Principal Commissioner of In vs. G. SHANTHINI

TCA.No.120 of 2022 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 28.04.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE J. SATHYA NARAYANA PRASAD T.C.A.No.120 of 2022 Principal Commissioner of Income Tax Corporate Ward - 4(1), Chennai - 600 034. ... Appellant Versus G.Shanthini, Plot No.230/231, Door No.29, First Cross Street, Natesa Nagar, Virugambakkam, Chennai 600 092 ... Respondent PAN BFYPS1008C Prayer : Tax Case Appeal preferred under Section 260A of Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, 'C'(SMC) Bench, Chennai, in I.T.A.No.1441/CHNY/2019, dated 10.12.2019 for the Assessment Year 2013-14. For Appellant : Mr.Karthik Ranganathan Page 1/8 https://www.mhc.tn.gov.in/judis TCA.No.120 of 2022 JUDGMENT (Judgment of the court was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 10.12.2019 passed by the Income Tax Appellate Tribunal, 'C' (SMC) Bench, Chennai, in I.T.A.No.1441/CHNY/2019, relating to the Assessment Year 2013-14, raising the following substantial question of law:- "Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal was right in condoning the delay in e- filing of appeal before Ld. CIT(A) and restoring the issues in appeal back to the file of the Ld. CIT(A) for adjudication on merits, disregarding the Board's Circular No.20/2016 dated 26.05.2016 wherein the Board extended the time limit for filing e- appeal before Ld. CIT(A) only upto 15.06.2016 in accordance with the Rule 45 of the Income Tax Rules, 1962?" 2.According to the appellant / Revenue, for the Assessment Year 2013 – 2014, the respondent / assessee filed her return of income on 24.02.2014 disclosing a total income of Rs.5,49,210/-, which was processed under Section 143(1) and notice under section 143(2) came to be issued on her. Subsequently, notice under section 142(1) was issued calling upon the assessee to furnish certain details. Thereafter, the assessing officer completed the assessment by making addition of Rs.37,55,190/- as capital Page 2/8 https://www.mhc.tn.gov.in/judis TCA.No.120 of 2022 gains. Challenging the order of assessment, the respondent / assessee preferred an appeal before the Commissioner of Income Tax (Appeals) manually on 24.04.2016. Upon receipt of the same, the CIT(A) issued a show cause notice dated 17.08.2016 calling upon the assessee to explain as to why the appeal cannot be treated as non est in the eyes of law as the appeal was not filed electronically as prescribed under Rule 45 of the Income Tax Rules, 1962. Pursuant to the same, the respondent / assessee filed the appeal electronically on 02.09.2016. The CIT (A) after having found that the appeal was filed with a delay of 123 days, dismissed the appeal in limine in the absence of any explanation for delay occasioned. Aggrieved against such dismissal, the respondent went on further appeal before the Income Tax Appellate Tribunal, which by order dated 10.12.2019, partly allowed the appeal by remitting the matter back to the CIT(A) for denovo adjudication after affording due opportunity of hearing to the assessee in accordance with law. Aggrieved over the same, the appellant / Revenue is before this court with this tax case appeal. 3.When the matter was taken up for consideration, the learned counsel for the appellant / Revenue submitted that the issue involved in this case has already been considered and decided in favour of the assessee by judgment Page 3/8 https://www.mhc.tn.gov.in/judis TCA.No.120 of 2022 dated 18.12.2020 passed in TCA.Nos.432, 433 and 436 of 2020, the relevant passage of which, is usefully extracted hereunder: "5. The procedure 'e-filing' of the appeals came into force with effect from 01-03-2016. As experienced by the Registry of this Court, when the Registry had permitted e-filing of cases, there were several technical issues faced by the Registry as well as the litigants and their respective counsels. Therefore, reasonable time has to be given for the system to settle down and the persons manning the system to get acquainted with the process of e-filing. In all probabilities, the Income-tax Department also faced such a situation, which necessitated Central Board of Direct Taxes to issue Circular No.20/2016, which reads as follows:- "Rule 45 of the Income-tax Rules, 1962, mandates compulsory e-filing of appeals before Commissioners of Income-tax (Appeals) with effect from 1-3-2016 in respect of persons who are required to furnish return of income electronically. It has come to the notice of the Central Board of Direct Taxes (hereinafter referred to as the Board) that in some cases the tax payers who were required to e-file Form 35, were unable to do so due to lack of knowledge about e-filing procedure and/ or technical issues in e-filing. Also, the EVC functionality for verification of e-appeals was made operational from 12.05.2016 for individuals and from 19-05-2016 for other persons. Word limit for filing grounds of appeal and mapping of jurisdiction of Commissioners of Income-tax (Appeals) were also a cause of grievance in some cases. 2. The matter has been examined by the Board. While the underlying issues relating to e-filing of appeals have since been addressed and resolved, in order to mitigate any inconvenience caused to the tax payers on account of the new requirement of mandatory e-filing appeals, it has been decided to extend the time limit for filing of such e-appeals. E-appeals which were due to be filed by 15-5-2016 can be filed upto 15-6-2016. All e-appeals filed within this extended period would be treated as appeals filed in time. 3. In view of the extended window for filing e-appeals, taxpayers who could not successfully e-file their appeal and had filed paper appeals are required to file an e-appeal in accordance with Rule 45 before the extended period i.e., 15-6-2016. Such e-appeals would also be treated as appeals filed within time." Page 4/8 https://www.mhc.tn.gov.in/judis TCA.No.120 of 2022 6... 7... 8. The order of assessment was passed on 31-3-2016 and the assessee had filed the appeal manually on 19-4-2016. Subsequently, the Department had issued show cause notice on 17-8-2016, much prior to issuance of show cause notice, the assessee e-filed the appeal on 2-8-2016. Thus, if the Circular No.20/2016 is applied, the time stood extended till 15-6-2016 for e-filing the appeals and if the said date is reckoned, then, the CITA should take into consideration the date of e-filing, namely, 2-8-2016 and examined whether the assessee had sufficient cause for not being able to e-file appeal earlier, i.e., within the extended time up to 15-6-2016. However, for certain reasons assigned in the order, the CITA has dismissed all the appeals. 9. Mr.Karthik Ranganathan, learned counsel for the appellant is right in his submission that even without an application for condonation of delay, the delay could not have been condoned and assuming that the Tribunal was satisfied that a statutory right of appeal should not be foreclosed on technical grounds, ought to have remanded the matter to the CITA, with a direction to the assessee to file an application for condonation of delay to be considered on merits and in accordance with law. Thus, while seeking to sustain the order passed by the CITA and submitting that once the Rules have been amended and e-filing has been made mandatory, the assessee was bound to follow the same and the question of dispensing with such procedure cannot arise. 10. As observed earlier, the procedure which is to be adopted while seeking for condonation of delay, by applying the principles under Section 5 of the Limitation Act, party pleading for condonation, should place on record by way of affidavit or otherwise as to why the delay had occasioned. 11... 12. 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 assessees on hand on a technical ground. However, we make it clear that his observation cannot be taken advantage by the assessees, 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. 13. One more aspect which we had noted is that in the case of assessee in T.C.A.No.433 of 2020, the order of assessment was passed on 31-3-2016, limitation for filing the appeal before the Page 5/8 https://www.mhc.tn.gov.in/judis TCA.No.120 of 2022 CITA would expire on 30-4-2016 and an appeal filed beyond the said period was time barred. However, if Circular No.20/2016 is made applicable, then, the time limit for filing the e-appeals stood extended upto 15-6-2016 and even going by the date for verification of e-appeals, it was made operational on 12-5-2016 for individuals, both these dates are well beyond the period of limitation in the case on assessee in T.C.A.No.433 of 2020. 14. Mr.Karthik Ranganathan, learned Standing Counsel for the Revenue had submitted that the assessees may be sent back to the CITA to file an application for condonation of delay and the CITA may be directed to consider the same in accordance with law. 15. We are of the view that if we are to direct the assessees to adopt such a procedure, as argued by the learned standing counsel, it would be very harsh on the assessees, especially when the appeals are of the year 2016-2017 and even assuming if it is done, the contention which were advanced before us by Mr.A.S.Sriraman, learned counsel for the assessee would be once more again advanced before the CITA and ultimately, lead to another round of litigation on the issue of limitation alone, which we feel should not happen. 16. That apart, as observed earlier, the reprieve given to the assessee by the CBDT appears to be a one time measure and the benefit can be extended to the respondents/ assessees and we find that there is no error committed by the Tribunal in exercising discretion in favour of the respondents/ assessees. 17... 18... 19... In the light of the above, we are not inclined to entertain the appeals filed by the Revenue, which are accordingly dismissed, but, we leave the Substantial Questions of Law open for consideration. No costs." 4. Following the aforesaid judgment, which applies to the facts of the present case, this Tax Case appeal of the Revenue is dismissed, leaving open the substantial questions of law for consideration. No costs. (R.M.D., J.) (J.S.N.P., J.) gba/msr 28.04.2022 Index : Yes / No Page 6/8 https://www.mhc.tn.gov.in/judis TCA.No.120 of 2022 To 1.The Principal Commissioner of Income Tax Corporate Ward - 4(1), Chennai - 600 034. 2.The Income Tax Appellate Tribunal, 'C' (SMC) Bench, Chennai. 3.The Commissioner of Income Tax (Appeals)-9 Chennai. Page 7/8 https://www.mhc.tn.gov.in/judis TCA.No.120 of 2022 R.MAHADEVAN, J. and J.SATHYA NARAYANA PRASAD, J. gba/msr T.C.A.No.120 of 2022 28.04.2022 Page 8/8 https://www.mhc.tn.gov.in/judis