SHRI HARSHAD SHANTILAL MEHTA (THROUGH LEGAL HEIR SMT JYOTI H. MEHTA),MUMBAI vs. DCIT, CC-4(1), MUMBAI

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ITA 686/MUM/2023Status: DisposedITAT Mumbai10 May 2023AY 1993-944 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the right of appeal is a statutory right and cannot be denied due to procedural defects, especially when the delay in updating records was on the part of the Department. The assessee cannot be penalized for the Department's inaction.

What were the facts?

The assessee, as the legal heir of a deceased individual, filed an appeal manually due to technical reasons preventing e-filing. The Department had not updated the deceased's records, making electronic filing impossible for the legal heir.

What were the issues?

Whether an appeal filed manually, instead of electronically as mandated by rules, should be dismissed when the assessee faced technical hindrances beyond their control due to the Department's record-keeping delays.

Which sections of the Income-tax Act were involved?

Rule 45 of the Income Tax Rules, 1962

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “H” BENCH

Before: SHRI VIKAS AWASTHY & SHRI AMARJIT SINGHvk-vk-la- 686@eaqcbZ@2023 ¼fu-oa- 1993&94½ Smt. Jyoti Harshad Mehta

Hearing: 10/05/2023Pronounced: 10/05/2023

vihykFkhZ }kjk@Appellant by : Shri Vijay Mehta & Shri Dharmesh Shah izfroknh }kjk@Respondent by : Shri Dr. P. Daniel, Special Counsel lquokbZ dh frfFk@Date of hearing : 10/05/2023 ?kks”k.kk dh frfFk@Date of pronouncement : 10/05/2023 vkns’k/ ORDER

PER VIKAS AWASTHY, JM:

1.

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-52, Mumbai (hereinafter referred to as “the CIT(A)”) dated 09.01.2023, for the assessment year 1993-94.

2.

Shri Vijay Mehta appearing on behalf of the assessee submitted that the CIT(A) has dismissed the appeal in limine, merely for the reason that the assessee has filed the appeal in physical mode and not in electronic form. The Ld. Authorised Representative (AR) submitted that the appeal was filed within the prescribed period of limitation. The assessee could not file appeal in electronic mode because of technical reasons. The Ld. AR explained that this appeal has been filed by the legal heir of Shri Harshad Shantilal Mehta deceased. The assessee had already written to the Assessing Officer (AO) for bringing on record legal heirs of Shri Harshad Shantilal Mehta. The AO has not been able to update the records of the deceased assessee. Since, the name of legal heir has not been updated by the AO in the records of the Department, the present assessee legal heir of Late Shri Harshad Shantilal Mehta was unable to file appeal electronically. Non filing of appeal in electronic mode was for the reasons beyond the control of assessee. The ld. AR submitted that the Hon’ble Madras High Court in the case of CIT vs. Sri Vasavi Gold & Bullion (P.) Ltd., 278 Taxman 352 has held that where because of technical problems in e-filing of the appeal, the assessee can be given benefit of filing manual appeal.

3.

Dr. P. Daniel representing the Department submitted that as per amended provisions, the assessee was required to file appeal electronically whereas, the assessee filed appeal manually. For non-compliance of the prescribed procedure in filing of appeal, the CIT(A) has rightly dismissed the appeal.

4.

We have heard the submissions made by rival sides and have examined the impugned order. It is an undisputed fact that the assessee had filed appeal in physical mode as against electronically mandated in Rule 45 of the Income Tax Rules, 1962. The assessee while filing appeal manually on 02.02.2017, vide letter dated 01.02.2017 had explained the reasons to the CIT(A) for filing appeal in physical mode. The assessee filed appeal in the capacity of a legal heir of the deceased Shri Harshad Shantilal Mehta. The assessee had already furnished the relevant documents before the AO for bringing on record legal heir of Shri Harshad Shantilal Mehta. This fact has not been disputed by the Department. Since, the records have not been updated in computer system by the Income Tax Department, the assessee could not file appeal electronically and was constrained to file appeal in physical mode. Filing of appeal electronically as prescribed under Rule 45 was beyond the control of assessee. Thus, the assessee was compelled to file appeal manually. Right of appeal is a statutory right provided by the Act to an aggrieved assessee. The statutory right of appeal cannot be usurped citing procedural defect. It is trite that rules of procedure are meant as hand made of justice to aid the attainment of justice in an orderly way. It is equally trite that where rules result in injustice, absurdity or travesty of its purpose, deviation can be made from the strict observance of such Rules. Dispensation of justice is of prime importance. In the present case, the delay in updating records in computer system is on the part of Department. The assessee cannot be penalised for inaction or delay in updating records by the Department. The Hon’ble Madras High Court in the case of CIT vs. Sri Vasavi Gold & Bullion (P.) Ltd. (supra) allowed manual filing of appeal before the CIT(A), where the assessee could not file appeal electronically on account of technical hindrances.

5.

Thus, in the peculiar facts of the case, we deem it appropriate to restore the appeal of the assessee to the CIT(A) for fresh adjudication on merits, in accordance with law.

6.

In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose.

Order pronounced in the open court on Wednesday the 10th day of May 2023.

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