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Facts
The assessee filed an appeal manually within the time limit, which was dismissed as not maintainable. The CIT(A) granted liberty to file electronically and seek condonation of delay. The assessee refiled electronically after 1219 days, but the CIT(A) dismissed it again, citing insufficient reasons for the delay.
Held
The Tribunal held that the delay of 1219 days should be condoned, considering the liberty granted by the CIT(A) and the principle of substantial justice over technical considerations. The appeals were remitted back to the CIT(A) for adjudication on merits.
Key Issues
Whether the delay in filing the appeal electronically should be condoned, especially when liberty was previously granted by the CIT(A)?
Sections Cited
249(1)
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Income Tax Appellate Tribunal, “D” BENCH MUMBAI
Before: SHRI SATBEER SINGH GODARA & SHRI GIRISH AGRAWAL
O R D E R
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2023-24/1061309551(1), dated 22.02.2024, against the assessment order passed by the Assistant Commissioner of Income Tax, 26(2), Mumbai u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 28.03.2016 for Assessment Year 2013-14.
2. Grounds taken by the assessee are reproduced as under:
1. The Assessee has e-filed the appeal electronically as per the directions given by the Honrable CIT(A)-38 vide its Order dated 30/08/2019 bearing appeal no: 38 ACII- 26(2)/IT-53/2016-17, wherein the CIT(A)-38 has categorically stated "The appellant is at liberty to file the appeal electronically as per provisions of Rule and seek condonation of delay in filing of appeal, which may be examined at the appropriate time". Copy of the CIT(A) Order dated 30/08/2019 is attached herewith. In the circumstances and facts of our case, the Ld. Commissioner of Income Tax (Appeals), NFAC has erred in law and on facts in treating the appeal filed by the Assessee as invalid and erred in holding the delay in filing the appeal of 1219 days cannot be condoned on conjectures and surmises despite the fact that Assessee's appeal has been filed in accordance with directions of the Hon'ble CIT(A)-38 2. In the circumstances and facts of our case, the Ld. Commissioner of Income Tax (Appeals), NFAC has erred in law and on facts on one hand in stating that the appellant has failed to provide the sufficient reason for the extra ordinary delay in filing of appeal and on the other hand stating that the reason provided by Assessee is vague. The Assessee has provided the sufficient reason for delay in filing the appeal in Form 35 vide serial no 15.
Without prejudice to the above, in the circumstances and facts of our case, the Learned Commissioner of Income Tax (Appeals), NFAC has erred in law and on facts in stating in the appeal order that the appellant was issued with the hearing notice. The Assessee states that it was not in receipt of notices for hearing issued by the L.d. Commissioner of Income Tax (Appeals), NFAC on is registered primary email id fa@nobleplus.in on the income tax portal. Please note that Id. Commissioner of Income Tax (Appeals), NFAC has issued and sent all the notices for hearing to erstwhile email id bhupesh@nobleplus.in. Screen shot from the income portal of the notices being sent on email id bhupesh@nobleplus.in is attached herewith. The erstwhile email id belongs to an ex-accountant of the Assessee who is not working with it and such email id is inactive and non-operational. The Assessee states that since the notices for hearing were not sent on the registered email id of the Assessee and was sent to a non-operational and inactive email id, the Assessee was not able to respond to the notices for hearing issued by the Id. Commissioner of Income Tax (Appeals), NFAC notices. Screen shot of our Income Tax Portal reflecting of our primary email id as registered on the portal is attached herewith for Your Honour's ready reference. In the circumstances, Id. Commissioner of Income Tax (Appeals), NFAC has not offered natural justice of being heard by not issuing the hearing notices to the registered email id fa@nobleplus.in on the income tax portal.
4. Without prejudice to the above, in the circumstances and facts of our case, the Learned Commissioner of Income Tax (Appeals), NFAC has erred in law and on facts by not considering the other issues mentioned in the grounds of appeal due to the reason that since the condonation of delay in not granted, the other issues are not dealt with despite the fact that the Assessee had filed the ground-wise written submission along with paper books before the Ld. Commissioner of Income Tax (Appeals), NFAC. In the circumstances, the Assessee most humbly requests and prays Your Honour to set aside the CIT(A) Order and restore the appeal back to the Id Commissioner of Income (Appeals), NFAC for adjudication.
3. The moot point raised by the assessee before us is in respect of delay not condoned by the ld. CIT(A) at the first appellate stage and the appeal being dismissed without admitting it.
4. Brief facts of the case are that assessee had filed its appeal before the ld. CIT(A) in manual form on 13.04.2016, vide appeal No. CIT(A)- 38/ACIT-26(2)/IT-53/2016-17, which was not admitted in view of CBDT circular No. 20/2016, dated 26.05.2016 as well as Notification No .S.O. 637(E) [No.11/2016 (F.No.149/150/2015-TPL)], dated 01.03.2016 r.w. provisions of section 249(1) of the Act. Ld. CIT(A) held the appeal as not maintainable and invalid ab initio. However, while dismissing the said appeal filed manually, he noted in para – 5.2 that “ The appellant is at liberty to file the appeal electronically as per provisions of Rule and seek condonation of delay in filing of appeal, which may be examined at the appropriate time”. Thus, ld. CIT(A) required that appeal ought to be have been filed electronically as against manually done by assessee, granting the assessee liberty to file the same electronically and seek condonation of the delay for the same. Merits of the case were not dealt by ld. CIT(A) while dismissing the said appeal.
4.1. Assessee filed the appeal once again electronically on 30.08.2019. While doing so, assessee admitted in its Form 35 filed electronically, requesting for condonation of delay of 1219 days, as under:
"The appeal was filed in paper format within the due date. The appeal is being e- refiled. If the appeal filed earlier on 13/04/2016 is considered as delay in filing appeal, we request Your Honour to condone the delay since there was no motive or mens rea and there would not be any detriment to the department but grave injustice would be caused to the assessee. Further, it is an accepted fact that there were technical issues in e-filing the appeal from 01/03/2016 to 15/05/2016".
5. In the present case, the assessment order was passed on 28.03.2016 and accordingly ld. CIT(A) observed that there is significant delay of 1219 days in filing the present e-filed appeal before him. In order to explain the delay, for its condonation, assessee was issued with hearing notice to prove its claim. Ld. CIT(A) finally observed that assessee had filed the reasons for condonation which were found to be neither sufficient nor convincing and thus treated the said appeal as invalid. The delay of 1219 days was not condoned and the appeal was dismissed without dealing on the merits of the case. Aggrieved, assessee is in appeal before the Tribunal.
6. We have heard both the parties and perused the material on record. It is undisputed fact that the appeal for the first time was filed manually by the assessee which was within the stipulated time as prescribed u/s. 249 of the Act. The said, manually filed appeal was dismissed on account of technical and procedural lapses on the part of the assessee since it ought to have been filed electronically. While dismissing the manual appeal, ld. CIT(A) gave liberty to the assessee to file the same electronically and seek condonation of delay for the same. Assessee, subsequently filed the appeal electronically and sought condonation of delay in Form 35 by explaining its case referring to the dismissal of the appeal filed originally in the manual form. However, ld. CIT(A) again dismissed the electronically filed appeal on account of delay, which was computed by taking the date of the impugned assessment order resulting into 1219 days of delay and ignoring the liberty granted earlier.
Before us, ld. Counsel for the assessee pleaded that there was a lapse on the part of the assessee to file the appeal in electronic mode, which in fact was filed manually within the prescribed time limit. There exist a sufficient cause before the ld. CIT(A) to condone the delay in the appeal filed electronically for which liberty was granted while dismissing the manually filed appeal.
To address the issue in hand before us, we need to delve into the understanding of the expression “sufficient cause”. Sub-section 3 of Section 249 contemplates that the CIT(A) may admit an appeal after expiry of relevant period, if he is satisfied that there was a “sufficient cause” for not presenting it within that period. Similarly, it has been used in section 5 of Indian Limitation Act, 1963. Whenever interpretation and construction of this expression has fallen for consideration before Hon'ble High Court as well as before the Hon'ble Supreme Court, then, Hon'ble Courts were unanimous in their conclusion that this expression is to be used liberally.
8.1. We may make reference to the following observations of the Hon'ble Supreme Court from the decision in the case of Collector Land Acquisition Vs. Mst. Katiji & Others, 1987 AIR 1353:
"1. Ordinarily a litigant does not stand to benefit by lodging an appeal late.
Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. "Every day's delay must be explained" does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common sense pragmatic manner.
When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay.
There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk.
It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."
8.2. Similarly, we would like to make reference to authoritative pronouncement of Hon'ble Supreme Court in the case of N.Balakrishnan Vs. M. Krishnamurthy (supra). It reads as under:
"Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.
A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi lain Vs. Kuntal Kumari [AIR 1969 SC 575] and State of West Bengal Vs. The Administrator, Howrah Municipality [AIR 1972 SC 749]. It must be remembered that in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time then the court should lean against acceptance of the explanation. While condoning delay the Could should not forget the opposite party altogether. It must be borne in mind that he is a looser and he too would have incurred quiet a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shall compensate the opposite party for his loss."
8.3. We do not deem it necessary to re-cite or recapitulate the proposition laid down in other decisions. It is suffice to say that the Hon'ble Courts are unanimous in their approach to propound that whenever the reasons assigned by an applicant for explaining the delay, then such reasons are to be construed with a justice oriented approach.
8.4. In light of the above, if we examine the facts then it would reveal that there is a delay of 1219 days in filing of the appeal by the assessee before the ld. CIT(A). In its submissions as reproduced in the order of ld. CIT(A), assessee has explained the reasons which prevented it in filing the appeal withing the prescribed limitation. Therefore, for the just decision of the controversy, it is incumbent upon us to condone the delay. Considering the said explanation of the assessee more particularly in the light of liberty already granted, we condone the same and direct the ld. CIT(A) to admit the appeal for its meritorious adjudication.
Since the first appeal has been disposed of by the ld. CIT(A) as “dismissed as not maintainable”, we remit the matter back to the file of ld. CIT(A) for its meritorious adjudication. We also direct the assessee to be diligent and cooperative in attending the hearings and make its submissions for expeditious and effective disposal of the appeal. It should not seek adjournments unless warranted by compelling reasons.
In the result, appeal of the assessee is allowed for statistical purposes.