Delay in filing appeal condoned as rectification application was not decided

Delay in filing appeal condoned as rectification application u/s 154 was not decided and it constitute a sufficient and reasonable cause

ABCAUS Case Law Citation
ABCAUS 3518 (2021) (06) ITAT

In the instant case, the appellant assessee had challenged the order passed by the CIT(A) in dismissing the appeal of the assessee on account of delay of 20 months, which was not condoned by him.

The assessee had filed return of income inter alia claiming credit of Tax Deducted at Source (TDS).

However, due to the credit for tax deducted not reflected in form No. 26AS of the assessee, the Assessing Officer while passing order under section 143(1) of the Income Tax Act, 1961 (the Act) did not allow the claim of credit of said TDS.

Before the CIT(A), explaining the delay in filing the appeal, the assessee submitted that as per the provisions of section 199 of the Act read with Rule 37BA of Income Tax Rules, 1962 (The Rules) the credit of the TDS has to be given in the assessment year in  which corresponding income is offered for taxation/assessable.

According to the assessee in view of the denial of TDs credit, there were two options before him. First option was filing of rectification application before the Assessing Officer and second option was to file appeal before the Learned CIT(A).

The assessee submitted that he exercised first option of filing rectification application, however later on the assessee came to know that the first option exercise by it was not appropriate and therefore resorted to section option for filing the appeal before the Learned CIT(A).

However, CIT(A) did not condone the delay in filing the appeal on the ground that there was no sufficient cause for the delay in filing the appeal.

Before the Tribunal, the contention of the assessee was that he had filed a rectification application u/s 154 before the Assessing Officer and which was not disposed of and therefore the filed the present appeal before the Learned CIT(A).

The Tribunal observed that the payee in his TDS return had shown the TDS in immediately preceding assessment year, whereas according to the assessee, this income was received in current assessment year and therefore credit was claimed in the return filed for current assessment year.

The Tribunal stated that there was no dispute as to deduction of the tax and the assessee cannot be deprived of the credit of the tax deposited.

The Tribunal opined that prima-facie, this was an issue of rectification and the Assessing Officer should have disposed the rectification application of the assessee.

The Tribunal said that the delay occurred due to exercising of the option of rectification application, which remained unattended by the Department.

The Tribunal further stated that the assessee was not gaining in any manner in filing the appeal with the delay. No malafide was observed in the action of the assessee. 

The Tribunal opined that in given circumstances, filing of the appeal with the delay, constitute a sufficient and reasonable cause and rejection of the request of condonation of the delay in filing the appeal by the CIT(A) was not justified.

Accordingly, the appeal was restored to file of the CIT(A) for deciding afresh on merit and the grounds of the appeal were allowed in allowed the appeal of in the favour of the assessee of the assessee.

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