M/S ICON INFOTECH PVT LTD., MUMBAI V. DCIT 5(1)(1), MUMBAI

ITA 1020/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6751 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 10-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Period of limitation; Procedural lapse; TDS; Set aside
• Section: 143(3); 143(1); 143(2)

Judgement Text

ITA NO.1020/MUM/2020 A.Y. 2013 - 14 M/S ICON INFOTECH PVT. LTD. VS. DCIT - 5(1)(1) 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO.1020/MUM/2020 (ASSESSMENT YEAR: 2013 - 14) M/S ICON INFOTECH PVT. LTD. 2, 1 ST FLOOR, RABUNISSA MANZIL, OPP., GRANT ROAD STATION (W), MUMBAI 400 007 VS. DCIT 5(1)(1), AAYAKAR BHAWAN, MAHARSHI KARVE ROAD, CHURCHGATE, MUMBAI 400 020 PAN NO. AAACI7604K ( ASSESSEE ) ( REVENUE ) ASSESSEE BY : SHRI MAYUR MAKADIA , A.R REVENUE BY : MS. SHREEKALA PARDESHI, D.R DATE OF HEARING : 01/09 /2021 D ATE OF PRONOUNCEMENT : 02 /09/2021 ORDER PER RAVISH SOOD, J.M: THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 10, MUMBAI, DATED 02.12.2019 , WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O U/S 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 26.02.2016 FOR A.Y. 2013 - 14. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOW ING GROUNDS BEFORE US: 1. O N THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT ERRED IN SUMMARILY DISMISSING THE APPEAL FILED BY THE APPELLANT ON THE GROUNDS THAT THE SAME WAS FILED MANUALLY AND NOT ELECTRONICALLY AS REQUIRED IN TERMS OF REVISED RULE 45 SUBSTITUTED VIDE NOTIFICATION NO. SO 637 (E) DATED 01.03.2016 . 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT ERRED IN NOT APPRECI ATING THAT THE APPEAL WAS OTHER WISE FILED WITHIN THE PRESCRIBED TIME LIMIT ITA NO.1020/MUM/2020 A.Y. 2013 - 14 M/S ICON INFOTECH PVT. LTD. VS. DCIT - 5(1)(1) 2 AND THAT THERE WAS ONLY A PROCEDURAL LAPSE ON THE PART OF THE APPELLANT IN FILING THE APPEAL MANUALLY RATHER THAN ELECTRONICALLY. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DISALLOWING A SUM OF RS.1,77,180/ - PAID BY THE APPE LLANT ON ACCOUNT OF LATE DELIVERY CHARGES. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING CREDIT OF TDS OF ONLY RS.6,70,664 INSTEAD OF RS.10,76,219 THEREBY DENYING A CREDIT OF RS.4,05,555 EVEN THOUGH THE INCOM E CORRESPONDING TO THE TDS HAD ALREADY BEEN OFFERED. 5. THE APPELLANT RESERVES IS RIGHT TO ADD, AMEND ALTER OR DELETE ANY OF THE GROUNDS OF APPEAL. 2. BRIEFLY STATED, THE ASSESSEE COMPANY HAD E - FILED ITS RETURN OF INCOME FOR A.Y. 2013 - 14 ON 30.09.2013, DECLARING A TOTAL INCOME OF RS.61,33,960/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE COMPANY WAS INITIALLY PROCESSED AS SUCH U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE OF THE ASSESSEE W AS SELECTED FOR SCRUTINY ASSESSMENT U/S 143(2) OF THE ACT. 3. ASSESSMENT ORDER WAS FRAMED BY THE A.O WHEREIN THE INCOME OF THE ASSESEE WAS ASSESSED AT RS.63,37,320/ - , AFTER MAKING THE FOLLOWING ADDITIONS/DISALLOWANCES: SR. NO. PARTICULARS AMOUNT 1. AIR MISMATCH RS.5,775/ - 2. ADDITION OF DIVIDEND RECEIVED FROM CO - OPERATIVE BANK RS.20,400/ - 3. ADDITION OF LATE DELIVERY CHARGES RS.1,77,180/ - 4. AGGRIEVED, THE ASSESSEE ASSAILED THE IMPUGNED ASSESSMENT BY MANUALLY FILING AN APPEAL BEFORE THE CIT(A). IT WAS OBSERVED BY THE CIT(A) THAT THE CBDT VIDE NOTIFICATION NO. SO 637(E) [NO.11/2016 (F.NO.14/150/2015 - TPL)], DATED 01.03.2016 HAD SUBSTITUTED R ULE 45 OF THE INCOME TAX RULES, 1962, AND THEREIN MADE IT COMPULSORY FOR E - FILING OF APPEALS BEFORE THE COMMI SSIONER OF INCOME TAX (APPEALS) W.E.F 01.03.2016 IN RESPECT OF PERSONS WHO WERE REQUIRED TO FILE RETURNS OF INCOME ELECTRONICALLY. IT WAS FURTHER NOTICED BY THE CIT(A) THAT THE CBDT TAKING COGNIZANCE OF THE FACT THAT AS IN SOME CASES THE TAX PAYERS WHO WER E REQUIRED TO E - FILE FORM 35 WERE UNABLE TO DO SO DUE TO LACK OF KNOWLEDGE ITA NO.1020/MUM/2020 A.Y. 2013 - 14 M/S ICON INFOTECH PVT. LTD. VS. DCIT - 5(1)(1) 3 ABOUT E - FILING PROCEDURE AND/OR TECHNICAL ISSUE S , THUS, HAD VIDE ITS CIR CULAR NO. 20/2016 [F.NO.279/MISC/M - 54/2016/ITJ], DATED 26.05.2016 DEFERRED THE EVC FUNCTIONALITY FOR VERIFICATION OF E - APPEALS AND MADE THE SAME OPERATIONAL FROM 12.05.2016 FOR INDIVIDUAL S AND FROM 19.05.2016 FOR OTHER PERSONS. BACKED BY THE AFORESAID FACTS , THE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE IN QUESTION BEING A PERSON WHO WAS REQUIRED TO HAVE FILED HIS APPEAL IN ELECTRONIC FORM LATEST BY 15.06.2016, HAD HOWEVER, FAILED TO DO SO, THEREFORE , THE APPEAL FILED BY HIM MANUALLY WAS TO BE TREATED AS INVALID AB - INITIO AS PER SEC. 249(1) OF THE ACT. THE AFORESAID FACTS WERE BROUGHT TO THE NOTICE OF THE ASSESSEES REPRESENTATIVE DURING THE COURSE OF APPELLATE PROCEEDINGS , WHO IS STATED TO HAVE ADMITTED THAT THE APPEAL SO FILED WAS NOT AS PER THE PROCEDURE PRESCRIBED UNDER THE ACT, AND THUS, WAS NOT A VALID APPEAL. IN THE BACKDROP OF THE AFORESAID FACTS, THE CIT(A) DISMISSED THE APPEAL THAT WAS MANUALLY FILED BY THE ASSESSEE , AS NOT MAINTAINABLE, BUT A T THE SAME TIME OBSERVED THAT THE DISMISSAL OF THE APPEAL WOULD NOT CAUSE ANY PREJUDICE TO THE APPEAL THAT MAY SUBSEQUENTLY BE FILED ELE CTRONICALLY. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE THAT THE APPEAL HAD BEEN DISMISSED IN LIMINE, FO R THE REASON, THAT THE SAME WAS NOT FILED AS PER THE PROCEDURE CONTEMPLATED IN LAW. IT WAS SUBMITTED BY THE LD. A.R THAT AS THE CHANGE IN THE PROCEDURE FOR E - FILING OF THE APPEALS WAS AT ITS NASCENT STAGE , THEREFORE, THERE WAS AN INADVERTENT MISTAKE ON THE PART OF THE ASSESSEE IN FILING THE SAME AS PER THE OLD PROCEDURE. ON A SPECIFIC QUERY BY THE BENCH AS TO WHETHER THE APPEAL WAS ELECTRONICALLY FILED WHEN THE AFORESAID MISTAKE WAS BROUGHT TO THE ASSESSEES NOTICE, THE LD. A.R FAIRLY ADMITTED THAT THE SAME WAS SO FILED ONLY AFTER THE ORDER OF THE CIT(A) DISMISSING THE APPEAL FOR THE AFORESAID TECHNICAL DEFAULT WAS RECEIVED BY THE ASSESSEE. IN THE BACKDROP OF THE AFORESAID FACTS, IT WAS SUBMITTED BY THE LD. A.R ITA NO.1020/MUM/2020 A.Y. 2013 - 14 M/S ICON INFOTECH PVT. LTD. VS. DCIT - 5(1)(1) 4 THAT AS THE MISTAKE IN NOT FILING THE APPEAL AS PER THE PRESCRIBED PROCEDURE WAS FOR BONAFIDE REASONS, THEREFORE, IN ALL FAIRNESS, THE MATTER MAY BE RESTORE D TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ON A PERUSAL OF THE ORDER OF THE CIT(A), WE FIND THAT THE APPEAL OF THE ASSESSEE WAS DISMISSED , FOR TH E REASON , THAT THE SAME NOT HAVING BEEN FILED ELECTRONICALLY , WAS THUS , NOT IN CONFORMITY WITH THE PROCEDURE CONTEMPLATED IN RULE 12(3) OF THE INCOME TAX RULES, 1962. WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION AND FIND THAT THE ISSUE HE REIN INVOLVED IS SQUARELY COVERED BY AN ORDER OF A COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ALL INDIA FEDERATION OF TAX PRACTITIONER, MUMBAI, VS. ITO (E) - 1(2), MUMBAI [ITA NO. 7134/MUM/2017, DATED 04.05.2018] . IN THE AFOREMENTIONED CASE, IT WAS OBSE RVED BY THE TRIBUNAL THAT AS THE DEFAULT ON THE PART OF AN ASSESSEE IN FILING THE APPEAL IN PAPER FORM WAS MERELY A TECHNICAL DEFECT WHICH COULD NOT BE ALLOWED TO OVERSHADOW THE CAUSE OF SUBSTANTIAL JUSTICE, THEREFORE, IT HAD SET - ASIDE THE ORDER OF THE C IT(A) , WITH A DIRECTION TO HIM TO CONSIDER THE APPEAL FILED ELECTRONICALLY BY THE ASSESSEE, OBSERVING AS UNDER: 6. WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS ORDERS PASSED BY THE REVE NUE AUTHORITIES. FROM THE RECORDS WE NOTICED THAT ELECTRONICALLY FILING OF THE APPEALS WAS INTRODUCED FOR THE FIRST TIME VIDE RULE 45 OF I.T. RULES 1962, MANDATING COMPULSORY E - FILING OF APPEALS BEFORE APPELLATE COMMISSIONER WITH EFFECT FROM 1 ST MARCH 2016. WE NOTICED THAT IN THIS RESPECT, THERE IS NO CORRESPONDING AMENDMENT IN ANY OF THE PROVISIONS OF THE SUBSTANTIVE LAW I.E I.T. ACT, 1961. AS PER THE FACTS OF THE PRESENT CASE, THE ASSESSMENT IN THE ABOVE CASE WAS COMPLETED U/S 143(3) OF THE I.T. ACT 1961 . HOWEVER THE ASSESSEE HAS FILED APPEAL BEFORE LD. CIT(A) IN PAPER FORM AS PRESCRIBED UNDER THE PROVISIONS OF I.T. ACT 1961 WITHIN THE PRESCRIBED PERIOD OF LIMITATION. BUT THE SAME WAS DISMISSED ITA NO.1020/MUM/2020 A.Y. 2013 - 14 M/S ICON INFOTECH PVT. LTD. VS. DCIT - 5(1)(1) 5 BY LD. CIT(A) BY HOLDING THAT ASSESSEE HAD NOT FILED APPEAL T HROUGH ELECTRONIC FORM, WHICH IS MANDATORY AS PER I.T. RULES 1962. AFTER HAVING CONSIDERED THE ENTIRE FACTUAL POSITION, WE FIND THAT HONBLE SUPREME COURT IN THE CASE OF STATE OF PUNJAB VS. SHYAMALAL MURARI AND OTHERS REPORTED IN AIR 1976 (SC) 1177 HAS CATEGORICALLY HELD THAT COURTS SHOULD NOT GO STRICTLY BY THE RULEBOOK TO DENY JUSTICE TO THE DESERVING LITIGANT AS IT WOULD LEAD TO MISCARRIAGE OF JUSTICE. IT HAS BEEN REITERATED BY THE HONBLE SUPREME COURT THAT ALL THE RULES OF PROCEDURE ARE HANDMAI D OF JUSTICE. THE LANGUAGE EMPLOYED BY THE DRAFTSMAN OF PROCEDURAL LAW MAY BE LIBERAL OR STRINGENT, BUT THE FACT REMAINS THAT THE OBJECT OF PRESCRIBING PROCEDURE IS TO ADVANCE THE CAUSE OF JUSTICE. THE HONBLE APEX COU RT HAS SAID IN AN ADVERSARIAL SYSTE M, NO PARTY SHOULD ORDINARILY BE DENIED THE OPPORTUNITY OF PARTICIPATING IN THE PROCESS OF JUSTICE DISPENSATION. THE HONBLE SUPREME COURT IN ITS JUDGEMENT REPORTED AS AIR 2005 (SC) 3304 IN THE CASE OF RANI KUSUM VRS. KANCHAN DEVI, REITERATED THAT, A P ROCEDURAL LAW SHOULD NOT ORDINARILY BE CONSTRUED AS MANDATORY, AS IT IS ALWAYS SUBSERVIENT TO AND IS IN AID OF JUSTICE. ANY INTERPRETATION, WHICH ELUDES OR FRUSTRATES THE RECIPIENT OF JUSTICE, IS NOT TO BE FOLLOWED. FROM THE FACTS OF THE PRESENT CASE, WE GATHERED THAT THE ASSESSEE HAD ALREADY FILED THE APPEAL IN PAPER FORM, HOWEVER ONLY THE E - FILING OF APPEAL HAS NOT BEEN DONE BY THE ASSESSEE AND ACCORDING TO US, THE SAME IS ONLY A TECHNICAL CONSIDERATION. IN THIS RESPECT, WE RELY UPON THE JUDGEMENT OF HON BLE SUPREME COURT, WHEREIN THE HONBLE SUPREME COURT HAS REITERATED THAT IF IN A GIVEN CIRCUMSTANCES, THE TECHNICAL CONSIDERATION AND SUBSTANTIAL JUSTICE ARE PITTED AGAINST EACH OTHER , THEN IN THAT EVENTUALITY THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED AND CANNOT BE OVERSHADOWED OR NEGATIVE BY SUCH TECHNICAL CONSIDERATIONS. APART FROM ABOVE WE HAVE ALSO NOTICED THAT THE COORDINATE BENCH OF HONBLE ITAT DELHI BENCH IN APPEAL ITA NO. 6595/DEL/16 IN CASE TITLED GURINDER SINGH DHILLON VRS. ITO HAD RESTORED THE MATTER TO THE FILE OF LD. CIT(A) UNDER IDENTICAL CIRCUMSTANCES WITH A DIRECTION DO DECIDE APPEAL AFRESH ON MERIT, AFTER CONDONING THE DELAY, IF ANY. SINCE IN THE PRESENT CASE, WE FIND THAT APPEAL IN THE PAPER FORM WAS ALREADY WITH LD. CI T(A), THEREFORE IN THAT EVENTUALITY THE LD. CIT(A) OUGHT NOT TO HAVE DISMISSED THE APPEAL SOLELY ON THE GROUND THAT THE ASSESSEE HAS NOT FILED THE APPEAL ELECTRONICALLY BEFORE THE APPELLATE COMMISSIONER. ITA NO.1020/MUM/2020 A.Y. 2013 - 14 M/S ICON INFOTECH PVT. LTD. VS. DCIT - 5(1)(1) 6 KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES AS WELL AS THE CASE LAWS DISCUSSED AND RELIED UPON ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE CAUSE OF JUSTICE WOULD BE SERVED IN CASE, WE SET ASIDE THE ORDERS OF LD. CIT(A) & ALLOW THE PRESENT APPEAL. WHILE SEEKING THE COMPLIANCE, WE DIRECT THE ASSESSEE TO FI LE THE APPEAL ELECTRONICALLY WITHIN 10 DAYS FROM THE DATE OF RECEIPT OF THIS ORDER. IN CASE, THE DIRECTIONS ARE FOLLOWED THEN IN THAT EVENTUALITY, THE DELAY IN E - FILING THE APPEAL SHALL STAND CONDONED. LD. CIT(A) IS FURTHER DIRECTED TO CONSIDER THE APPEAL FILED BY THE ASSESSEE ON MERITS BY PASSING A SPEAKING ORDER. RESULTANTLY, WE ALLOW THE APPEAL FILED BY THE ASSESSEE. 7. IN THE NET RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 8. WE HAVE PERUSED THE AFORESAID ORDER OF THE TRIBUNAL AND CONCURRING WITH THE VIEW THEREIN TAKEN, RESPECTFULLY FOLLOW THE SAME. ACCORDINGLY, IN THE BACKDROP OF THE FACTS INVOLVED IN THE CASE BEFORE US, THE APPEAL , IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE IS RESTORED TO THE FILE OF THE CIT(A). THE CIT(A) IS DIRECTED TO CONSIDER THE APPEAL WHICH WAS ELECTRONICALLY FILED BY THE ASSESSEE AS HAVING BEEN FILED ON THE DATE ON WHICH THE SAME W AS MANUALLY FILED IN PAPER FORM I.E ON 2 8.03 .2016 AND DISPOSE OFF THE SAME ON MERITS BY WAY OF A SPEAKING ORDER. NEEDLESS TO SAY, THE CIT(A) WHILE DISPOSING OFF THE APPEAL SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ORDER PASSED BY THE CIT(A) IS SET - ASIDE , AND THE MATTER IS RESTORED TO HIS FILE FOR FRESH ADJUDICATION IN TERMS OF OUR AFORESAID OBSERVATIONS. 9 . THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN COURT ON 02 .09.2021 SD/ - SD/ - ( SHAMIM YAHYA ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 02 .09 .2021 PS: ROHIT ITA NO.1020/MUM/2020 A.Y. 2013 - 14 M/S ICON INFOTECH PVT. LTD. VS. DCIT - 5(1)(1) 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI