BIKANER DISTRIBUTORS P.LTD.,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3, JAIPUR

PER BENCH :

These seven appeals by the assessee are directed against the composite order of ld. CIT (A)-4, Jaipur dated 2nd July, 2018 for the assessment years 2008-09

to 2014-15. The assessee has raised the common grounds in these appeals except

quantum of addition varies from year to year. The ground raised by the assessee for

the assessment year 2008-09 are reproduced as under :-

“ 1. The ld. CIT (A) erred in lawas well as on the facts of the present case in not admitting the appeal holding it to be defective though the same was duly filed manually without any objection raised and, therefore, the order of the ld. CIT (A) is bad in law and on the facts and hence the same may please be quashed.

2 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.

appeal manually and therefore, there was serious violation of principle of natural justice and hence, now hearing is prayed to be allowed.

of e-filing. These seven appeals are arising from the assessment orders passed

under section 143(3) read with section 153A of the IT Act and thereafter the

assessee filed the manual appeals before the ld. CIT (A). Since the ld. CIT (A) has

dismissed the appeal in limine by treating the same as not maintainable for want of

e-filing, therefore, first we take up the issue raised in ground nos. 1 to 3 of the

appeal which is common for all the appeals.

3 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.

2016 and consequently the appeals were filed before the ld. CIT (A) within the period of limitation on 21st April, 2016 as the limitation for filing the appeal was to be expired on 26th April, 2016. The appeals filed by the assessee manually were taken up for hearing by the ld. CIT (A) on 21st June, 2018. The ld. CIT (A) without

giving an opportunity to the assessee to rectify the defect of not filing the appeals

electronically dismissed all the appeals in limine. Thus the ld. A/R has submitted that

there is a gross violation of principles of natural justice and the assessee was not

given an opportunity to remove the defect on account of e-filing of the appeals. He

has further submitted that since the amendment in the Rule 45 of IT Rules was

brought into Statute on 01.03.2016, therefore, the appeals filed by the assessee

were just after the amendment and due to bonafide and inadvertent mistake the

assessee filed the appeals manually. The ld. A/R has thus contended that the

impugned order passed by the ld. CIT (A) may be set aside and the assessee may

be allowed to e-file the appeals and the appeals of the assessee may be directed to

be decided by the ld. CIT (A) on merits. In support of his contention, he has relied upon the decision of this Tribunal dated 12th July, 2018 in case of Kailash Chand Jat

vs. ACIT in ITA No. 373/JP/2018 and submitted that the Tribunal in an identical case

has treated the appeals filed without e-filing and in non-compliance of Rule 45 of IT

Rules as defective and, therefore, the assessee ought to have been given an

opportunity to remove or rectify the defect in the appeals. The Tribunal has

accordingly set aside the order of the ld. CIT (A) and remanded the matter with the

direction to the assessee to e-file the appeal and then decide the appeal on merit. The ld. A/R has also relied upon the decision dated 16th May, 2018 of Mumbai

Benches of the Tribunal in case of Asterix Reinforced Ltd. vs. ITO in ITA No.

4 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.

426/M/2018 and submitted that the Mumbai Tribunal has considered an identical

issue and held that the appeal of the assessee cannot be dismissed for want of filing

of the appeal in electronic mode as the matter ought to have been decided on merits

instead of technical reasons. Hence the ld. A/R has pleaded that the impugned

order of the ld. CIT (A) may be set aside and the matter may be remanded to the ld.

CIT (A) for deciding the appeals on merits.

in the appeals but the appeals not filing in compliance to Rule 45 of the IT Rules are

not maintainable and valid appeals, therefore, the appeals were dismissed being not

maintainable. He has supported the order of the ld. CIT (A).

record. At the outset, we note that the ld. CIT (A) has recorded the facts regarding

filing of the appeals that the assessee filed the seven appeals arising from the

assessment orders passed under section 143(3) read with section 153A of the IT Act dated 22nd March, 2016. All these seven appeals were filed within the period of limitation on 21st April, 2016. The appeals were taken up for hearing on 21st June,

2018. However, there was no notice or show cause notice given to the assessee by

the ld. CIT (A) before dismissing the appeals by treating the same as not

maintainable for want of e-filing. Therefore, we find that dismissal of the appeals

without giving an opportunity to the assessee to remove the defect and to file the

appeals electronically amounts to violation of principles of natural justice. Further,

once the appeals filed manually were taken up for hearing, then even if there was a

defect on account of non-filing of the appeals electronically, the assessee ought to

have been granted an opportunity to remove the defect. Though there may be a

5 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.

question of delay due to late filing of the appeals electronically, however, once the

appeals were filed manually within the period of limitation, then the subsequent

filing of the appeals electronically can be taken up by considering the fact that it was

not a delay for taking the steps but it was only a defect in filing the appeals. It is

also relevant to note that the amendment in Rule 45 of the IT Rules was brought

into Statute with effect from 01.03.2016 and, therefore, this is the first year of the

amendment requiring e-filing of the appeal and hence the non-filing of the appeal

electronically cannot be considered as a defect so fatal to straight-away dismiss the

appeal without giving an opportunity to remove the said defect. This Bench has

considered an identical issue in case of Kailash Chand Jat vs. ACIT (supra) in para 4

as under :-

“4. We have considered the rival submissions as well as relevant material on record. At the outset we note that the appeal filed by the assessee (manually) was duly taken up for hearing by the ld. CIT(A) and after hearing the representative of the assessee Shri K.L. Choudhary, C.A. the ld. CIT(A) has finally dismissed the appeal on the ground of non maintainability in paras 3.1.1, 3.1.2 & 4 as under:-

“3.1.1 I have considered the assessment order, submission made by the appellant as well as the paper appeal. On perusal of the details, it is observed that this appeal was filed manually in this office on 23.1.2017. As per the provisions of Rule 45 of the IT Rules, 1961, it has been made compulsory/mandatory to e-file the appeal before the CIT(A) w.e.f. 01.03.2016 in respect of persons who are required to furnish return of income electronically. Subsequently, this time limit was extended to 15.06.2016, vide Circular No. 20/2016 (F. No. 279/MISC/M- 54/2016/ITJ dated 26.05.2016). During the appellate proceedings, the ITBA system was checked to verify whether

6 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.

the appellant has filed the appeal electronically as mandated under Rule 45 of IT Rules. The ITBA verification showed that the appeal has not been filed electronically. 3.1.2 In view of the above facts, it is evidence that the case of the appellant is covered by the provision of section 249 r.w. Rule 45 of IT Rules which lays down that every appeal shall be filed in the prescribed form and shall be verified in the prescribed manner. In this case the appellant had filed the appeal manually and was required to e-file in accordance with Rule 45 of IT Rules for the extended period i.e. 15.06.2016. Since, this appeal has been filed manually, it is defective appeal which is non- maintainable and is being filed. The e-appeal may be taken up separately for adjudication whenever it is filed as per law and existing instruction in force. 4. Thus, this appeal is defective and non-maintainable and is being filed/dismissed. Thus, no adjudication on merit is considered necessary. In the result, the appeal is dismissed on technical grounds being manually filed and hence inadmissible ab-initio.”

Thus, it is clear that the ld. CIT(A) took cognizance of the appeal filed manually though it was defective. Once the appeal filed by the assessee found to be defective because non compliance of Rule 45 of the IT Rules, the proper course of action was to allow the assessee to file the appeal through e-filing and then, the appeal so filed by the assessee ought to have been decided on merits. Thus, the appeal of the assessee was dismissed being not maintainable without even issuing any notice or raising such a question of maintainability of the appeal to the assessee. Hence, the order passed by the ld. CIT(A) is in violation of principles of natural justice and consequently not sustainable in law. The Mumbai Benches of the Tribunal in case of M/s All India Federation of Tax Practitioners vs. ITO (supra) while considering the requirement of e-filing has held in para 6 as under:-

“6. We have heard the counsels for both the parties and we have also perused the material placed on record as well as

7 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.

orders passed by the revenue authorities. From the records we noticed that electronically filing of the appeals was introduced for the first time vide rule 45 of I.T. Rules 1962, mandating compulsory e-filing of appeals before appellate Commissioner with effect from 1st March 2016. We noticed that in this respect, there is no corresponding amendment in any of the provisions of the substantive law i.e I.T. Act, 1961. As per the facts of the present case, the assessment in the above case was completed u/s 143(3) of the I.T. Act 1961. However the assessee has filed appeal before Ld. CIT(A) in paper form as prescribed under the provisions of I.T. Act 1961 within the prescribed period of limitation. But the same was dismissed by Ld. CIT(A) by holding that assessee had not filed appeal through electronic form, which is mandatory as per I.T. Rules 1962. After having considered the entire factual position, we find that Hon’ble Supreme Court in the case of ‘State of Punjab Vs.ShyamalalMurari and others reported in AIR 1976 (SC) 1177’ 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. The language employed by the draftsman of procedural law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of Justice. The Hon’ble Apex Court has said in an ‘adversarial’ system, no party should ordinarily be denied the opportunity of participating in the process of Justice dispensation. The Hon’ble Supreme Court in its judgement reported as AIR 2005 (SC) 3304 in the case of ‘RaniKusumVrs. Kanchan Devi,’ reiterated that, a procedural law should not ordinarily be construed as mandatory, as it is always subservient to and is in aid of Justice. Any interpretation, which eludes or frustrates the recipient of Justice, is not to be followed. 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.

8 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.

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 ITA No. 6595/Del/16 in case titled Gurinder Singh Dhillon Vrs. ITO 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 Ld. 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. Keeping in view the facts and circumstances as well as the case laws discussed and relied upon above, we are of the considered view that the cause of Justice would be served in case, we set aside the orders of Ld. CIT(A) & allow the present appeal. While seeking the compliance, we direct the assessee to file the appeal electronically within 10 days from the date of receipt of this order. In case, the directions are followed then in that eventuality, the delay in e-filing the appeal shall stand condoned. Ld. CIT(A) is further directed to consider the appeal filed by the assessee on merits by passing a speaking order. Resultantly, we allow the appeal filed by the assessee.”

In view of the above facts and circumstances of the case, we set aside the impugned order of the ld. CIT(A) and remand the matter to the record of the ld. CIT(A) with direction to the assessee to e-file the appeal. The ld. CIT(A) shall decide the appeal of the assessee on merits. Needless to say the assessee be given an appropriate opportunity before passing a fresh order.”

9 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.

Accordingly, in view of the facts and circumstances of the case when the ld. CIT (A)

has dismissed the appeals without even giving an opportunity of hearing to the

assessee to remove the defect, the impugned order passed by the ld. CIT (A) is not

sustainable and the same is set aside. The matters are remanded to the record of

CIT (A). The assessee is directed to file the appeals electronically within a period of

30 days from the date of this order and the ld. CIT (A) then decide the appeals of

the assessee on merits.

record of the ld. CIT (A) with the direction to the assessee to file the appeals

electronically and then the ld. CIT (Appeals) decide the appeals on merits, ground

nos. 4 to 7 have become infructuous and the same are dismissed as infructuous.

Order is pronounced in the open court on 24/01/2019.

Sd/- Sd/- (foØe flag ;kno) (fot; iky jkWo ½ (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Jaipur Dated:- 24/01/2019. Das/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- M/s. Bikaner Distributors Pvt. Ltd., Bikaner. 2. The Respondent – The DCIT, Central Circle-3, Jaipur. 3. The CIT(A). 4. The CIT, 5. The DR, ITAT, Jaipur 6. Guard File (ITA No. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018)

vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

10 ITA Nos. 1174, 1175, 1176, 1177, 1178, 1179 & 1180/JP/2018. M/s. Bikaner Distributors Pvt. Ltd., Bikaner.