Capital Gain exemption is available even if borrowed is used for purchase of new house property.

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Capital Gain exemption is available even if borrowed is used for purchase of new house property.

Catholic Syrian Bank … vs The Ito (Tds), Alappuzha on 25 July, 2019

                                       1

                               IN THE INCOME TAX APPELLATE TRIBUNAL

                               COCHIN BENCH, COCHIN

               BEFORE S/SHRI CHANDRA POOJARI, AM & GEORGE GEORGE K., JM

                 I.T.A. Nos. 280-282/Coch/2019

                                              Assessment Year : 2013-14

CSB Bank Limited,    Vs.        The Income    Tax   Officer(TDS),                                                   Alappuzha.

(Formerly The Catholic Syrian

Bank Ltd).,

Kurianoor Branch,

Puthethu Vadakkethil Building,

Kurianoor Post Office Junction,

Pathanamthitta-689 550.

PAN: AABCT 0024D]

   (Assessee-Appellant)                                                     (RevenueRespondent)

                                                                            I.T.A. Nos. 283-285/Coch/2019

                               Assessment Years : 2013-14 & 2015-16

CSB Bank Limited,          Vs.        The  Income Tax Officer (TDS), (Formerly The Catholic Syrian                                                                    Alappuzha                                 .Bank Ltd).,

Gold    Merchants    Association

Building, XVII/1859,

PB No.3818,Mullakkal,

Alappuzha-688 011.

[PAN: AABCT 0024D]

   (Assessee-Appellant)                                                                       (RevenueRespondent)

                                                                                               I.T.A.Nos.286288/Coch/2019

                                              Assessment Year : 2015-16

CSB Bank Limited,                Vs.                 The Assistant Commissioner of

(Formerly The Catholic Syrian                      Income-tax     (TDS),      CPC,

Bank Ltd).,                                                   Ghaziabad/ITO(TDS), Alappuzha.

Gold    Merchants    Association

Building, XVII/1859,

PB     No.    3818,   Mullakkal,

Alappuzha-688 011.

[PAN/TAN: AABCT 0024D]

   (Assessee-Appellant)                                         (Revenue-Respondent)

                                                                              I.T.A. Nos. 280 to 291/Coch/2019

Assessment Years : 2014-15 & 2015-16

 CSB Bank Limited,             Vs.          The Assistant Commissioner of

 (Formerly The Catholic Syrian              Income-tax     (TDS),      CPC,

 Bank Ltd).,                                Ghaziabad/ITO(TDS), Alappuzha.

 Cheriyanad, Chenganuur Taluk,

 Alappuzha-689 511.

      (Assessee-Appellant)                    (Revenue-Respondent)

               Assessee by       None (written submission filed)

               Revenue by        Smt. A.S. Bindhu, DR

                 Date of hearing               25/07/2019

                 Date of pronouncement         25/07/2019

ORDER

Per CHANDRA POOJARI, AM:

These appeals filed by different Branches of the same assessee are directed against the different orders of the CIT(A), Kottayam relating to late filing of fee u/s. 234E of the Act and pertain to assessment years 2013-14, 2014-15 and 2015-16.

  1. None appeared on behalf of the assessee and the assessee has only filed written submission and requested to consider the same and dispose of the appeals. Hence, we proceed to decide the issue after hearing the Ld. DR.

I.T.A. Nos. 280 to 291/Coch/2019 2.1 Primarily, there was a delay in filing these appeals before the CIT(A) which is enumerated hereinbelow:

Branch ITA                         IT Appeal           Date ofReciept      Due date of Appeal filed   Delay Amount of                                                      of filing om appeal

 Penalty                                                                       involved

   Nos                                   (FY|Form|Quarter)

                                                                                              (Days)

                                         2013-14|27Q|Q4      23.06.2014 23.07.2014     30.12.2017    1256     6,600.00

                                         2014-15 /24Q|Q2     05.02.2015 07.03.2015     29.12.2017    1028     18,600.00

18800                              2014-15 |26Q|Q2     26.01.2015 25.02.2015     30.12.2017    1036

 14400                              2014-15|27Q|Q1      26.07.2014   25.08.2014   30.12.2017   1223

 19200                             2014-15|27Q|Q2      27.01,2015   26.02.2015   30.12.2017  1038

 16800                             2013-14|24Q|Q3      31.05.2014   30.06.2014   08.01.2018   1288

1800                                2013-14|24Q|Q4      31.05.2014   30.06.2014   07.02.2018   1318

1200                                  2014-15|24Q|Q1      24.07.2014   23.08.2014   08.01.2018   1234

1000                                    2014-15|24Q|Q2      25.10.2014   24.11.2014   09.01.2018    1142

25400                                2012-13 |27Q|Q2     02.03.2014   01.04.2014   20.07.2016    841

  21000                                     2012-13 |27Q| 03    26.01.2014   25.02.2014   20.07.2016    876

4400                                     2012-13 |27Q/Q4     02.03.2014   01.04.2014   20.07.2016    841

                                         TOTAL                   1,36,200.00

  1. The assessee explained before the CIT(A) that the reason for the delay in filing these appeals was that the officer handling TDS issues was transferred from the Branches and on subsequent notice by the Head Office, the appeals I.T.A. Nos. 280 to 291/Coch/2019 were instituted. However, the CIT(A) did not condone the delay by observing that there was no sufficient cause for filing the appeals belatedly and dismissed the appeals.
  2. Against this, the assessee is in appeal before us. Now before us, it was submitted that the Income Tax matters of the bank, except periodic filing of TDS returns which were done at the Branch level, are being handled at Head office. The said TDS return was processed at CPC and Intimation u/s 200A was served to the branch and the Branch officials were not aware about filing of appeals against such intimation. When the Head Office came to know about default u/s 234E which was found from the consolidated default report of the bank the same was intimated to the branches. As the appeals had to be filed at head office and as there was delay in branches intimating the Head Office, the appeals could not be filed in time.

4.1 Further, it was submitted that there was also an issue at that point of time on whether appeals could be filed against intimation u/s 200A which also added to the delay in filing of appeal and also appeals questioning the constitutional validity of the section was pending before various High Courts at that time. 4.2 It was submitted that the assessee had not derived any benefit whatsoever by not filing the quarterly TDS statement in time as the amount of TDS was duly I.T.A. Nos. 280 to 291/Coch/2019 deposited in the Government treasury within the prescribed time and such delay had not caused any loss to the revenue and imposing the penalty will create a genuine hardship to staff members of the Bank and also to the assessee. Thus, it was requested to condone the delay in filing of appeals and dispose the appeals based on the merits. The Ld. AR relied on the following judgments of the Supreme Court:

(a) Improvement Trust, Ludhiana vs Ujagar Singh & Others.

(b) Collector Land Acquisition, vs Mst. Katiji & Ors on 19 February, 1987, 1987 AIR 1353

(c) New India Insurance Co. Ltd. v. Smt. Shanti Misra, AIR 1976 SC 237.

(d) N. Balakrishnan vs M. Krishnamurthy, Date of Judgment 03/09/1998.

In Improvement Trust, Ludhiana vs Ujagar Singh & Others it was held as under:

“As a normal rule, delay should be condoned. In the legal arena, an attempt should always be made to allow the matter to be contested on merits rather than to throw it on such technicalities. Justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it of on such technicalities and that too on threshold”.

4.3 It was accordingly submitted that the CIT(A) should have considered the condonation petitions filed by assessees and condoned the delay rather than dismissing the appeals on delay.

4.4 On the merits of the issue involved, it was submitted that the officer handling the TDS issues was transferred from the concerned Branch and I.T.A. Nos. 280 to 291/Coch/2019 subsequently, noticed by the Head Office and the appeals were filed. Prior to 01.06.2015, Sec.200A of the Income Tax Act did not permit levying any fees u/s 234E for delay in submission of return and provided only for correction of any arithmetical error, or incorrect claim, or default in payment of interest and TDS payable or refundable etc. It was submitted that the amendment made with effect from 01.06.2015 should apply only from the first quarter of the year ended 31 st March 2016, i.e., in respect of returns filed for the quarter ended June 2015 and onwards. The assessee placed reliance for this view on the decision of Cuttack Bench of ITAT in the case of TB and ID Hospital vs ITO -TDS dated. 27.08.2018 (ITA 323 to 332/CTK/2018), In the said decision in Para 8 it was held as under:

“Except for the Quarter-1 in the assessment year 2016-2017 (i.e. ITA No.332/CTK/2018), all the quarters i.e. Quarter 4 in the A. Y.2013-2014, for Quarters 1 to 4 in the assessment year 2014-2015 and for Quarters 1 to 4 in the assessment year 2015-2016 are coming under the purview of amendment to Section 200(3) of the Act. Therefore, the fee levied u/s.234E of the Act while processing the statement of tax deducted at source was beyond the scope provided under Section 200A of the Act.” Hence fees for late filing of TDS quarterly statement prior to Assessment Year 2016-17 could not be recovered by way of processing under section 200A.”

4.5 The assessee also relied on the following judgments:

Hon’ble High Court of Karnataka in case of Fatheraj Singhvi v Union of India [2016] 73 taxmann.com 252 (Karnataka) where it was held that:

I.T.A. Nos. 280 to 291/Coch/2019 “It is hardly required to be stated that, as per the well-established principles of interpretation of statute, unless it is expressly provided or impliedly demonstrated, any provision of statute is to be read as having prospective effect and not retrospective effect. Under the circumstances, it is found that substitution made by clauses (c) to (f) of subsection (1) of section 200A can be read as having prospective effect and not having retroactive character or effect. Resultantly, the demand under section 200A for computation and intimation for the payment of fee under section 234E could not be made in purported exercise of power under section 200A by the respondent for the period of the respective assessment year prior to 1-6-2015. However, it is made clear that, if any deductor has already paid the fee after intimation received under section 2QOA, the aforesaid view will not permit the deductor to reopen the said question unless he has made payment under protest. [Para 22] In view of the aforesaid observation and discussion, since the impugned intimation given by the respondent- department against all the appellants under section 200A are so far as they are for the period prior to 1-6-2015 can be said as without any authority under law. Hence, the same can be said as illegal and invalid. [Para 23]”

4.6 The assessee has also relied on the decision of the ITAT Cochin Bench, in the case The Headmistress AV High School (ITA No.145/Coch/2017) relying on the aforementioned case of Fatheraj Singhvi v Union of India [2016] 73 taxmann.com 252 (Karnataka), decided as follows:

“Since the facts of the present case are similar to the facts considered by the Karnataka High Court (supra) and by this Tribunal (supra) wherein it was held that there cannot be levy of late fee u/s. 234E for the period prior to 01/06/2015, we are inclined to delete the levy of late fee u/s. 234E of the Act.”

I.T.A. Nos. 280 to 291/Coch/2019 4.7 Further, it was submitted that CBDT has itself mentioned in its Central Action Plan that only the late filing fee relating to period after 01.06.2015 should be compulsorily collected.

4.8 In view of the above, assessee submitted that levy of interest u/s 234E in intimation u/s 200A was not valid and hence the claim of the assessee allowed. The assessee also submitted that ITAT Cochin Bench, vide order dated 8th October 2018, in 1TA Nos 341 to 345, 346 to 352, 353 to 359, 360 to 367, 368 to 372 and 373 to 380 had not condoned the delay in filing of appeals and dismissed the same as unadmitted and they have filed appeals against these orders before the High Court of Kerala and the same is pending for disposal.

  1. The Ld. DR opposed the condonation petition filed by the assessee.
  2. We have heard the ld. DR. As seen from the records, the reason advanced by the assessee before the CIT(A) was that the delay was due to transfer of the officer concerned in the Branch. Further, the assessee has not explained as to why such a long time was taken in handing over the matter by one person to another person and in all Branches how the same thing has happened. In fact, there is even no attempt to explain the same. The person who is handling the matter would undoubtedly be conscious of the fact that the time to file the appeals is running against the assessee and there must be proper explanation in I.T.A. Nos. 280 to 291/Coch/2019 the condonation petitions that it was taking steps to expedite the filing of the appeals before the CIT(A). The reason explained by the assessee in these condonation petitions is too general and it does not explain the delay except stating that the delay was due to transfer of the concerned officer in the Branch with whom the papers were pending for preparation of the appeals. Thus, we are not satisfied with the reasons filed before the CIT(A) so as to condone the delay in filing the appeals.

6.1 The Apex Court in the case of Office of the Chief Post Master General and Others vs. Living Media India Ltd, and Another, reported in (2012) 348 ITR 7 (SC) while dealing with the condonation of delay application by the State, has observed as under :-

“12. It is not in dispute that the person(s) concerned were well aware or conversant with the issues involved including the prescribed period of limitation for taking up the matter by way of filing a special leave petition in this Court. They cannot claim that they have a separate period of limitation when the Department was possessed with competent persons familiar with court proceedings. In the absence of plausible and acceptable explanation, we are posing a question why the delay is to be condoned mechanically merely because the Government or a wing of the Government is a party before us. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bonafide, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody including the Government.

I.T.A. Nos. 280 to 291/Coch/2019

  1. In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bonafide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red-tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for government departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few. Considering the fact that there was no proper explanation offered by the Department for the delay except mentioning of various dates, according to us, the Department has miserably failed to give any acceptable and cogent reasons sufficient to condone such a huge delay.”

6.2 In the present case, there were no affidavits from the concerned persons who are handling the impugned issues and who are required to take proper steps in filing the appeals before the CIT(A). In the present case, the order of the Tribunal, cited supra does not give any such blanket direction as submitted by the Ld. AR to condone the delay as it does not in any way fetter the Tribunal from exercising its discretion to condone or not to condone the delay in filing the appeals. The condonation petition will have to be case specific and the order of the Tribunal cited by the Ld. AR cannot be read so as to ignore the facts and circumstances of the present cases. Thus, the submission of the assessee cannot be accepted that the delay in filing the appeals by the assessee has to be condoned. Therefore, according to us, each case for condonation of delay would have to be decided on the basis of the explanation offered for the delay, i.e. is it bonafide or not, concocted or not or does it evidence negligence or not. Further, I.T.A. Nos. 280 to 291/Coch/2019 in the present case, the assessee is a scheduled bank supported by a large number of personnel and also assisted by qualified Chartered Accountants and Advocates. The reason as come out from the condonation petitions filed by the assessee, as stated earlier, is that there was transfer of the officer who was handling the issue. We cannot accept such proposition as it cannot be considered as good and sufficient reason to condone the delay. It was submitted that the delay is to be condoned since the issue on merit covered in favour of the assessee. This submission ignores the fact that the object of the law of limitation is to bring certainty and finality to litigation. This is based on the Maxim “interest reipublicae sit finis litium i.e. for the general benefit of the community at large, because the object is every legal remedy must be alive for a legislatively fixed period of time. The object is to get on with life, if you have failed to file an appeal within the period provided by the Statute. It is for the general benefit of the entire community so as to ensure that stale and old matters are not agitated and the party who is aggrieved by an order can expeditiously mover higher forum to challenge the same, if he is aggrieved by it. As observed by the Apex Court in many cases, the law assist those who are vigilant and not those who sleep over their rights as found in the Maxim “Vililantibus Non Dormientibus Jura Subveniunt”. In our opinion, merely because the assessee is not vigilant, it cannot follow that the assessee is bestowed with a right to the delay being condoned. We are conscious of the fact that the period of limitation should not come as an hindrance to do substantial justice between I.T.A. Nos. 280 to 291/Coch/2019 the parties. However, at the same time, a party cannot sleep over its right ignoring the statute of limitation and without giving sufficient and reasonable explanation for the delay, except its appeal to be entertained merely because the assessee is a Bank. Appeals filed beyond a period of limitation have been entertained by us where the delay has been sufficiently explained such as in cases of bonafide mistake. Thus the assessee should be well aware of the statutory provisions and the period of limitation and should pursue its remedies diligently. It cannot expect their appeals be entertained because they are after all the assessee, notwithstanding the fact that delay is not sufficiently explained. More so, the issue in dispute in these appeals is squarely covered against the assessee by the earlier order of this Tribunal in assessee’s own case in ITA Nos. 341 to 345/Coch/2018 & Ors. dated 08/10/2018 wherein similar circumstances, the delay was not condoned and the appeals were dismissed and unadmitted. Hence, the delay is not condoned and the appeals are unadmitted.

  1. In the result, all the appeals filed by the assessee are dismissed as unadmitted.

Order pronounced in the open Court on this 25th July, 2019.

             sd/-                                         sd/-

     (GEORGE GEORGE K.)                              (CHANDRA POOJARI)

     JUDICIAL MEMBER                                ACCOUNTANT MEMBER

Place: Kochi

Dated: 25th July, 2019

I.T.A. Nos. 280 to 291/Coch/2019

GJ

Copy to:

  1. CSB Bank Limited, (Formerly The Catholic Syrian Bank Ltd)., Kurianoor Branch, Puthethu Vadakkethil Building, Kurianoor Post Office Junction, Pathanamthitta-689 550.
  2. CSB Bank Limited, (Formerly The Catholic Syrian Bank Ltd)., Gold Merchants Association Building, XVII/1859, PB No. 3818, Mullakkal, Alappuzha-688 011.
  3. CSB Bank Limited, (Formerly The Catholic Syrian Bank Ltd)., Cheriyanad, Chenganuur Taluk, Alappuzha-689 511.
  4. The Assistant Commissioner of Income-tax(TDS), CPC, Ghaziabad.
  5. The Income Tax Officer(TDS), Alappuzha.
  6. The Commissioner of Income-tax(Appeals), Kottayam.
  7. The Commissioner of Income-tax (TDS), Kochi.

8.. D.R., I.T.A.T., Cochin Bench, Cochin.

  1. Guard File.

By Order (ASSISTANT REGISTRAR) I.T.A.T., Cochin

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