Unintentional errors in filling appeal should be overlooked and be disposed -off on merits

CA Saurabh Chokhra

Brief of the case:

• The Hon’ble Bombay HC in the above-cited case held that an unintentional error on the part of assessee while filling an appeal, more so when the department also acted ignoring the error, would not result in rejecting assessee’s appeal being time barred.
• Therefore, in the present case the mistake of assessee to file the appeal with AO instead of CIT(A) was unintentional and therefore, CIT(A) should hear the appeal on merits.
  

Facts of the case:

• Assessing officer passed an order u/s 143(3) of the Act determining a total income at Rs. 1.11 crores. Aggrieved assessee prepared an appeal in Form 35 but by mistake instead of the appeal being filed in the office of the CIT(A), it was filed on 8th February, 2008 (within the period of limitation) with the office of the Assessing Officer i.e. Deputy Commissioner of Income Tax 10 (3), who accepted the same.
• The assessee thereafter on 19^th Aug, 2008 filed an application seeking a stay of the demand pending the disposal of its appeal before the CIT(A) as 50% of the demand had already been paid.
• By an order dated 12th November, 2008, the Commissioner of Income Tax granted a stay of the demand to the extent of 50% of the still unpaid taxes on the appellant further depositing 50% of the unpaid demand raised consequent to the order of the Assessing Officer.
• This order dated 12th November, 2008 was passed after recording and considering the fact that the assessee’s appeal for the subject Assessment Year is pending before the CIT (A).
• On 23rd March, 2010, the assessee addressed a communication to the CIT(A) seeking a hearing in respect of its pending appeal for A.Y. 200506. It is at that time, while pursuing the issue with the CIT(A) for fixing a hearing that the appellant realized that the appeal in Form 35 was incorrectly filed with the office of the Assessing Officer, instead of the office of the CIT (A).

• Therefore, on 12th May, 2011 the appellant requested the Assessing Officer to forward its appeal filed in its office to the CIT(A) to enable its disposal on merits. However, it was refused. This resulted in the appellant having to file a fresh appeal on 9th June, 2011 to the CIT (A) from the order of the Assessing Officer dated 31st December, 2007. This appeal was accompanied along with an application for condonation of delay listing out the aforesaid circumstances leading to the delay.
• CIT (A) by his order dated 4th August, 2011, rejected the appeal for condonation of delay and did not admit the appeal for consideration. Aggrieved assessee filed a further appeal to the Tribunal.
• Tribunal, however, considering the fact that since the assessee was assisted by a Chartered Accountant in filling appeal, it should have been more vigilant. Such type of mistakes cannot be a ground for condonation for delay in filling appeal.
• Aggrieved assessee is in appeal before Hon’ble High court.

Held by Hon’ble Bombay  High Court:

• High court observed that the appeal from order dated 31^st December, 2007 of the Assessing Officer was prepared and filed in the prescribed Form No.35 was addressed to CIT(A) but by mistake tendered to the office of the Assessing Officer and the office of the Assessing Officer also accepted the same.
• In fact, as the appeal pertained to the CIT(A) and not its office, the Assessing Officer ought to have immediately returned the appeal which would have made assessee to know its mistake and it could have taken appropriate steps to file the same with the office of CIT (A) .
• It is not the case of the Revenue that the appeal addressed to the CIT(A) was not filed with the Office of the Assessing Officer on 8th February, 2008 i.e. within the period of limitation. In case, the Assessing Officer had returned the appeal immediately to the appellant or had forwarded it to the office of the CIT(A) then no delay would have occurred by assessee in filling appeal with CIT(A).

• Further, department disposed off stay application believing that appeal is pending before CIT(A). The lapse on part of assessee was unintentional. Court relied on the decision of Apex court in the case of Madhya Pradesh Vs. Pradip Kumar 2000(7) SCC 372 that although the law assists the vigilant, an unintentional lapse on the part of the litigant would not normally close the doors of adjudication so as to be permanently closed, as it is human to err.
• In the present case , the court found an unintentional lapse on the part of the appellant. We are, therefore, of the view that the impugned order is not sustainable and the question as framed is answered in favour of the appellant assessee.
• In result the appeal of assessee was allowed.