2021 (10) TMI 558 - AT - Income Tax

Condonation of delay - delay of 366 days in filing the present appeal - sufficiency of cause for filing the appeals belatedly - HELD THAT - As regards the sufficiency of cause for filing the appeals belatedly, it is settled principles of law that the Courts have to take liberal approach while interpreting the expression sufficient cause for condonation of delay. In case of Collector, Land Acquisition Vs. Mst. Katiji 1987 (2) TMI 61 - SUPREME COURT considering the matters for condonation of delay, the law must be applied in a meaningful manner which subserves ends of justice and technical considerations should not come in the way of cause of substantial justice. There is no quarrel that the explanation and reasons explained for delay must be bonafide and not merely a device to cover an ulterior purpose such as laches on the part of the litigant or an attempt to save limitation in the underhand way. If we apply the settled principles as laid down by the Hon ble Supreme Court as well as other courts on the facts of the present case we find that the assessee has explained cause of delay, therefore, in the facts and circumstances of the case, we condone the delay of 366 days in filing the present appeal and admit the appeal for hearing. Non filing of E-appeal - mandatory requirement of e-filing of appeal have not been fulfilled by the assessee - appeal filed manually was not treated as valid appeal - HELD THAT - We find that Hon ble Supreme Court in the case of State of Punjab Vs. Shyamalal Murari and others 1975 (10) TMI 105 - SUPREME COURT has categorically held that courts should not go strictly by the rulebook to deny justice to the deserving litigant as it would lead to miscarriage of justice. It has been reiterated by the Hon ble Supreme Court that all the rules of procedure are handmaid of Justice. From the facts of the present case, we gathered that the assessee had already filed the appeal in paper form, however only the e-filing of appeal has not been done by the assessee and according to us, the same is only a technical consideration. In this respect, we rely upon the judgement of Hon ble Supreme Court, wherein the Hon ble Supreme Court has reiterated that if in a given circumstances, the technical consideration and substantial Justice are pitted against each other, then in that eventuality the cause of substantial Justice deserves to be preferred and cannot be overshadowed or negatived by such technical considerations. Apart from above we have also noticed that the Coordinate Bench of Hon ble ITAT Delhi Bench in appeal in case titled Gurinder Singh Dhillon 2017 (4) TMI 1359 - ITAT DELHI had restored the matter to the file of Ld. CIT(A) under identical circumstances with a direction do decide appeal afresh on merit, after condoning the delay, if any. Since in the present case, we find that appeal in the paper form was already with CIT(A), therefore in that eventuality the Ld. CIT(A) ought not to have dismissed the appeal solely on the ground that the assessee has not filed the appeal electronically before the appellate Commissioner.

Summary

Issues Involved:
1. Validity of the order under sections 201(1) and 201(1A) of the Income Tax Act.
2. Rejection of the manual appeal due to non-compliance with mandatory e-filing requirements.
3. Sustaining the demand raised by the Assessing Officer (A.O.) for short deduction or non-deduction of TDS on interest.
4. Condonation of delay in filing the appeal.

Detailed Analysis:

1. Validity of the Order under Sections 201(1) and 201(1A):
The assessee challenged the validity of the order dated 06.03.2017 under sections 201(1) and 201(1A) of the Income Tax Act on the grounds of jurisdiction and other reasons. The Tribunal noted that the assessment was completed under these sections due to short deduction or non-deduction of TDS on interest payments. The A.O. raised a demand of ?73,628, which included ?46,017 under section 201(1) and ?27,611 under section 201(1A).

2. Rejection of the Manual Appeal:
The CIT(A) dismissed the appeal filed manually by the assessee, citing non-compliance with Rule 45 of the Income Tax Rules, 1962, which mandates compulsory e-filing of appeals before the CIT(A) effective from 1st March 2016. The Tribunal found that the CIT(A) dismissed the appeal solely on this technical ground without considering the merits of the case. The Tribunal emphasized that procedural rules should not override the cause of substantial justice, referencing the Supreme Court's stance that procedural laws are handmaids of justice and should not be construed as mandatory if they hinder the delivery of justice.

3. Sustaining the Demand Raised by the A.O.:
The Tribunal observed that the CIT(A) did not address the merits of the demand raised by the A.O. due to the dismissal of the appeal on technical grounds. The Tribunal highlighted that the assessee had complied with the substantive law by filing the appeal in paper form within the prescribed period of limitation and that the failure to e-file was a technical lapse.

4. Condonation of Delay in Filing the Appeal:
The assessee sought condonation of a 366-day delay in filing the appeal, attributing the delay to procedural requirements and internal processes within the bank. The Tribunal referenced the Supreme Court's judgment in Collector, Land Acquisition v. Mst. Katiji & Others, which advocates a liberal approach towards condonation of delay to serve the ends of justice. The Tribunal found the reasons for the delay to be bona fide and not an attempt to save limitation in an underhand manner. Consequently, the Tribunal condoned the delay and admitted the appeal for hearing.

Conclusion:
The Tribunal set aside the orders of the CIT(A) and directed the assessee to file the appeal electronically within 10 days from the receipt of the Tribunal's order. The CIT(A) was instructed to consider the appeal on its merits and pass a speaking order. The Tribunal's decision to restore the matter to the CIT(A) was not to be construed as an expression on the merits of the dispute, which the CIT(A) was to adjudicate independently.

Outcome:
The appeals for A.Y. 2013-14 to 2016-17 were allowed for statistical purposes, and the matter was remanded to the CIT(A) for a fresh decision on merits after considering the electronically filed appeals. The Tribunal's order was pronounced on 06th October 2021.