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Facts
The assessee filed an appeal with the CIT(A) which was denied due to a delay of 1954 days. The assessee claimed the delay was due to a transition from physical filing to e-filing, which was a procedural change mandated by the CBDT.
Held
The Tribunal held that while the evidence of physical filing was not presented to the CIT(A), the transition to e-filing was an administrative reform. Procedural technicalities should not prevent substantial justice, especially considering the principles of natural justice and the CBDT's circular.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned, considering the transition from physical to e-filing, and whether the CIT(A) erred in not considering the appeal on merits.
Sections Cited
Section 147, Section 148, Section 249(2), Rule 45, Rule 29
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Income Tax Appellate Tribunal, SURAT BENCH “SMC” SURAT
Before: SHRI SANDEEP GOSAIN & SHRI OM PRAKASH KANT
ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 02.07.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2011-2012, raising following grounds:
1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in not condoning the delay in filing of appeal before learned CIT(A).
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in dismissing the appeal without passing speaking order.
3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of the Ld. Assessing Officer in reopening assessment u/s. 147 by issuing notice u/s. 148 of the I.T. Act, 1961.
4. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of the Ld. Assessing Officer in making addition of Rs. 10,76,447/- on account of alleged unexplained cash credit on substantive basis.
On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of the Ld. Assessing Officer in making addition of Rs. 4,08,482/- on account of alleged unexplained cash credits on protective basis.
At the very threshold, the learned Counsel for the assessee submitted that the learned Commissioner of Income-tax (Appeals) has not admitted the appeal denying condonation of alleged delay of 1954 days in filing before him. I t was submitted there was no delay in filing the appeal before him. The explanation tendered was that the assessee had initially filed the appeal in physical form, as was the prevailing procedure at that time. However, pursuant to the change in procedural law brought about by the CBDT’s notification mandating e-filing of appeals (vide CBDT Circular No. 20/2016 dated 26.05.2016, read with Rule 45 of the Income-tax Rules, 1962, as amended), the assessee subsequently filed the appeal again in the electronic format. The learned Counsel, therefore, contended that there was no real delay in the institution of the appeal and that the time taken in transition from physical filing to e-filing ought to be treated as a procedural delay arising out of bona fide belief and administrative evolution of the appellate procedure.
2.1 The assessee placed on record a Paper Book comprising pages 1 to 52 and 53 to 70, and specifically drew our attention to page 53, which, according to the learned Counsel, evidences the filing of the appeal in physical mode on 03.12.2018. It was submitted that the assessment order was passed on 31.10.2018, served upon the assessee on 03.11.2018, and therefore, the appeal filed on 03.12.2018 was well within the statutory period of limitation prescribed under section 249(2) of the Act.
2.2 The learned Departmental Representative, however, invited our attention to the findings of the learned CIT(A) recorded in paragraph 2 on page 20 of the impugned order, wherein it has been categorically observed that no acknowledgement or proof of physical filing of appeal dated 30.11.2018 or 03.12.2018 was produced before him. The document now relied upon by the assessee and forming part of page 53 of the Paper Book is, therefore, an additional piece of evidence sought to be introduced for the first time before this Tribunal. 2.3 The learned Counsel for the assessee, in all fairness, conceded that such evidence was indeed not furnished before the learned CIT(A) and requested that the said document be treated as additional evidence in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. He submitted that the matter may be restored to the file of the learned CIT(A) for verification of the factual position regarding the filing of the physical appeal and for adjudicating the issue of condonation of delay in the light of the additional material and the CBDT’s procedural framework.
We have carefully considered the rival submissions, examined the record, and duly appreciated the peculiar circumstances attending the case. It is an admitted position that the evidence in support of the filing of the physical appeal was not before the first appellate authority. The document now sought to be relied upon, therefore, constitutes additional evidence within the meaning of Rule 29 (supra). In our opinion where substantial justice so demands, procedural technicalities should not come in the way of fair adjudication.
3.1 Further, the CBDT itself, through Circular No. 20/2016 (supra), recognized the transition from manual to electronic filing as an administrative reform, not intended to deprive any litigant of the right of appeal on account of technical lapses or procedural misunderstandings during the transitional phase. In keeping with this benevolent intent, such procedural confusion or bona fide omission ought not to result in denial of justice. 3.2 In view of the above, and considering the principles of natural justice as enunciated by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Others [1987] 167 ITR 471 (SC), where it was held that substantial justice must prevail over technicalities, we are of the considered opinion that the ends of justice would be met if the matter is restored to the file of the learned CIT(A). The learned CIT(A) shall verify the factual correctness of the assessee’s claim regarding the filing of the physical appeal and adjudicate the issue of condonation of delay afresh in light of such verification and applicable law. 3.3 Should the learned CIT(A) be satisfied with the assessee’s explanation and condone the delay, he shall proceed to decide the appeal on merits, in accordance with law, after affording due opportunity of being heard to the assessee. 3.4 In the result, Ground No. 1 of the assessee’s appeal stands allowed for statistical purposes, and the remaining grounds, being consequential and academic at this stage, are not adjudicated upon.
In the result, the appeal of the assessee is allowed for statistical purposes.