M/S.SPARKLE CLEAN TECH PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER WARD-1(3)(1), MUMBAI

The present appeal filed by the assessee company for A.Y 2013- 14 is directed against the order passed by the CIT(A)-3, Mumbai, dated 26.03.2018, which in turn arises from the assessment order passed under Sec. 143(3) of the Income Tax Act, 1961 (for short ‘Act’), dated 07.03.2016. The assessee assailing the order of the CIT(A) has raised before us the following grounds of appeal: “1. The learned CIT(Appeals) has erred in law and on the facts of the case in dismissing the appeals as invalid, ab-initio appeal.

Aggrieved, the assessee assailed the assessment order before the CIT(A). It was noticed by the CIT(A) that the assessee had filed the appeal manually in paper form on 05.04.2016, against the order dated 07.03.2016 passed by the Income Tax Officer 1(3)(1), Mumbai under Sec. 143(3) for A.Y 2013-14. The CIT(A) observed that as per Notification No. S.O 637(E), dated 1st March, 2016, issued by the Central Board of Direct Taxes, New Delhi, the Rule 45 of the Income Tax Rules 1962 was amended, therein making it mandatory for all the persons who were required to furnish their return of income electronically to e-file their appeals before the appellate commissioner with effect from 01.03.2016. In the backdrop of his aforesaid observations, the CIT(A) was of the view that as the appeal which was manually filed by the assessee in paper form was not in conformity with Rule 12(3) of the Income Tax Rule 1962, thus, the same was invalid ab- initio. Accordingly, on the basis of his aforesaid observations, the CIT(A) declined to examine any other aspect of the appeal and treating it as non est, dismissed the same.

The assessee being aggrieved with the order passed by the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short ‘A.R’) of the assessee submitted, that the manual filing of the appeal was on account of an inadvertent oversight on the part of the assessee of the amended rules, which in itself were in their infancy stage. It was submitted by the ld. A.R, that on learning of its aforesaid mistake, the assessee had e- filed the appeal on 13.04.2018. Further, it was submitted by the ld. AR that the Tribunal after deliberating on the bonafides of the assessee, as regards the non compliance of Rule 45 of the Income Tax Rules, 1962, which mandated compulsory e-filing of appeals before the appellate Commissioner P a g e | M/s Sparkle Clean Tech Pvt. Ltd. Vs. Income Tax Officer Ward-1(3)(1) with effect from 01.03.2016, had in the case of All India Federation of Tax Practitioners, Mumbai, Vs. ITO (E)-1(2), Mumbai [ITA No. 7134/Mum/2017, dated 04.05.2018] in all fairness and in the very interest of justice restricted the appeal to the file of the CIT(A) with an opportunity to the assessee to electronically file the appeal. It was submitted by the ld. A.R, that now when the assessee had already electronically filed the appeal before the CIT(A), thus, the matter may be restored to his file, with a direction to dispose off the same on merits. Per contra, the ld. Departmental Representative (for short ‘D.R’) relied on the order of the CIT(A).

We have heard the authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record. We find that the appeal of the assessee had been dismissed by the CIT(A), on the ground that the same not having been filed electronically, was thus, not in conformity with Rule 12(3) of the Income Tax Rule, 1962. We have deliberated at length on the issue under consideration, and find that the issue involved therein is squarely covered by the order of the Tribunal in the case of All India Federation of Tax Practitioner, Mumbai, Vs. ITO (E)- 1(2), Mumbai [ITA No. 7134/Mum/2017, dated 04.05.2018]. We find that the Tribunal in the aforementioned case, being of the view that the default on the part of the assessee in manually filing the appeal in paper form was merely a technical defect, which could not be preferred and allowed to overshadow the cause of substantial justice. The Tribunal in its aforesaid order, had observed 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 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 1stMarch 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 P a g e | M/s Sparkle Clean Tech Pvt. Ltd. Vs. Income Tax Officer Ward-1(3)(1) 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. Shyamalal Murari 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 „Rani Kusum Vrs. 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. 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 negative by such technical considerations. Apart from above we have also noticed that the Coordinate Bench of Hon‟ble ITAT Delhi Bench in appeal 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 the net result the appeal filed by the assessee is allowed.

The appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 26.09.2018 Sd/- Sd/- (B.R.Baskaran) (Ravish Sood) ACCOUNTANT MEMBER JUDICIAL MEMBER भ ुंफई Mumbai; ददन ुंक 26.09.2018 Ps. Rohit आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीर थी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आम क्त(अऩीर) / The CIT(A)- 3. आमकय आम क्त / CIT 4. विब गीम प्रतततनधध, आमकय अऩीरीम अधधकयण, भ ुंफई / 5. DR, ITAT, Mumbai ग र्ड प ईर / Guard file. 6. सत्म वऩत प्रतत //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar)