Commissioner of Income Tax vs Zonal Officer-V, Corporation of Chennai

P.P.S. Janarthana Raja, J.—This appeal is filed by the Revenue u/s 260A of the Income Tax Act, 1961 against the order of the Income Tax

Appellate Tribunal, Madras ""B"" Bench dated June 9, 2006, in I.T.A. No. 1198/Mds/2002, raising the following questions of law:

If the order of the Commissioner of Income Tax (Appeals) is not clear according to the Tribunal, whether the Tribunal is vested with powers to

remit back the matter to the Commissioner of Income Tax (Appeals) in the circumstances of the case instead of the Assessing Officer ?

When the Commissioner of Income Tax (Appeals) was not satisfied both on the merits and also did not condone the delay in filing the appeal

without setting aside the order of the Commissioner of Income Tax (Appeals) relating to the non-condonation of delay in filing the appeal, whether

the Tribunal was empowered to remit back the matter directly to the Assessing Officer ?

Whether the order of the Income Tax Appellate Tribunal is sustainable in law, when no speaking order has been passed on the issue relating to

the dismissal of the appeal as inadmissible by the Commissioner of Income Tax (Appeals) ?

The brief facts are as follows:

The relevant assessment year is 1995-96. The corresponding accounting year ended on March 31, 1995. The assessee is a tax deduct or u/s

194C of the Income Tax Act. It was noticed by the Assessing Officer that the assessee did not file its annual return in Form No. 26C regarding tax

deducted at source out of contract payments made during the financial year. The assessee had disbursed considerable amounts during the above

period by way of contract payments to the contractors. However, in the absence of annual return, details of tax deducted at source out of the

contract payments and the remittance could not be ascertained. So, the Assessing Officer directed the assessee to furnish details. As the details

were not furnished by the assessee, the Assessing Officer has issued a penalty notice u/s 272A(2)(c) of the Income Tax Act on May 21, 1997,

and the same was served on the assessee on April 25, 1997. In response to the notice, the assessee has also sent a reply and promised that the

annual return would be filed on or before June 30, 1997. But there was no compliance. Hence, the Assessing Officer levied the penalty of Rs.

87,800 u/s 272A(2)(c) of the Income Tax Act. Aggrieved by that order of penalty, the assessee, by mistake, filed an appeal to the Assessing

Officer instead of filing appeal to the Commissioner of Income Tax (Appeals). Later on, it was re-presented to the Commissioner of Income Tax

(Appeals). Hence there was a delay in filing the appeal. The said Commissioner of Income Tax (Appeals) dismissed the appeal on the ground that

it was belatedly filed. Aggrieved by that order, the assessee has filed an appeal to the Income Tax Appellate Tribunal, Chennai, and the Tribunal

remanded the same to the Assessing Officer directing him to verify and levy the penalty after verification. Against that order, the present appeal is

filed.

Learned counsel appearing for the Revenue submitted that the Commissioner of Income Tax (Appeals) is correct in dismissing the appeal on the

ground that there is no reasonable cause for filing the appeal belatedly. Therefore, the Tribunal is wrong in remitting the matter to the Assessing

Officer with a direction to redo the same. It is therefore submitted that the order passed by the Tribunal is not in accordance with law and the same

should be set aside.

Heard the counsel. The annual return in Form 26C for the year ending ought to have been filed on or before June 31, 1995. But the assessee

has not filed the return in time and hence, there is a delay in filing the same. The Assessing Officer was of the view that there is a delay of 878 days

in filing the return. But, there are no details regarding the mode of computation of the number of days delay by the Assessing Officer. So the

Tribunal was of the view that it is not clear from the order of the authorities below as to the exact number of days delay. Hence, the Tribunal set

aside the order of the Commissioner of Income Tax (Appeals) and held as follows:

From the order of the Commissioner of Income Tax (Appeals), it is not clear that whether there is delay in filing the annual return regarding tax

deducted at source or not. Hence, we are of the view that this issue is to be set aside to the file of the Assessing Officer to decide whether there is

delay of 878 days or 304 days. Accordingly, we set aside this issue to the file of the Assessing Officer with direction to find whether there is a

delay and penalty is leviable or not in view of the facts and circumstances of the case and decide this issue on the merits and according to the

provisions of the law.

It is only a remand order and hence, no prejudice would be caused to the Revenue. The learned Counsel appearing for the Revenue was also

unable to point out that the remand order would cause prejudice to the Revenue. Hence, we do not find any error or infirmity in the order of the

Tribunal warranting interference and the order of the Tribunal is in accordance with law and the same is confirmed. In these circumstances, no

substantial question of law arises put of the order of the Tribunal and the Tax Case (Appeal) is liable to be dismissed and accordingly it is

dismissed.