2021 (3) TMI 361 - 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 - As decided in A.A. ANTONY, SHRI K.G. SRINIVASAN, SHRI RAVI PRABAKAR 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. 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:
1. Delay in filing e-appeal by the assessee before CIT(A) and condonation of the delay.
2. Interpretation of rules mandating e-appeal filing and extension of time for filing.
3. Condonation of delay in filing appeal without a petition before CIT(A).
4. Dismissal of appeals by the Revenue based on low tax effect.

Analysis:

Issue 1: Delay in filing e-appeal by the assessee before CIT(A) and condonation of the delay
The Revenue raised questions regarding the delay in filing the e-appeal by the assessee and the Tribunal's decision to remit the case back for disposal on merits. The Tribunal's decision was influenced by a previous judgment in the case of The Commissioner of Income Tax vs A.A.Antony, where it was emphasized that the substantive right of appeal should not be denied based on technical grounds. The Tribunal highlighted the Circular issued by CBDT as a one-time measure and decided in favor of the assessee, emphasizing that the appeals need not have been rejected solely due to not being e-filed within the limitation period.

Issue 2: Interpretation of rules mandating e-appeal filing and extension of time for filing
The Tribunal considered Rule 45 of the IT Rules, which mandated e-appeal filing effective from 1.3.2016, and a Board Circular extending the time for filing e-appeals until 15.6.2016. Despite these rules, the Tribunal exercised discretion in favor of the assessee, citing the unique circumstances prevailing in 2016 and the benefit extended by the CBDT as a one-time measure. The Tribunal emphasized that the benefit of the Circular should be extended to the assessees, leading to the dismissal of appeals filed by the Revenue based on low tax effect.

Issue 3: Condonation of delay in filing appeal without a petition before CIT(A)
The Tribunal addressed the concern of condoning the delay in filing the appeal even though the assessee had not filed any petition for condonation of delay before the CIT(A). The Tribunal, considering the prevailing fact situation and the Circular issued by the CBDT, decided not to entertain the appeals filed by the Revenue. The Tribunal emphasized that adopting a different view would lead to another round of litigation on the issue of limitation, which was deemed undesirable.

Issue 4: Dismissal of appeals by the Revenue based on low tax effect
The Tribunal noted that all the appeals filed by the Revenue would have been dismissed on the ground of low tax effect if not for the application of Circular No. 20/16. Despite the Senior Standing Counsel's submissions regarding the substantial delay in some cases, the Tribunal maintained its decision based on the prevailing fact situation and the benefit extended by the CBDT through the Circular.

In conclusion, the Tax Case Appeal was dismissed, and the substantial questions of law were answered against the Revenue. The appeal was directed to be heard by the Commissioner of Income Tax (Appeals) and decided on merits in accordance with the law, with no costs imposed.