2021 (2) TMI 285 - 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 - Whether Tribunal was right in holding that there is no delay in filing of e-appeal since the date of filing of belated e-appeal relates back to the date of filing of manual appeal? - HELD THAT - Issue held in favour of the assessee and against the Revenue in the decision in the case of CIT Vs. A.A.Antony others 2021 (1) TMI 170 - MADRAS HIGH COURT 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 assessee on hand on a technical ground. We make it clear that this observation cannot be taken advantage by the assessee 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. 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 CIT-A on the ground that they were not e-filed within the period of limitation.

Summary

Issues:
Appeal challenging order of ITAT for assessment year 2013-14 - Substantial questions of law raised by Revenue - Condonation of delay in filing e-appeal - Interpretation of IT Rules and Circulars - Comparison with previous judgment - Discretion exercised by Tribunal - Effect of Circular No. 20/2016 on appeals - Dismissal of appeals by Revenue based on tax effect - Length of delay in filing appeals - Decision to dismiss present appeal.

Analysis:
The judgment involves an appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 challenging an order made by the Income Tax Appellate Tribunal (ITAT) for the assessment year 2013-14. The Revenue raised substantial questions of law regarding the condonation of delay in filing e-appeals, interpretation of IT Rules mandating e-appeal filing, and the exercise of discretion by the Tribunal in directing the Commissioner of Income Tax (Appeals) to pass orders on merit despite delay in filing e-appeals.

The Tribunal's decision was influenced by a previous judgment in the case of The Commissioner of Income Tax vs A.A.Antony, where the Tribunal confirmed its order and directed appeals to be heard on merits. The Tribunal considered Circular No. 20/2016 issued by the CBDT, extending the time for filing e-appeals, and emphasized that denying substantive right of appeal on technical grounds should be avoided. The Tribunal highlighted the practical difficulties faced by assessees due to procedural changes and extended the benefit of the Circular to the respondents.

The judgment also addressed the dismissal of appeals by the Revenue based on low tax effect, noting that Circular No. 20/16 played a crucial role in preventing such dismissals. The Revenue argued variations in the length of delay in different cases, but the Tribunal maintained consistency in its approach by considering the prevailing circumstances and the CBDT's intent behind the Circular.

Ultimately, the Tribunal dismissed the present Tax Case Appeal, following the precedent set in the earlier judgment, and answered the substantial questions of law against the Revenue. The appeal was directed to be heard by the Commissioner of Income Tax (Appeals) for a decision on merits. The Tribunal exercised its discretion in favor of the respondents/assessees, emphasizing the one-time nature of the benefit provided by the CBDT and the need to avoid prolonged litigation on the issue of limitation.

In conclusion, the judgment reflects a balanced approach in interpreting the relevant legal provisions, considering the practical challenges faced by taxpayers, and ensuring a fair hearing of appeals on their merits. The decision underscores the importance of upholding substantive rights of appeal while acknowledging the impact of procedural changes on the tax dispute resolution process.