AKSHAY RAMPRASAD AGARWAL,MUMBAI vs. INCOME TAX OFFICER, WARD 17(1)(1), MUMBAI, MUMBAI

We heard the rival submissions and considered the documents available on record. The assessee filed its return of income declaring a total income of Rs. 11,77,660/-. Subsequently, the case was selected for scrutiny under CASS, and the assessment was completed by making, inter alia, additions aggregating to Rs. 1,89,25,383/-, comprising an addition of Rs. 1,81,05,449/- under section 68 of the Act on account of unexplained cash credits and Rs. 5,43,164/- towards alleged commission expenditure. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The appeal was filed manually on 19.01.2017 within the prescribed period of limitation. However, the Ld. CIT(A), vide order dated 05.03.2019, dismissed the appeal solely on the ground that it had been filed in physical form instead of electronically, as required under Rule 45 of the Income-tax Rules, 1962. The Ld. CIT(A) observed that CBDT Circular No. 20 of 2016 dated 26.05.2016 had extended the time for mandatory e-filing of appeals only up to 15.06.2016, and since the assessee had filed the appeal manually on 19.01.2017, the same was not maintainable. Thereafter, upon receipt of the said order, the assessee filed an electronic appeal before the Ld. CIT(A) on 10.04.2019 against the same assessment order. The Ld. CIT(A) treated the electronic appeal as being delayed by 802 days and, holding that the delay could not be condoned under section 249 of the Act, dismissed the appeal on the ground of limitation without adjudicating the issues on merits.

The Ld. AR submitted that the assessee had initially filed the appeal manually within the prescribed period of limitation and placed on record a copy of the order dated 05.03.2019 passed by the Ld. CIT(A), whereby the manual appeal was rejected solely on the ground that it had not been filed electronically.

The Ld. DR relied upon the orders of the revenue authorities and supported the impugned order of the Ld. CIT(A).

We have heard the rival submissions and perused the material available on record. It is an undisputed fact that the assessee had filed the appeal before the Ld. CIT(A) in physical form on 19.01.2017, which was within the period of limitation prescribed under section 249 of the Act. The said appeal was rejected only on the technical ground that it had not been filed electronically in accordance with Rule 45 of the Income-tax Rules, 1962. The Ld. CIT(A) observed that CBDT Circular No. 20 of 2016 dated 26.05.2016 had extended the time for mandatory e-filing only up to 15.06.2016, whereas the assessee's manual appeal was filed thereafter. Upon dismissal of the manual appeal, the assessee promptly filed the appeal electronically. The explanation offered by the assessee demonstrates that the delay in filing the electronic appeal was neither deliberate nor intentional, but occurred on account of the bona fide belief that the manual appeal filed within the statutory period was sufficient compliance. In the facts and circumstances of the case, we are satisfied that the assessee had shown sufficient cause for the delay in filing the electronic appeal. The dispute has been dismissed at the threshold on a technical ground without any adjudication on merits. In our considered opinion, such an approach has resulted in denial of a reasonable opportunity to the assessee to contest the additions on merits. In the interest of substantial justice and in consonance with the principles of natural justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) and restore the matter to his file for de novo adjudication. The Ld. CIT(A) is directed to condone the delay in filing the electronic appeal, admit the appeal for adjudication, and dispose of the same afresh in accordance with law after affording the assessee a reasonable and effective opportunity of being heard and after considering all evidences and submissions that may be placed on record. The assessee shall extend full cooperation in the appellate proceedings and shall not seek unnecessary adjournments. We make it clear that we have not expressed any opinion on the merits of the additions, and all issues are left open for fresh adjudication by the Ld. CIT(A). Accordingly, the appeal is allowed for statistical purposes.

In the result, the appeal of the assessee bearing ITA No.2875/Mum/2026 is allowed for statistical purposes. Order pronounced in the open court on 10th day of August 2026.