Case Law Details
Atlantic Bio Medical Pvt. Ltd. Vs DCIT (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT) Mumbai has ruled in favor of Atlantic Bio Medical Pvt. Ltd., allowing the condonation of a 314-day delay in filing an appeal against the disallowance of deductions under Sections 80IC and 43B of the Income Tax Act, 1961. The appeal was initially dismissed by the Commissioner of Income Tax (Appeals) [CIT(A)] solely on the grounds of delay, without examining the merits of the case. The tribunal held that the delay was not deliberate but caused by a genuine misunderstanding of filing requirements.
The assessee attributed the delay to its accountant, who was responsible for handling tax matters. The accountant mistakenly believed that Form 10CCB, required for claiming deductions under Section 80IC, could be filed manually with the Assessing Officer rather than electronically with the income tax return. The intimation order denying deductions was sent to the accountant’s email in October 2018, but the company was only informed in January 2019. The assessee argued that this was a case of bona fide oversight rather than intentional non-compliance.
The Revenue opposed the condonation, arguing that the delay reflected negligence and a lack of due diligence. However, the tribunal referred to the Supreme Court’s decision in Land Acquisition Collector vs. MST Katiji & Others [(1987) 167 ITR 471 (SC)], which held that substantial justice should take precedence over technical lapses. The Supreme Court emphasized that when technicalities and justice are in conflict, courts should favor substantial justice to prevent undue hardship.
Considering the circumstances, the ITAT Mumbai ruled that the assessee had demonstrated a reasonable cause for the delay and should be given a fair opportunity to present its case. The appeal was remitted back to CIT(A) for fresh adjudication on merits, ensuring the assessee’s right to a fair hearing. The decision reinforces the principle that procedural lapses should not override the right to justice, particularly when delays are not intentional.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
Present appeal filed by the appellant, M/s. Atlantic Bio Medical Pvt. Ltd. (hereinafter referred to as ‘the assessee’) challenging the impugned order passed by Commissioner of Income Tax (Appeals), Delhi (hereinafter referred to as CIT(A)] dismissing the appeal of the assessee without going into the merits on ground of delay of 314 days in filing the appeal on the ground that assessee has failed to bring on record any sufficient cause to condone the delay.
2. Assessee by moving an application supported with affidavit filed by Mr. Varun Ravi Vazirani sought to condone the delay of 314 days in filing the appeal before the Ld. CIT(A) on the grounds inter alia that the Board of Director of the company used to do outsource accounting and tax relating work from Mr. Dhananjay Vishwakarma for the last 20 years who has opened a separate e- mail ID i.e. 3fconsultant@gmail.com for the record of Income Tax Department and provided the same on the e-filing portal of the company; that all the notices and orders relating to any income tax matters sent by the Income Tax Department have been received by the accountant on the said e-mail ID; that intimation order dated 30.10.2018 was passed in the case of the assessee for A.Y. 2017-18 by disallowing the claim of deduction under section 80IC of the Income Tax Act (for short ‘the Act’) and expenses under section 43B of the Act, which was sent by CPC on 31.10.2018 on e-mail ID “3fconsultant@gmail.com” provided by the accountant; that only in the last week of January 2019 accountant informed the assessee regarding intimation order under section 143(1) of the Act denying the deduction under section 80IC of the Act and making disallowance under section 43B merely for non filing of the Form 10CCB electronically along with the return of income; that accountant informed the assessee that he has filed the return of income and the audit report well within time and he has also obtained Form 10CCB before the due date of filing the return of income, but he was under bonafide belief that the same is to be filed manually with the Assessing Officer (AO) as and when required and as such did not file the same electronically along with the return of income. Hence, the delay in filing the appeal is not deliberate nor due to any malafide intention but under the bonafide belief of the accountant.
3. However, on the other hand, the Ld. D.R. for the Revenue opposed the application for condonation of delay on the ground that the late filing of appeals in this case is apparently malafide due to callous attitude of the assessee and prayed for dismissal of the application.
4. We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto.
5. Bare perusal of the submissions made by the assessee by way of affidavit seeking condonation of delay shows that the assessee had undisputedly filed the return of income electronically but under bonafide belief that the Form 10CCB was to be filed manually with the AO as and when required thus failed to file the same electronically along with the return of income. No doubt ignorance of law is no excuse but keeping in view the fact that it was first year of filing the return of income along with Form 10CCB electronically and due to human error and under bonafide belief assessee has failed to file the same electronically which was well within their notice.
6. Hon’ble Supreme Court in case of Land Acquisition Collector vs. MST Katiji & Others 167 ITR 471 (SC), while deciding the issue as to how the condonation of delay is to be examined, held that in order to advance the cause of justice technical considerations are immaterial by returning following findings:
“When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay.”
7. So we are of the considered view that assessee has brought on record sufficient causes to condone the delay of 314 days in filing the appeal, which is accordingly condoned as the assessee has the right to be heard on merits. So in these circumstances, we hereby condone the delay of 314 days in filing the appeal by the assessee before the Ld. CIT(A) and consequently present appeal is being remitted back to Ld. CIT(A) to decide afresh on merits after providing opportunity of being heard to the assessee.
8. Appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 25.08.2022.
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