Case Law Details
Hemendra Lilachand Shah Vs ITO (ITAT Ahmedabad)
ITAT noted that requirement of filing appeal before the learned CIT (A) in electronic form was new. The assessee being individual filed appeal before CIT(A) within time limit but in paper dated 18th April 2016 instead of filing online as required by the CBDT notification dated 1st March 2016. In this regard we are of the view that the filing of appeal in electronic mode is a procedural requirement and any failure to comply with procedural requirement cannot be made hindrance in affording justice. The assessee who filed appeal within the time limit in paper form in our considered cannot be deprived of justice merely for the reason to comply with newly brought procedural requirement.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-5, Ahmedabad, dated 19/02/2018 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) relevant to the Assessment Year 2013-14.
2. At the outset, it was noticed that there was a delay of 874 days in filing the appeal by the assessee before the ITAT.
3. The assessee has filed the affidavit explaining the reason for the delay in filing the appeal. It was submitted that the order of the CIT(A) was handed over to the staff namely Shri Dinesh Desai who left the organization as the assessee was facing severe financial crises. In fact, the assessee could not repay the money borrowed from Visnagar Co-operative Bank for which the case is pending before the Metropolitan Court. In view of the above, the ld. AR requested that there was sufficient and reasonable cause which prevented the assessee in filing the appeal before the ITAT.
4. It was also contended by the Ld. AR that the assessee has fair chance of succeeding in the appeal filed before the ITAT, therefore, if the delay is not condoned then the assessee shall loose due to procedural technicalities. As per the Ld. AR, the assessee has meritorious case and therefore, the delay in filing the appeal should be condoned.
5. On the other hand the ld. DR opposed to condone the delay in filing the appeal by the assessee
6. We have perused the records and heard the rival submissions of both the sides. There was a delay of 874 days in filing the appeal by the assessee before ITAT. In the condonation petition, it was the explained that the order of the ld. CIT(A) was handed over to the staff namely Shri Dinesh Desai who left the organization as the assessee was facing severe financial crises. In fact, the assessee could not repay the money borrowed from Visnagar Co-operative Bank for which the case is pending before the Metropolitan Court. Now the controversy arises for our adjudication whether the staff’s failure to supply the order of the ld. CIT-A is reasonable and sufficient cause for condoning the delay. In this regard we note that the Hon’ble Madras High Court in the case of Sreenivas Charitable Trust v. Dy. CIT reported in 280 ITR 357 has held that :
“3. The Supreme Court in Vedabai v. Shantaram Baburao Patil [2002] 253 ITR 798held as under :
“In exercising discretion under section 5 of the Limitation Act the Courts should adopt a pragmatic approach. A distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The Court has to exercise the discretion on the facts of each case keeping in mind that in construing the expression ‘sufficient cause’, the principle of advancing substantial justice is of prime importance.” (p. 799)
4. The Calcutta High Court in CIT v. Orissa Concrete & Allied Industries Ltd. [2003] 264 ITR 186 held as under :
“. . .what is really indicated in the various decisions cited and in section 5 of the Limitation Act itself, is that a litigant would be required to explain why the appeal and/or application could not be filed within the period prescribed by limitation and explain the delay for such period for the purpose of linking up the circumstances which had caused the delay during the period of limitation and thereafter.” (p. 192)
5. Recently, the Allahabad High Court in Ganga Sahai Ram Swarup v. ITAT [2004] 271 ITR 512 has taken the view that liberal view ought to have been taken by the authority as the delay was only of a very short period and the appellant was not going to gain anything from it.
6. Applying the ratio laid down by the Apex Court as well as various High Courts, we find, it is stated in the petition filed by the assessee for condonation of delay that the order copy was misplaced and thereafter it was found and sent to counsel for preparing the appeal and then, the appeal was prepared and filed before the Tribunal and in that process, the delay of 38 days occurred. As held by the Apex Court, no hard and fast rule can be laid down in the matter of condonation of delay and the Courts should adopt a pragmatic approach and the Courts should exercise their discretion on the facts of each case keeping in mind that in construing the expression “sufficient cause” the principle of advancing substantial justice is of prime importance and the expression “sufficient cause” should receive a liberal construction. We are, therefore, of the opinion that the Appellate Tribunal ought to have condoned the delay in filing the appeal, considering the reasons given by the assessee for the delay.”
6.1 From the above, it is clear that the expression “sufficient cause” should be interpreted to advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay.
6.2 We also note that the Hon’ble Gujarat High Court in the case of S.R. Koshti Vs. CIT reported in 276 ITR 165 has held as under:
18. The position is, therefore, that, regardless of whether the revised return was filed or not, once an assessee is in a position to show that the assessee has been over-assessed under the provisions of the Act, regardless of whether the over-assessment is as a result of assessee’s own mistake or otherwise, the CIT has the power to correct such an assessment under section 264(1) of the Act. If the CIT refuses to give relief to the assessee, in such circumstances, he would be acting de hors the powers under the Act and the provisions of the Act and, therefore is duty-bound to give relief to an assessee, where due, in accordance with the provisions of the Act.
19. In the present case, the respondent-CIT has nowhere stated that the petitioner is not entitled to the relief under section 10(10C) of the Act. In fact, the said position is undisputed. The Assessing Officer himself had passed an order under section 154 of the Act, granting such relief. In the circumstances, even the order under section 264 of the Act made on 29-32004, cannot be sustained.
20. A word of caution. The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is over-assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. This Court, in an unreported decision in case of Vinay Chandulal Satia v. N.O. Parekh, CIT [Spl. Civil Application No. 622 of 1981 dated 20-8-1981], has laid down the approach that the authorities must adopt in such matters in the following terms:
“The Supreme Court has observed in numerous decisions, including Ramlal v. Rewa Coalfields Ltd. AIR 1962 SC 361, State of West Bengal v. Administrator, Howrah Municipality AIR 1972 SC 749 and Babutmal Raichand Oswal v. Laxmibai R. Tarte AIR 1975 SC 1297, that the State authorities should not raise technical pleas if the citizens have a lawful right and the lawful right is being denied to them merely on technical grounds. The State authorities cannot adopt the attitude which private litigants might adopt.”
6.3 From the above it is revealed that the income of the assessee should not be over assessed even there is a mistake of the assessee. As such the legitimate deduction for which the assessee is entitled should be allowed while determining the taxable income.
6.4 We also note that the Hon’ble Gujarat High Court in the case of Vareli textile industry versus CIT reported in 154 Taxman 33 has held as under:
It is equally well-settled that where a cause is consciously abandoned (as in the present case) the party seeking condonation has to show by cogent evidence sufficient cause in support of its claim of condonation. The onus is greater. One of the propositions of settled legal position is to ensure that a meritorious case is not thrown out on the ground of limitation. Therefore, it is necessary to examine, at least prima facie, whether the assessee has or has not a case on merits.
6.5 In view of the above and after considering the facts in totality, we are of the view that it is a fit case where the delay in filing the appeal by the assessee deserves to be condoned.
7. Coming to the issue raised by the assessee in the memo of the appeal, we note that the learned CIT(A) in ex-party order dated 19-02-2018 dismissed the appeal of the assessee as non-east. The learned CIT(A) while dismissing the appeal of the assessee held that, as per the CBDT notification dated 01-03-2016 and Circular no. 20/2016 dated 26-05-2016 the assessee was required to file appeal in electronic mode whereas assessee filed appeal dated 28-04-2016 offline mood i.e. in paper form.
7.1 At the outset, we note that the requirement of filing appeal before the learned CIT (A) in electronic form was new. The assessee being individual filed appeal before CIT(A) within time limit but in paper dated 18th April 2016 instead of filing online as required by the CBDT notification dated 1st March 2016. In this regard we are of the view that the filing of appeal in electronic mode is a procedural requirement and any failure to comply with procedural requirement cannot be made hindrance in affording justice. The assessee who filed appeal within the time limit in paper form in our considered cannot be deprived of justice merely for the reason to comply with newly brought procedural requirement. In holding so, we find support and guidance from the judgment of Hon’ble Supreme Court in case of Rani Kusum vs. Kanchan Devi reported in AIR 2005 (SC) 3304 where it was held as under:
No person has a vested right in any course of procedure. He has only the right of prosecution or defence in the manner for the time being by or for the Court in which the case is pending, and if, by an Act of Parliament the mode of procedure is altered, he has no other right than to proceed according to the altered mode. (See Blyth v. Blyth (1966 (1) All E.R. 524 (HL). A procedural law should not ordinarily be construed as mandatory, the procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. (See Shreenath and Anr. v. Rajesh and Ors. (AIR 1998 SC 1827) Processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. Procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice.
7.2 Thus in view of the above and considering the fact that the appeal of the assessee was dismissed for procedural requirement in ex-parte order by the learned CIT(A), we set aside the finding of the learned CIT-A and restore the issue to the file of the ld. CIT-A for fresh adjudication as per the provisions of law. Hence, the ground of appeal of the assessee is allowed for the statistical purposes.
8. In the result appeal of the assessee is hereby allowed for statistical purposes.
Order pronounced in the Court on 23/11/2022 at Ahmedabad.
