Interest on tax not deducted at source u/s.201(1A) of the Income Tax Act

The Income Tax Appellate Tribunal allowed the appeals filed by the Bruhat Bengaluru Mahanagara Palike (BBMP). The appeals concerned orders related to interest on tax not deducted at source under sections 201(1) and 201(1A) of the Income Tax Act. The Tribunal found that section 194CA of the Act was not applicable in this case, quashing the previous orders and allowing the BBMP's appeals.

IN THE INCOME TAX APPELLATE TRIBUNAL
“C” BENCH : BANGALORE
BEFORE SHRI N.V.VASUDEVAN, VICE-PRESIDENT AND
SHRI B.R.BASKARAN, ACCOUNTANT MEMBER
ITA Nos. 98 & 99/Bang/2020
Assessment year : 2013-14

Chief Accounts Officer,
Bruhat Bengaluru Mahanagara
Palike (BBMP),
N. R. Square,
Bengaluru – 560 002.
PAN : AAALB 1608 F

APPELLANT

Vs

Income-Tax Officer (TDS),
Ward - 1(1), IV Floor,
HMT Bhavan,
Bellary Road,
Bengaluru – 560 032.

RESPONDENT

Assessee by : Shri. V.Chandrasekar,Advocate
Revenue by : Shri. Pradeep Kumar, CIT (D.R.)
Date of hearing : 20.07.2021
Date of Pronouncement : 28.07.2021
O R D E R

These appeals by the assessee are directed against the separate ex-parte orders of CIT(A)-13, Bengaluru, dated 03.12.2019; for Assessment Year 2013-14 dismissing the assessee’s appeals in limine by not condoning the delay
in filing the appeal before him and thereby confirming the orders of ITO (TDS) Ward – 1(1), Bangalore, dated 17.03.2015 passed under section 201(1) and 201(1A) of the Income Tax Act, 1961 (in short ‘the Act’).
2.The assessee, Bruhat Bengaluru Mahanagara Palike (BBMP) is a local authority overseeing the development and provision of civic amenities of the city of Bengaluru. In consideration for acquisition of land for the purpose of providing civic amenities and infrastructure, the Assessee provided Development Right’s Certificate(DRC).

3.Against the order of the AO, the assessee preferred appeal before CIT(A). There was a delay of 598 days in filing appeal before CIT(A) physically and further delay in filing the appeal online (1077 days). The delay in filing the
appeal upto the date of the appeal being physically filed is relevant and the filing of appeal online as per legal requirements cannot be viewed as delay technically. The assessee explained the delay in filing the appeal as owing to
the reason that the order appealed against was served on the assessee on 20.03.2015 during the general election to Lok Sabha and the officials of the BBMP were preoccupied with statutory duties relating to election.

4.We have carefully considered the rival submissions. On the issue of condoning the delay, this Tribunal in the case of M/s. Raghavendra Constructions (supra) has dealt with the issue.

5.Respectfully following the decisions of the Hon’ble Karnataka High Court (supra) and the Co-ordinate Bench of this Tribunal in the assessee’s own case for Assessment Years 2010-11 and 2011-12 (supra) on the identical issue, we hold that the provisions of section 194CA of the Act are not applicable / attracted in the facts and circumstances of the case on hand and therefore we hold that the impugned orders under section 201(1) and 201(1A) of the Act are bad in law and hereby quashed.

6. In the result, the assessee’s appeals are allowed.
Order pronounced in the open court on this 28th day of July, 2021.

Please find attached the enclosed file for the full judgement.