UNIQUE PROPERTIES & SECURITIES PVT. LTD.,MUMBAI vs. DCIT CENT. CIR. 6(3)), MUMBAI

ITA 5475/MUM/2017Status: DisposedITAT Mumbai05 February 2018AY 2013-145 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The ITAT condoned the delay in filing the appeal electronically, citing reasonable cause due to the initial year of the rule change and potential technical glitches. The CIT(A) was directed to decide the appeal on merits.

What were the facts?

The assessee filed an appeal manually on March 14, 2016, after the rule change mandating electronic filing from March 1, 2016. The CIT(A) dismissed the appeal as not maintainable due to the manual filing, despite the assessee later filing electronically on December 12, 2016.

What were the issues?

Whether a manually filed appeal, when electronic filing was mandated, is maintainable and if the delay in subsequent electronic filing can be condoned.

Which sections of the Income-tax Act were involved?

Rule 45 of the Income Tax Rules, Rule 12 of the Income Tax Rules

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA

For Appellant: Shri Prayag Jha, Ms. Hemalatha

For Respondent: Ms. Hemalatha

सुनवाई क� तार�ख / : 27.11.2017 Date of Hearing घोषणा क� तार�ख / : 05.02.2018 Date of Pronouncement आदेश / O R D E R Per Shamim Yahya, A. M.: This appeal by the assessee is directed against the order by the Commissioner of Income Tax (Appeals) dated 28.06.2017 and pertains to the assessment year 2013- 14.

The grounds of appeal read as under:

(A.Y. 2013-14) M/s. Unique Properties & Securities Pvt. Ltd. vs. Dy. CIT 1. The Ld CIT(A) erred in dismissing the assesses's appeal on the ground that the appeal was filed on 14.03.2016 manually and not electronically.

2. The Ld CIT(A) erred in not appreciating that filing of appeal electronically, introduced with effect from 01.03.2016, was facing technical difficulties initially as the system introduced by the CBDT was not fully functional and smooth.

The Ld CIT(A) erred in not appreciating that manually filed appeal within the stipulated time was accepted by his office without any objection and therefore, the Ld CIT(A) should have admitted this appeal and decided the issues on merits.

4. The Ld CIT(A) grossly erred in not appreciating that the assessee had filed appeal electronically on 12.12.2016 and he should have clubbed the same with the manually filed appeal before taking decision.

5. The above grounds of appeal are without prejudice to one another.

3. In this case the ld. Commissioner of Income Tax (Appeals) has dismissed the assessee's appeal on the ground that from the current assessment year the appeal before the ld. Commissioner of Income Tax (Appeals) was to be filed in electronic form. However, the assessee has filed the appeal in paper form, and the appeal in electronic form was filed after a lot of delay. The ld. Commissioner of Income Tax (Appeals) discussed the facts and the asseessee's explanation as under:

3.2 In this case the appellant had filed appeal on 14.03.2016 in Paper Form. Subsequently, it was observed that Rule 45 of the Income Tax Rules have been modified w.e.f 01.03.2016 and the same provides that w.e.f. 01.03.2016, the appeals before the CIT(Appeals) shall be made in modified Form No. 35, electronically, where the assessee under sub rule (3) of Rule 12 is required to file return of income electronically. Further, vide CBDT Notification No. 11/2016 dated 01.03.2016, the Form No. 35, in which the appeal before the CIT(Appeals) is required to be filed, was also modified.

3.3 The CBDT vide Circular No. 20/2016 dated 26.05.2016 had clarified that those assesses who could not file appeals electronically on or after 01.03.20 it due to lack of knowledge/technical issue and had filed Paper appeals should file appeals electronically till 15.06.2016 and such appeals will be treated as appeal filed within time. During the appellate proceedings, the (A.Y. 2013-14) M/s. Unique Properties & Securities Pvt. Ltd. vs. Dy. CIT appellant has filed copy of acknowledgement of filing of appeal in electronic form on 12.12.2016. Since the appellant had filed appeal in Paper form on 14.03.2016 and had not filed the appeal in electronic form on or before 15.06.2016, so vide letter of this office dated 31.05.2017 in No. Cir(Al 54/MUM/UP&SPL/2017-18 the appellant was requested to explain as to w< ,, the paper appeal filed on 14.03.2016 should not be treated as invalid ana dismissed as "not maintainable".

3.4 In response to the same the appellant vide its letter dated 12,06.2017 filed in tapal on 13.06.2017 submitted as under. "In this regard, we have to submit that the appeal was filed against the assessment order dated 79.02.2016, passed under section 14313), a copy of which was received by us on 79.02.20J6. We filed the appeal manually on 14.03.2016, in your office. This appeal was filed within the stipulated time of 30 days from the date of communication of the impugned order. Our appeal was filed in prescribed proforma and the appeal fee of Rs.100/- was also paid. Our appeal cannot be said to be not maintainable. Your honour has given reference to the Notification of the CBDT on this issue. It may be seen that the hon'ble CBDT have not stored that the appear filed manually after 01.03.2016 shall fee dismissed as not maintainable. They have only clarified that an assessee who is not able to file an appeal electronically after 01.03.2016, for some reason, should file appeal electronically till 15.06.2016. We did not file e-appeal till 12.06.2016. However, after noticing the Notification of the CBDT; we filed our appeal electronically on 12.12.2016. We have to request that our appeal filed manually on 14.03.2016 z not be dismissed on technical ground but be clubbed with the appeal filed electronically on 12.12.2016 and be considered together tor decision. However, in case this request is not found acceptable and the appeal filed manually is considered separate from the appeal filed electronic for the purpose of taking decision, then both the appeals may kindly be decided simultaneously. We should also be allowed opportunity of being heard in respect of *he appeal filed electronically- This appeal also involves issue of condonation of delay."

However, the ld. Commissioner of Income Tax (Appeals) was not convinced.

He declined to condone the delay and concluded as under:

(A.Y. 2013-14) M/s. Unique Properties & Securities Pvt. Ltd. vs. Dy. CIT Under the statue the Commissioner (Appeals) has no power to waive or condone the same. If the appeal is not filed in prescribed form/manner then the same has to be treated as invalid and not maintainable and the CIT(A) has no discretion to admit the same as valid appeal.

4.5 In view of the facts discussed above, I am of the considered opinion, that the present Paper appeal filed by the appellant on 14.03.2016 is an invalid appeal as the same was not filed in prescribed form and verified in prescribed manner as stipulated under the statue and hence the same is not maintainable. Hence, the present paper appeal filed on 14.03.2016 is treated as invalid and not maintainable and accordingly all the grounds raised therein are Dismissed, as not maintainable. The contention of the appellant that subsequent appeal filed on 12.12.2016 in modified/revised Form No. 35 electronically should be treated as valid and condone the delay in filing appeal electronically is considered and I am of the considered opinion that the same does not require adjudication, as the same is not relevant to adjudicate the present appeal under consideration.

Against the above order, the assessee is in appeal before the ITAT.

Upon hearing both the counsel and perusing the records I find that there was reasonable cause for the delay in assessee's filing the appeal in electronic form. This was the first year of the rule that appeals are to be filed electronically. Further, there is plea by the assessee that there were some technical glitches in the server also. In my considered opinion, the reasonable cause attributed has considerable cogency. Hence, I condone the delay in filing the appeal in electronic form before the ld. Commissioner of Income Tax (Appeals). The ld. Commissioner of Income Tax (Appeals) is directed to consider the issue in appeal on merits and pass a speaking order after giving the assessee proper opportunity of being heard.

(A.Y. 2013-14) M/s. Unique Properties & Securities Pvt. Ltd. vs. Dy. CIT

In the result this appeal by the assessee stands allowed for statistical purposes

Order pronounced in the open court on 05.02.2018 Sd/- (Shamim Yahya) लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 05.02.2018 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,

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