2021 (2) TMI 137 - HC - Income Tax

Madras High Court Upholds Tribunal's Decision on Delayed E-Appeals for 2007-08 Assessment Year

The High Court of Madras dismissed the Revenue's appeals challenging the delay in filing e-appeals by the assessee for the assessment year 2007-08. The ... Condonation of delay - extension of limitation by CBDT Circular - e-filing requirement under IT rules - substantive right of appeal - remittance to Commissioner (Appeals) for disposal on meritsCondonation of delay - extension of limitation by CBDT Circular - e-filing requirement under IT rules - substantive right of appeal - remittance to Commissioner (Appeals) for disposal on merits - Whether the Tribunal was justified in treating the belated e-appeal as within time by applying the CBDT circular, condoning delay and remitting the matter to the CIT(A) for decision on merits. - HELD THAT: - The Court followed its earlier decision in The Commissioner of Income Tax v. A.A. Antony (TCA.No.432 of 2020) and applied the reasoning therein. Noting that the CBDT Circular (Circular No.20/2016) operated as a one-time remedial measure at the relevant time, the Court held that the substantive right of appeal should not be defeated on a technicality where the circular extended the e-filing timelines and the procedural mechanism was nascent. The Court observed that directing the assessees back to the CIT(A) to file fresh condonation applications would cause unnecessary multiplicity of litigation and be unduly harsh, given the factual situation in 2016 when the e-filing regime was being rolled out. For these reasons the Tribunal's discretion in favour of the assessees was upheld and the appeals were remitted to the CIT(A) to be decided on merits in accordance with law. [Paras 4, 5]The appeal is dismissed; the Tribunal's order condoning delay and remitting the matter to the CIT(A) is upheld and the case is to be heard and decided on merits by the CIT(A).Final Conclusion: The Revenue's appeal is dismissed; following the Court's precedent and in view of the CBDT circularal relief at the relevant time, the Tribunal's exercise of discretion to condone delay is upheld and the matter is remitted to the Commissioner of Income Tax (Appeals) for adjudication on merits in accordance with law. Issues:- Appeal challenging order dated 13.06.2019 made in ITA.No.533/Chny/2019 for the assessment year 2007-08.- Substantial questions of law raised by the Revenue for consideration.- Interpretation of delay in filing e-appeal by the assessee.- Application of IT Rules and Circular 20/2016 in condoning the delay in filing the appeal.- Consideration of the judgment in The Commissioner of Income Tax vs A.A.Antony.- Discretion exercised by the Tribunal in favor of the assessee.- Dismissal of appeals by the Revenue based on low tax effect and application of Circular No. 20/16.- Length of delay in filing appeals by the Revenue.Analysis:The High Court of Madras heard an appeal filed by the Revenue challenging the order made by the Income Tax Appellate Tribunal for the assessment year 2007-08. The Revenue raised substantial questions of law regarding the delay in filing e-appeal by the assessee, questioning the Tribunal's decision to remit the case back for disposal on merits and condone the delay. The Tribunal's decision was influenced by a previous judgment in The Commissioner of Income Tax vs A.A.Antony, where it was noted that the substantive right of appeal should not be denied on technical grounds, considering the Circular issued by CBDT as a one-time measure.The Tribunal's discretion in favor of the assessee was based on the fact that the Circular 20/2016 extended the time for filing e-appeals, preventing the rejection of appeals solely based on technical grounds. The Court acknowledged that directing the assessees to file applications for condonation of delay would lead to further litigation, which was deemed unnecessary. The Court also noted that all appeals filed by the Revenue would have been dismissed due to low tax effect if not for the application of Circular No. 20/16.The Revenue argued that the delay in filing appeals ranged from more than 400 days to over 900 days in different cases. However, the Court, considering the prevailing circumstances and the CBDT Circular, dismissed the Revenue's appeals, following the precedent set in a specific case. The Court directed that the appeal shall be heard by the Commissioner of Income Tax (Appeals) and decided on merits, leaving the substantial questions of law open for consideration. No costs were awarded in this judgment.