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Facts
The assessee's appeal to the CIT(A) for Assessment Year 2011-12 was dismissed due to a 1106-day delay in filing, without a formal application for condonation of delay. The assessee contended that an initial manual appeal was technically dismissed, and the subsequent electronic appeal, although delayed, was a result of issues related to the new electronic filing procedure and inadequate advice, and an inadvertent error in Form 35.
Held
The Tribunal condoned the 1106-day delay in filing the appeal, acknowledging the challenges of the new faceless e-proceedings regime. The matter was remitted back to the CIT(A) for a fresh, de novo meritorious adjudication of all the grounds of appeal raised by the assessee, allowing the assessee to furnish further details and documents.
Key Issues
1. Whether the CIT(A) erred in not admitting the appeal due to a 1106-day delay in filing. 2. Whether there was a reasonable cause for the delay in filing the appeal electronically, particularly concerning the transition from manual to electronic filing. 3. Whether the assessment of capital gain, rejection of claim under section 54F, jurisdiction under sections 147/148, legality of the assessment order, and charging of interest were correctly decided.
Sections Cited
143(3), 147, 54F, 148, 234A, 234B, 234C, 234D, Rule 45 of Income Tax Rules, 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH MUMBAI
Before: SHRI SATBEER SINGH GODARA & SHRI GIRISH AGRAWAL
IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER
ITA No.1823/MUM/2024 Assessment Year: 2011-12
Rohan Hemant Thakkar Income Tax Officer, Ward- 804, Prayog Building, A Wing, 22(3)(2), Mumbai Opposite Galaxy Hotel, Prabhat Vs. Colony, Road No.2, Santacruz (East), Mumbai – 400055 (PAN : AGNPT4221D) (Appellant) (Respondent) Present for: Assessee : Shri Vimal Punmiya, CA Revenue : Smt. Mahita Nair, Sr. DR
Date of Hearing : 09.07.2024 Date of Pronouncement : 18.07.2024
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/250/2023-24/1062028919(1), dated 05.03.2024 passed against the assessment order by Income Tax Officer, Ward 22(3)(2), Mumbai, u/s. 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), dated 25.01.2016 for Assessment Year 2011-12.
Grounds taken by the assessee are reproduced as under:
“1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) erred in not admitting appeal of the
2 ITA No.1823/MUM/2024 Rohan Hemat Thakkar, AY 2011-12 appellant on the pretext that there is delay of 1106 days and appellant failed to make application for condonation of delay in filing appeal. Reasons assigned by him are wrong and insufficient in not admitting appeal of the appellant.
On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) erred in dismissing appeal of the appellant for statistical purpose and thereby erred in confirming assessment of capital gain at Rs.5662500/- on sale of capital assets as short term capital gain instead of as long term capital gain as claimed by the appellant. 3. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) failed to deal with issue of claim made under section 54F of the Act on merit of the case thereby erred in confirming rejection of claim of the appellant made under section 54F of the Act on the pretext that gain on sale of said assets is short term capital gain. 4. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) failed to deal with issue of jurisdiction of issuing notice under section 148 of the Act on merit and thereby erred in confirming initiation of proceeding under section 147 of the Act by issuing notice under section 148 of the Act. 5. The learned Commissioner of Income Tax (Appeals) failed to deal with issue of legality of assessment order made under section 143(3) rws 147 of the Act on merit and thereby erred in confirming order made under section 143(3)(147) of the Act which is illegal, bad-in-law, ultra virus and without allowing reasonable opportunity of the hearing, and without appreciating facts, submission and evidences in their proper perspective, without providing copies of material relied upon is liable to be annulled. 6. The learned Commissioner of Income Tax (Appeals) failed to deal with issue of charging of interest under these provisions and thereby erred in confirming charging of interest under section 234A. 234B and 234C and 234D of the Act.”
Ground no.1 taken by the assessee is in respect of ld. CIT(A) not admitting the appeal of the assessee at the first appellate stage owing to delay of 1106 days, since assessee failed to make application for condonation of delay in filing of the said appeal before the ld. CIT(A). In this respect, we perused the order of the ld. CIT(A) and taken note on certain relevant facts from para 4. It is noted that date of service of notice of demand was 13.02.2016 whereas the appeal was filed on 26.03.2019 by the assessee before the ld. CIT(A). Ld. CIT(A) observed that in Form No.35, assessee has mentioned as “No” against the question in Column No.14 – “whether there is delay in filing appeal”, even though there was a delay of 1106 days in filing the said appeal.
3 ITA No.1823/MUM/2024 Rohan Hemat Thakkar, AY 2011-12 According to him, for the said delay, no application for condonation of delay was filed. Thus, in absence of any application of condonation of the aforesaid delay, the appeal was not admitted and was dismissed for statistical purposes.
Before us, ld. Counsel for the assessee vehemently argued that appeal was first physically filed on 11.03.2016 which was dismissed vide order dated 14.01.2019 on the technical ground that it has not been filed electronically, as required in Rule 45 of Income Tax Rules, 1963. According to him, in the said order, liberty was given to the assessee to file the appeal electronically which was filed on 26.03.2019 in conformity of Rule 45 of the Rules. This first appellate order dated 14.01.2019 is placed in the paper book at page No.9 to 16. Assessee made a submission dated 17.02.2021 before the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, explaining the reasons for the delay pointed out by ld. CIT(A) in the present case. Content of the same is reproduced as under: “I am in receipt of deficiency letter in respect of appeal filed on 26.03.2019 for above assessment year for the reason that appeal filed beyond time and application of condonation of delay not filed. With reference to above I submit that appeal for above assessment year was filed manually on 11.03.2016, which is dismissed vide order dated 14.01.2019 as same was filed in contravention to Rule 45 of IT Rules. Accordingly now appeal has been filed electronically on 26.03.2019 in conformity with Rule 45. It is submitted that this being the first year in which the procedure of filing appeal electronically has been introduced and I was not properly advised by my consultant on which I relied upon and therefore said appeal could not be filed electronically at first instance. On receipt of order of the Hon'ble Commissioner of Income Tax (Appeals) I first time came to know about the fact that said appeal should have been filed electronically. Accordingly I have filed said appeal electronically on 26.03.2019. Since I was prevented by sufficient cause in failing to file appeal electronically as provided, I request your honour to kindly take lenient view and condone the delay in filing appeal electronically and admit the said appeal. Expecting your favour in the matter”
4 ITA No.1823/MUM/2024 Rohan Hemat Thakkar, AY 2011-12 4.1. Further, ld. Counsel pointed out that in the faceless e- proceedings, assessee has furnished written submission along with supporting documents and evidences on four different dates all of which are placed in the paper book at page nos.74 to 80 along with e- proceedings response acknowledgement for the submissions so made. According to the ld. Counsel, there was a reasonable cause which existed for the delay that occurred in filing the appeal electronically though it was filed manually within the permissible time limit. Also, assessee was given liberty to file the appeal electronically in the first order when the manually filed appeal was dismissed.
Per contra, ld. Sr. DR strongly objected on the submissions made by the ld. Counsel.
We have heard both the parties and given our thoughtful consideration to the submissions made before us. Admittedly, it is a fact on record that the initial appeal filed by the assessee was disposed off by the ld. CIT(A) for want of electronic filing as required under Rule 45 of the Rules with a liberty given to the assessee to file the same electronically again. In the electronic e-filing, inadvertently assessee has filled in “NO” against the details required on delay in filing the appeal.
We have considered the submissions made by the Ld. Counsel in this respect and the evidence placed on record. We do take note of the fact that faceless regime is a new technological phenomenon going through teething phase. Hence, it requires lenient and pragmatic approach to handle certain lapses which are unintended. Thus, taking the circumstances holistically, we condone the delay of 1106 days in filing the present appeal.
5 ITA No.1823/MUM/2024 Rohan Hemat Thakkar, AY 2011-12 8. Having condoned the delay in filing the appeal before the ld. CIT(A), we remit the matter back to the file of ld. CIT (A) for denovo meritorious adjudication of the grounds of appeal taken by the assessee at the first appellate stage. Assessee is at liberty to furnish details and documents, if he so requires, to substantiate his claim. We direct the assessee to be diligent in attending the hearings before the Ld. CIT(A) for expeditious disposal of the matter and not to seek adjournments unless warranted by compelling reasons.
In the result, appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 18 July, 2024
Sd/- Sd/- (Satbeer Singh Godara) (Girish Agrawal) Judicial Member Accountant Member
Dated: 18 July, 2024 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER,
(Dy./Asstt.Registrar) ITAT, Mumbai