2021 (1) TMI 170 - HC - Income Tax

Non filling of appeal electronically within the period of limitation - prayer made by the assessee to reckoned the date of filing as on date on which the appeal was actually filed - HELD THAT - Taking into consideration the Circular issued by CBDT, which in our opinion, appears to be a one time measure, the substantive right of appeal should not be denied to the assessees on hand on a technical ground. However, we make it clear that this observation cannot be taken advantage by the assessees, as of now, when the procedure has been in vogue ever since the year 2016 and stood the test of time and in all probabilities, as of now, all teaching problems would have been solved. Therefore, bearing in mind the fact situation in the year 2016, we are of the view that the appeals need not have been rejected by the CITA on the ground that they were not e-filed within the period of limitation.

Summary

Issues:
- Whether delay in e-filing of appeals by the assessee can be condoned.
- Whether the Circular No.20/2016 extending the time limit for e-filing appeals applies.
- Whether the Tribunal was correct in allowing the appeals filed by the assessee.

Analysis:
1. The appeals were filed under Section 260A of the Income Tax Act against the orders passed by the Income Tax Appellate Tribunal. The key issue in all appeals was the delay in e-filing by the assessee and whether such delay could be condoned. The Tribunal allowed the appeals based on a decision of a co-ordinate bench, which held that the delay could be condoned.

2. The Circular No.20/2016 extended the time limit for e-filing appeals due to technical issues faced by taxpayers and the tax department. The Circular aimed to mitigate inconvenience caused by mandatory e-filing. The Court considered the representations received and extended the period for e-filing appeals until 15.06.2016, treating such e-appeals as filed within time.

3. In the lead case, the assessee manually filed the appeal before the assessment order was passed, followed by e-filing within the extended period. The Court noted that the Circular should be applied to consider the date of e-filing for condonation of delay. The Court emphasized the need for condonation applications even without statutory provisions.

4. The Court highlighted the importance of following the e-filing procedure mandated by Rule 45, especially in cases where technical issues were faced initially. The Court opined that the substantive right of appeal should not be denied on technical grounds, considering the circumstances prevailing at the time of e-filing.

5. The Court rejected the Revenue's appeals, noting the fact situation and the one-time nature of the Circular's extension. The Court emphasized that directing the assessees to refile appeals with condonation applications would be harsh and could lead to further litigation on limitation issues. The Court upheld the Tribunal's decision in favor of the respondents/assessees.

6. The Court dismissed the Revenue's appeals but left the Substantial Questions of Law open for consideration. No costs were awarded in the judgment. The decision was based on the specific facts and circumstances of the cases, considering the technical challenges faced during the initial implementation of e-filing procedures.