The Income Tax Appellate Tribunal clarified that non-filing of Form 26A does not justify disallowance if the recipients have duly reported and taxed their income.

ORDER

PER A.D.JAIN, VICE PRESIDENT

This is Department’s appeal and assessee's Cross Objections for assessment year 2014-15.

2. The Cross Objection is time barred by 113 days. In the application for condonation of delay, accompanied by the affidavit of Shri Nav Rattan Munjal, Director, it has been stated that the assessee had received the intimation of appeal filed by the revenue containing Form 36 and Grounds of Appeal on 16^th September, 2023. However, the office staff who had received those documents forgot to hand them over to the Accounts-cum-Tax department of the assessee company due to which no further action was taken in respect of those documents received by the assessee.When the notice of hearing of appeal was received by the assessee on 23.01.2024 from ITAT Bench in respect of schedule of hearing on 22.02.2024, the same was forwarded to the Tax Counsel. The tax counsel enquired for the status of Form 36 and Grounds of appeal filed by the revenue. Then the assessee cross checked from the office and office staff who had received the documents intimated that the documents were received by him but he forgot to hand over the same to the concerned person; then those documents were immediately handed over by him to the Accounts-cum-Tax Department of the assessee company and then the same were ultimately forwarded to the Tax Counsel for necessary action; thereafter, the Tax Counsel advised the assessee company to immediately file the Cross Objections in respect of the appeal filed by the Department along with the application for condonation of delay; the assessee company after consulting its legal counsel immediately took steps to file the cross objection against the appeal filed by the Revenue on 06.02.2024 and thus there is a delay in filing of cross objection by 113 days due to negligence on the part of the staff working in the office of the assessee company.

3. From the contents of the application, we find that the assessee was prevented by sufficient cause from filing the Cross Objections in time. Even otherwise, the assessee cannot be said to stand to gain anything by deliberately delaying the filing of the Cross Objections. Therefore, the delay is condoned.

4. The Department in its appeal in ITA No.534/CHD/2023 has raised the following grounds :

(i) The Ld, CTT(A), on facts and circumstances of j the ease, has erred in deleting the disallowance made of Rs. 1,86,96,356/- u/s 40(a)(ia) of the Act by the AO holding that the assessee has failed the mandatory condition of submission of Form 26A to ; the Director General of Income Tax (System) through due procedure as prescribed in section 201 (1) of the Act, 1961 read with Rule 31ACB of Income Tax Rule, 1962.

(ii) The Ld. CIT(A), on facts and circumstances of the case, has erred in holding that mere non-filing of the Form 26Abfifore the Director General (System), the appellant should not be held as in default with Rule 31 ACB, when furnishing of Form 26A by die assessee to the Director General of income Tax (System) in accordance with the procedures, formats and standards specified in order sub-rule(2) of Rule 31 ACB, is a mandatory condition for not being treated as assessee in default.

(iii) That the Ld. CIT(A.) has erred in deleting the disallowance made of Rs. 2,09,78,997/- u/s 14A r.w. Rule 8D by the AO without appreciating the facts of the case.

(iv) That the Id. CIT(A), on the facts and circumstances of the case has erred in deleting the disallowance made of Rs. 2,09,78,997/- without considered the fact mat the assessee has not taken interest component into its account as required under role 8D of