The Delhi Income Tax Appellate Tribunal (ITAT) has made a significant ruling regarding the jurisdiction of assessing officers under Section 153C of the Income Tax Act, 1961. A Bench comprising Accountant Member S. Rifaur Rahman and Judicial Member Sunil Kumar Singh emphasised that assessing officers cannot assume or extend their jurisdiction to assessment years that fall outside the specified statutory block defined by this provision. The tribunal stated that assessment years 2010-11 and 2011-12 clearly fall outside the scope of application of Section 153C for the reason that the date of search for unsearched parties are the date on which documents were handed over to the Assessing Officer or from the date on which satisfaction was recorded by the Assessing Officer of the other person. This ruling underscores the importance of adhering to the defined parameters of Section 153C when conducting assessments.
The delay occurred due to technical issues with email communication, as the appellate order was sent to the registered email address but was automatically diverted to the spam folder instead of appearing in the primary inbox. According to the Tribunal's order, Skytop Builders explained that Mr. Girish, the accountant responsible for tax matters, had abruptly left the company, leaving no person within the organisation aware of or able to access the relevant email communication. The Revenue opposed condonation, arguing that such a prolonged delay had not been satisfactorily explained. However, the Tribunal accepted that the combination of automatic email diversion and sudden departure of the responsible accountant constituted sufficient cause for the delay.
During assessment proceedings, the Assessing Officer found that the assessee had received employees' contribution towards provident fund amounting to ₹299,268, of which ₹198,179 was not deposited with the concerned authorities on or before the due date, and ₹33,279 was not paid at all. Consequently, an aggregate disallowance of ₹2,31,458 was made under section 36(1)(va). The AO also found that the assessee had deducted tax at source but had not deposited ₹199,167 with the Government. The assessee submitted that it had deducted ₹236,111 under section 194C on payments of ₹12,420,133 made to various contractors, but failed to deposit short TDS of ₹199,167. Since tax corresponding to payments of ₹9,958,350 was not deducted or deposited to the credit of the Central Government, ₹2,987,505 was disallowed under section 40(a)(ia).
The Tribunal restored the disallowance issues to the Assessing Officer for verification, directing that if the assessee had already made suo motu disallowance, the corresponding addition must be deleted. If no such disallowance had been made, the assessee must be given an opportunity to establish that the respective payees had included the relevant receipts in their returns and paid the resulting taxes. The assessee must also furnish the prescribed Chartered Accountant's certificate contemplated by the proviso to section 201(1). If these conditions are satisfied, the assessee would not be treated as an assessee in default and the corresponding relief under the second proviso to section 40(a)(ia) must be examined. If the assessee fails to furnish the required evidence, the disallowance would be confirmed. The appeal was accordingly allowed for statistical purposes with the above directions.
