunal, challenging the order of the CIT(A) and all the grounds of appeal relate thereto.

Hearing the contentions of Shri Sanjay Kumar, the Sr. DR, on behalf of the Revenue, with no representation being made on behalf of the assessee, the Delhi ITAT observed:

“Having regard to the principle of law laid down in various decisions 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.”

“We have enumerated the dates fixed for hearing of the appeals. Despite numerous opportunities provided to the assessee, the assessee chose not to avail them to rebut the findings of the Ld. AO/CIT(A). Resultantly, the findings of the Ld. AO/CIT(A) remain uncontroverted by the assessee before us. For the reason aforesaid, the appeals of the assessee are dismissed as time barred and devoid of any merit”, the coram of G.S Pannu, the President and Astha Chandra, the Judicial Member thus concluded.

To Read the full text of the Order CLICK HERE

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