2019 (3) TMI 1113 - AT - Income Tax

Mandation of e-filling of appeal - appeal manually filed by the assessee though he was supposed to e-file the appeal even though period for filing the appeal electronically before learned CIT(A) till 15th June, 2016 extended - HELD THAT - There is no quarrel that the tax-payers are bound to follow procedures prescribed by authorities in fulfilling their obligations under the 1961 Act read with 1962 Rules otherwise there will be breakdown of Rule of Law. It is well settled that Rule of Law is engrained in basic structure of our constitution. But at the same time procedures are meant to advance justice and not to stifle the same. The new system of e-filing of appeals before learned CIT(A) were introduced by Revenue only wef 01.03.2016 and the assessee filed his appeal before learned CIT(A) on 12.04.2016 manually but the said appeal was filed within time limit prescribed u/s 249(2) of the 1961 Act. The CBDT extended deadline for efiling of appeal before learned CIT(A) to 15.06.2016 , vide circular 20 of 2016 dated 26.05.2016. The assessee still did not e-filed its appeal before learned CIT(A). It is claimed that the assessee was not aware of the amended procedure for e-filing of appeals. CIT(A) dismissed assessee s appeal on this short ground of not filing of appeal electronically . CIT(A) did not decide any issue raised by the assessee in his appeals on merits. Under these facts and circumstances of the case , we are of the considered view that liberal approach is required to be taken to advance justice as the procedure are handmade to advance justice. When technicalities are pitted against justice, the courts will lean towards advancement of justice. It could not be shown by Revenue that the assessee acted in defiance of law deliberately . Thus, we are setting aside all the issue s arising in this appeal to the file of the Ld. CIT(A) to adjudicate all the issue s raised by assessee on merits in accordance with law. - Appeal of the assessee is allowed for statistical purposes

Summary

Issues Involved:
1. Confirmation of addition under Section 68 of the Income Tax Act.
2. Confirmation of addition on account of house property.
3. Confirmation of initiation of penalty proceedings under Section 271(1)(C).
4. Confirmation of interest charges under Sections 234A, 234B, and 234C.
5. Admissibility of manually filed appeal instead of e-filing.

Detailed Analysis:

1. Confirmation of Addition under Section 68 of the Income Tax Act:
The assessee contested the addition of ?15,40,500/- as cash income from agricultural land to their income. The CIT(A) confirmed this addition, which the assessee found unjustified and arbitrary. The tribunal did not delve into the merits of this issue as the appeal was dismissed on technical grounds by the CIT(A).

2. Confirmation of Addition on Account of House Property:
The assessee also challenged the addition of ?9,72,701/- related to house property income. This addition was confirmed by the CIT(A) and deemed unjustified and arbitrary by the assessee. Again, the tribunal did not address this issue on its merits due to the procedural dismissal by the CIT(A).

3. Confirmation of Initiation of Penalty Proceedings under Section 271(1)(C):
The assessee argued against the initiation of penalty proceedings under Section 271(1)(C). The CIT(A) upheld the initiation, which the assessee found erroneous. The tribunal did not provide a detailed analysis of this issue due to the procedural grounds on which the appeal was dismissed.

4. Confirmation of Interest Charges under Sections 234A, 234B, and 234C:
The assessee disputed the interest charges levied under Sections 234A, 234B, and 234C, labeling them arbitrary. The CIT(A) confirmed these charges. The tribunal did not examine this issue on its merits due to the procedural dismissal.

5. Admissibility of Manually Filed Appeal Instead of E-filing:
The primary issue was the dismissal of the appeal by the CIT(A) on the grounds that it was manually filed instead of being e-filed as mandated by Rule 45 of the Income-tax Rules, 1962, effective from 01.03.2016. The assessee filed the appeal manually on 12.04.2016, within the time limit prescribed under Section 249(2) of the Income Tax Act, but failed to e-file even within the extended deadline of 15.06.2016 as per CBDT Circular No. 20/2016.

The tribunal observed that the e-filing system was newly introduced and the assessee claimed unawareness of this requirement. It emphasized that procedures are meant to advance justice and not to stifle it. The tribunal cited various judgments, including those of the Hon’ble Supreme Court and other cases where the courts favored substantial justice over technicalities.

The tribunal decided that a liberal approach was necessary to advance justice. It set aside all issues to the file of the CIT(A) for adjudication on merits, directing the assessee to e-file the appeal within 10 days of receiving the tribunal's order. The CIT(A) was instructed to admit and adjudicate the issues raised by the assessee on merits, ensuring the assessee is provided with an opportunity to be heard.

Conclusion:
The tribunal allowed the appeal for statistical purposes, restoring the matter to the CIT(A) for re-adjudication on merits after the assessee complies with the e-filing requirement. This decision underscores the principle that procedural technicalities should not impede the delivery of substantial justice.