SBI Cannot Escape Tax Implication On Grounds Of Change Of Branch Manager: ITAT Refuses To Condone The Delay In Filing Appeal

The two-member bench of George George K. (Judicial Member) and Laxmi Prasad Sahu (Accountant Member) has observed that the assessee must be well aware of the tax implications. It is the duty of the responsible officer to comply with the notices. The bank's books of accounts are audited by the CA along with the internal auditors. The assessee cannot escape by giving the reason merely as a change of branch manager.

The Additional Commissioner of Income Tax has passed the penalty order under section 271C of the Income Tax Act. An appellate order was passed by the Commissioner of Income Tax (Appeals) and it was uploaded on the Income Tax portal. The Branch intended to prefer an appeal before the Income Tax Appellate Tribunal, Bangalore, against the Commissioner of Income Tax (Appeals) order. The delay in filing an appeal before the Income Tax Appellate Tribunal, Bangalore was caused by a change in manager.

The appellant/assessee submitted that the delay may be condoned and the appeal of the Branch be admitted before the Tribunal in the interest of equity and the advancement of justice.

The assessee submitted that there was a sufficient reason for not filing the appeal within the time frame, which has been explained by the concerned authorities by way of affidavits. The CIT (A) order was received by the earlier responsible officer and he was later transferred out. Therefore, the appeal could not be filed within the due date. The issue is covered under section 273B and he requested that the matter be heard on the merits of the case. The penalty imposed by the department under section 271C is not applicable to the assessee.

The department contended that the assessee had not provided complete details in the affidavit. The succeeding manager should have followed the matter and the lame excuse that the appeal was unnoticed by the manager is not acceptable since SBI is a leading bank. It is always well aware of the rules and regulations. 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. The reason explained by the assessee in the condonation petitions is too general. It does not explain the delay except to state that the delay was due to the transfer of the concerned officers in the respective branches with whom the papers were pending for preparation of the appeals.

"Though there was a COVID-19 issue starting from March 2020, the Hon'ble Supreme Court, suo moto writ petition No.03/2020 along with M.P 21/2022, has held that the period from 15/3/2020 till 28/02/2022 shall stand excluded for the purpose of period of limitation as may be prescribed under any general or special laws in respect of quasi-judicial and judicial proceedings." Even after excluding the CVOID period, the appeal filed by the assessee is "beyond the due date as prescribed in the provisions," the ITAT noted.

The tribunal held that the assessee had not sufficiently explained its bonafide mistake. The assessee will not benefit from section 273B. The assessee should be well aware of the statutory provisions and the period of limitation and should pursue its remedies diligently.

"The assessee cannot expect their appeals to be entertained because they are after all the Bank, notwithstanding the facts that the delay is not sufficiently explained, Hence, the delay is not condoned and the appeal is unadmitted," the ITAT said.

Case Title: State Bank of India versus The Income Tax Officer,

Citation: ITA No.330/Bang/2022

Dated: 19.07.2022

Counsel For Appellant: C.A. Ragavendra Chakravarthy

Counsel For Respondent: Addl.DIT (DR) Narayana K.R

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