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Facts
The assessee filed a return of income which was processed. A rectification order disallowed exemption claimed under section 11 due to non-filing of an audit report in Form 10BB. The assessee appealed to the CIT(A), but the appeal was dismissed in limine for not furnishing proof of appeal fee payment, despite the challan details being provided in the appeal form.
Held
The Tribunal held that non-furnishing of the challan was a curable procedural defect, not a substantive non-compliance. The CIT(A) had dismissed the appeal on a technicality without adjudicating on merits. The requirement of appeal fee payment was met, but the proof was not attached.
Key Issues
Whether the dismissal of appeal in limine by CIT(A) for non-furnishing of appeal fee proof was justified when the fee was paid and challan details were provided.
Sections Cited
11, 154, 249(4), 143(1), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH MUMBAI
आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal is directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless
2 ITA No. 7791/Mum/2025 Dilip Vengsarkar Foundation Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”], dated 16.09.2025, passed under section 250 of the Income Tax Act, 1961[hereinafter referred to as “the Act”], for Assessment Year 2024–25, arising from the rectification order dated 19.05.2025 passed under section 154 of the Act by Centralised Processing Centre, Income Tax Department [hereinafter referred to as “CPC”]. Facts of the Case 2. The return of income was filed by the appellant on 25.09.2024 declaring total income of Rs. 33,90,350/-. The return was processed under section 143(1) and intimation dated 29.01.2025 was issued. Subsequently, an order under section 154 dated 19.05.2025 was passed by the CPC. By the said order, exemption claimed under section 11 was disallowed on the ground that the appellant had not e-filed audit report in Form 10BB. The total income was recomputed and addition of Rs. 99,78,704/- was made, resulting in tax demand. The rectification order proceeded on the footing that filing of Form 10BB was mandatory and that the appellant had failed to comply with such requirement. 3. Aggrieved, the appellant preferred appeal before the learned CIT(A). The appeal was instituted on 17.06.2025 against the rectification order dated 19.05.2025 passed under section 154.The learned CIT(A)dismissed the appeal in limine on the ground that proof of payment of appeal fee was not furnished along with Form No. 35 and that despite issuance of deficiency
3 ITA No. 7791/Mum/2025 Dilip Vengsarkar Foundation letter dated 27.08.2025, the defect was not rectified.The learned CIT(A) did not adjudicate the appeal on merits and dismissed the same as defective and not maintainable in law.
Aggrieved by the order of CIT(A), the assessee is in further appeal before us raising following grounds of appeal:
The learned Commissioner of Income Tax (Appeals) erred in dismissing the appeal filed by the appellant in limine on the ground that the proof of having paid appeal fees had not been furnished along with form 35 without appreciating that the details of the challan, evidencing payment of the appeal fees, were duly filled in clause 16 of the appeal form. 2. The learned Commissioner of Income Tax (Appeals) erred in dismissing the appeal in limine on a pure technicality, without permitting an adequate opportunity to the appellant to rectify the defect. 3. The learned Commissioner of Income Tax (Appeals) erred in not appreciating that an appeal process is for the purpose of redressing the grievance of the appellant, and dispensing justice. The procedure to be followed has therefore to be looked at in substance and not in letter. 4. The appellant craves leave to add, alter or amend any of the grounds of appeal at any time before or at the time of hearing. 5. During the course of hearing before us, the learned Authorised Representative (AR)reiterated the facts and submitted that the appeal fee had in fact been paid at the time of filing of appeal before the learned CIT(A), however, the challan evidencing such payment could not be furnished before the learned CIT(A) during the appellate proceedings. The learned AR placed on record a copy of the challan receipt issued by the Income Tax Department evidencing payment of appeal fee of Rs. 1,000/-. The challan reflects the following particulars:
PAN: AAATD1346G
4 ITA No. 7791/Mum/2025 Dilip Vengsarkar Foundation Name: Dilip Vengsarkar Foundation Assessment Year: 2024-25 Nature of Payment: Appeal Fees Amount: Rs. 1,000/- CIN: 25061700107618MAHB Date of Deposit: 17.06.2025 Mode of Payment: Net Banking Bank: Bank of Maharashtra BSR Code: 0230001 Challan No.: 00927 6. It was submitted that the appeal before the learned CIT(A) was instituted on 17.06.2025 and the challan clearly evidences that the appeal fee was paid on the very same date. It was therefore contended that the dismissal of appeal in limine on the ground of non-payment of appeal fee was factually incorrect. It was therefore prayed that the impugned order be set aside and the matter be restored to the file of the learned CIT(A) for adjudication on merits. 7. The learned Departmental Representative fairly submitted that, in view of the challan now placed on record evidencing payment of appeal fee and considering that the learned CIT(A)
5 ITA No. 7791/Mum/2025 Dilip Vengsarkar Foundation has not decided the appeal on merits, the Revenue has no objection if the matter is restored to the file of the learned CIT(A) for adjudication in accordance with law. 8. We have carefully considered the rival submissions, perused the material placed on record, including the challan receipt evidencing payment of appeal fee, and examined the impugned order of the learned CIT(A). 9. The appeal before the learned CIT(A) was dismissed in limine on the ground that the appellant had not furnished proof of payment of the prescribed appeal fee and, therefore, the appeal was held to be defective and not maintainable in view of section 249(4) of the Act. 10. Section 249(1) read with section 249(4) and Rules framed thereunder, mandates that an appeal shall be accompanied by the prescribed fee and that proof of payment is required for admission of the appeal. The requirement of payment of appeal fee is undoubtedly mandatory. However, the material now placed before us clearly demonstrates that the appeal fee of Rs. 1,000/- was paid on 17.06.2025, which is the very date on which the appeal was instituted before the learned CIT(A). The challan receipt evidences compliance of the substantive requirement of section 249(4). 11. Thus, the defect noted by the learned CIT(A) was not non- payment of appeal fee, but non-furnishing of the challan evidencing such payment. In our considered view, non-furnishing
6 ITA No. 7791/Mum/2025 Dilip Vengsarkar Foundation of proof, when the payment itself had already been made within time, constitutes a curable procedural defect and not a substantive non-compliance rendering the appeal non est in law. 12. It is well settled that procedural prescriptions are intended to advance the cause of justice and not to defeat substantive rights. An appeal is a statutory remedy provided for redressal of grievance. Where the mandatory condition of payment stands fulfilled and only documentary proof was not placed on record at the relevant stage, dismissal of the appeal in limine without adjudication on merits would be unduly technical. 13. We further note that the learned CIT(A) has not rendered any finding on the merits of the issues arising from the rectification order passed under section 154. The entire controversy relating to denial of exemption under section 11 and the applicability of Form 10B versus Form 10BB remains unexamined. 14. In the present case, the learned AR has placed on record the challan receipt evidencing payment of appeal fee. The learned Departmental Representative has fairly stated that the Revenue has no objection if the matter is restored for adjudication on merits. 15. Having regard to the totality of facts and in the interest of substantial justice, we are of the considered opinion that the impugned order of the learned CIT(A) deserves to be set aside.
7 ITA No. 7791/Mum/2025 Dilip Vengsarkar Foundation The requirement of section 249(4) stands complied with in substance, and the procedural lapse, if any, was curable.
Accordingly, the order passed by the learned CIT(A) is set aside and the matter is restored to the file of the learned CIT(A) with a direction to admit the appeal and adjudicate the same on merits in accordance with law after affording reasonable opportunity of being heard to the appellant.
We make it clear that we have not expressed any opinion on the merits of the issues involved in the rectification under section 154, and all contentions of both parties are left open.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 17.02.2026.
Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 17/02/2026 Dhananjay, Sr.PS
आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1. प्रत्यथी / The Respondent. 2. 3. संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. 6. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy//
8 ITA No. 7791/Mum/2025 Dilip Vengsarkar Foundation
उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai