2020 (1) TMI 1129 - AT - Income Tax

Delay in filing the appeal electronically - condonation of delay in filing appel before CIT(A) - According to D.R., the assessee filed the appeal electronically only after the CIT(Appeals) disposed of the appeal by the impugned order - Appeal was filed manually within the period of limitation - HELD THAT - when the assessee has a substantial right of appeal under Section 246A of the Act, such a right cannot be taken away so lightly merely because there was a violation of procedural aspect in the form of filing appeal. Sofar, the assessee was permitted to file appeal in manual / paper form. Now the Department switched over to electronical format for filing the appeal. This is the transition stage. There may be a misunderstanding in filing the appeal whether the appeal has to be filed electronically or manually. This Tribunal is of the considered opinion that whatever may be the reason for filing appeal manually, now the assessee filed the appeal electronically on 25.07.2019. Therefore, even the procedure of filing of appeal electronically has been complied with by the assessee. Therefore, throwing the assessee out of court by saying that the appeal was not filed electronically may not be justified at all. The assessment proceeding before AO and the CIT(Appeals) is a judicial proceeding as provided under Section 136 of the Act. Moreover, the very object of proceeding before the income-tax authorities is to compute the taxable income, levy tax thereon as per the law and collect the same as per the procedure prescribed for collection of tax. Therefore, merely on technicalities, the Government cannot retain a single pie of taxpayer which is not authorized by law. In this case, an effective appeal remedy is provided u/s 246A therefore, merely because there was a technical flaw or violation of not filing the appeal initially by electronically which was admittedly complied by the assessee subsequently on 25.07.2019, this Tribunal is of the considered opinion that the appeal of the assessee cannot be thrown away. At the best, we may say that there is a delay in filing the appeal electronically as provided under Rule 45. By keeping the law laid down by Apex Court in Collector, Land Acquisition 1987 (2) TMI 61 - SUPREME COURT provisions of the Constitution for levy and collection of taxes and the transition period the taxpayers and the Department are passing through, this Tribunal is of the considered opinion that the delay in filing the appeal electronically has to be condoned. Accordingly, the delay in filing the appeal electronically is condoned and the impugned order of the CIT(Appeals) is set aside and the entire issue raised by the assessee is remitted back to the file of the CIT(Appeals) for consideration on merit.

Summary

Issues:
Delay in filing the appeal before the Tribunal and the requirement of electronic filing of appeal before the Commissioner of Income Tax (Appeals) under Rule 45 of Income-tax Rules, 1962.

Analysis:

Issue 1: Delay in filing the appeal before the Tribunal

The assessee filed an appeal against the order of the Commissioner of Income Tax (Appeals) after a delay of 52 days. The assessee sought condonation of the delay, which was granted by the Tribunal after finding sufficient cause for the delay. The appeal was admitted despite the delay.

Issue 2: Requirement of electronic filing of appeal before the Commissioner of Income Tax (Appeals)

The dispute arose when the Commissioner of Income Tax (Appeals) dismissed the appeal filed by the assessee on the grounds that filing the appeal electronically was mandatory under Rule 45 of Income-tax Rules, 1962. The Departmental Representative argued that since the appeal was filed manually before being filed electronically, there was no valid appeal pending before the Commissioner of Income Tax (Appeals).

Detailed Analysis:

The Tribunal considered Section 249 of the Income-tax Act, 1961, which provides for the form of appeal and limitation before the Commissioner of Income Tax (Appeals). Rule 45 of Income-tax Rules, 1962 mandates electronic filing of appeals in Form 35 for assesses required to furnish returns electronically. However, assesses filing returns manually have the option to file appeals either manually or electronically.

The Tribunal deliberated on the conflict between substantive justice and technicality. Citing the Apex Court's judgment in Collector, Land Acquisition v. MST. Katiji, the Tribunal emphasized the importance of substantial justice over technical considerations. It noted that the right to appeal under Section 246A of the Act is a substantive right and should not be denied due to procedural lapses.

The Tribunal highlighted that the transition from manual to electronic filing may have caused confusion for the assessee. It underscored that the judiciary's role is to remove injustice and ensure substantial justice. Therefore, the Tribunal opined that the delay in filing the appeal electronically should be condoned, setting aside the Commissioner of Income Tax (Appeals) order and remitting the issue back for consideration on merit.

In conclusion, the Tribunal allowed the appeal filed by the assessee, emphasizing the importance of substantive justice and the need to consider the transition period for electronic filing.