M/S.SPARKLE CLEAN TECH PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER WARD-1(3)(1), MUMBAI

ITA 2412/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 9897 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 19-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT SAMAIYA
• Assessee Lawyers: MRS RENU KAPOOR A RS
• Keywords: Opportunity of being heard; Period of limitation; Non compliance
• Section: 143(3)

Judgement Text

P A G E | 1 ITA NO.2412/MUM/2018 AY 2013 - 14 M/S SPARKLE CLEAN TECH PVT. LTD. VS. INCOME TAX OFFICER WARD - 1(3)(1) IN THE INCOME TAX APPELLATE TRIBUNAL ' G ' BENCH, MUMBAI BEFORE SHRI B.R.BASKARAN , ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 2412 /MUM/201 8 (ASSESSMENT YEAR: 2013 - 14 ) M/S SPARKLE CLEAN TECH PVT. , LTD. 5 - C, PREM KUTIR, 177, MARINE DRIVE, MUMBAI - 400 020 VS. INCOME TAX OFFICER, WARD - 1(3)(1), ROOM NO. 541, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 PAN AAACU8261C ASSESSEE REVENUE ASSESSEE BY: MRS. RENU KAPOOR , A.RS REVENUE BY: SHRI NISHANT SAMAIYA , D.R DATE OF HEARING: 25 .09.2018 DATE OF PRONOUNCEMENT: 2 6 .09.2018 O R D E R PER RAVISH SOOD, JM THE PRESE NT APPEAL FILED BY THE ASSESSEE COMPANY FOR A . Y 2013 - 14 IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 3, MUMBAI, DATED 26.03.2018 , WHICH IN TURN ARISES FROM THE ASSESSMENT ORDER PASSED UNDER SEC. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 07.03.2016. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEF ORE US THE FOLLOWING G ROUNDS OF APPEAL: 1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DISMISSING THE APPEALS AS INVALID, AB - INITIO APPEAL. 2. THE LEARNED CIT(APPEALS) IN THE INTEREST OF EQUITY AND JUSTICE SHOULD HAVE GIVEN AN OPPORTUNITY TO THE ASSESSEE TO RECTIFY THE DEFECT IN THE APPEAL MEMO IN FORM 35 . 3. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND THE ABOVE GROUND OF APPEAL. P A G E | 2 ITA NO.2412/MUM/2018 AY 2013 - 14 M/S SPARKLE CLEAN TECH PVT. LTD. VS. INCOME TAX OFFICER WARD - 1(3)(1) 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF WATER PURIFYING M ACHINES HAD FILED ITS RETURN OF INCOME FOR A . Y 2013 - 14 ON 30.09.2013, DECLARING TOTAL INCOME OF RS. NIL. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. THE A.O AFTER NECESSARY DELIBERATIONS ASSESSE D THE INCOME OF THE ASSESSEE AT RS. 28,23,760/ - . 3. AGGRIEVED, THE ASSESSEE ASSAILED THE ASSESSMENT ORDER BEFORE THE CIT(A). IT WAS NOTICED BY THE CIT(A) THAT THE ASSESSEE HAD FILED THE APPEAL MANUALLY IN PAPER FORM ON 05.04.2016 , AGAINST THE ORDER DATED 07.03.2016 PASSED BY THE INCOME TAX OFFICER 1(3)(1), MUMBAI UNDER SEC. 143(3) FOR A.Y 2013 - 14. THE CIT(A) OBSERVED THAT AS PER NOTIFICATION NO. S.O 637(E), DATED 1 ST MARCH, 2016, ISSUED BY THE CENTRAL B OARD OF DIRECT TAXES, NEW DEL HI, THE RULE 45 OF THE INCOME TAX RULE S 1962 WAS AMENDED , THEREIN MAKING IT MANDATORY FOR ALL THE PERSONS WHO WERE REQUIRE D TO FURNIS H THEIR RETURN OF INCOME ELECTRONI CALLY TO E - FILE THEIR APPEALS BEFORE THE APPELLATE C OMMISSIONER WITH EFFECT FROM 01.03.20 16. IN THE BACKDROP OF HIS A FORESAID OBSERVATIONS, THE CIT(A ) WAS OF THE VIEW THAT AS THE APPEAL WHICH WAS MANUALLY FILED BY THE ASSESSEE IN PAPER FORM WAS NOT IN CONFORMITY WITH RULE 12(3) OF THE INCOME TAX RULE 1962 , THUS , THE SAME WAS INVALID AB - INITIO . ACCORDINGLY , ON THE BASIS OF HIS AFORESAID OBSERVATIONS , THE CIT(A) DECLINED TO EXAMINE ANY OTHER ASPECT OF THE APPEAL AND TREAT ING IT AS NON EST , DISMISS ED THE SAME. 4. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER PASSED BY THE CIT(A) HAS CARRIED THE MAT TER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A . R) OF THE ASSESSEE SUBMITTED , THAT THE MANUAL FILING OF THE APPEAL WAS ON ACCOUNT OF AN INADVERTENT OVERSIGHT ON THE PART OF THE ASSESSEE OF THE AMENDED RULES, WHICH IN ITSELF WERE IN THEIR INFANCY STAGE . IT WAS SUBMITTED BY THE LD. A.R , THAT ON LEAR NING OF ITS AFORESAID MISTAKE, THE ASSESSEE HAD E - FILED THE APPEAL ON 13.04.2018 . F URTHER, IT WAS SUBMITTED BY THE LD. AR THAT THE TRIBUNAL AFT ER DELIBERATING ON THE BONAFIDES OF THE ASSESSEE , AS REGARDS THE NON COMPLIANCE OF RULE 45 OF THE INCOME TAX RULES, 1962, WHICH MANDATED COMPULSORY E - FILING OF APPEALS BEFORE THE APPELLATE COMMISSIONER P A G E | 3 ITA NO.2412/MUM/2018 AY 2013 - 14 M/S SPARKLE CLEAN TECH PVT. LTD. VS. INCOME TAX OFFICER WARD - 1(3)(1) WITH EFFECT FROM 01.03.2016, HAD IN THE CASE OF ALL IN DIA FEDERATION OF TAX PRACTITIONER S , MUMBAI, VS. ITO (E) - 1(2), MUMBAI [ITA NO. 7134/MUM/2017, DATED 04.05.2018] IN ALL FAIRNESS AND IN THE VERY INTEREST OF JUSTICE RESTRICTED THE APPEAL TO THE FILE OF THE CIT(A) WITH AN OPPORTUNITY TO THE ASSESSEE TO ELECTRONICALLY FILE THE APPEAL . IT WA S SUBMITTED BY THE LD. A.R , THAT NOW WHEN THE ASSESSEE HAD ALREA DY ELECTRONI CALLY FILED THE APPEAL BEFORE THE CIT(A), THUS , THE MATTER MAY BE RESTORED TO HIS FILE , WITH A DIRECTION TO DISPOSE O F F THE SAME ON MERITS. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D . R) RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE APPEAL OF THE ASSESSEE HAD BEEN DISMISSED BY THE CIT(A) , ON THE GROUND THAT THE SAME NOT HAVING BE EN FILED ELECTRONI CALLY , WAS THUS , NOT IN CONFORMITY WITH RULE 12(3) OF THE INCOME TAX RULE, 1962. WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION , AND FIND T HAT THE ISSUE INVOLVED THEREIN IS SQUARELY COVERED BY THE ORDER 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]. WE FIND THAT THE T RIBUNAL IN THE AFOREMENTIONED CASE , BEING OF THE VIEW THAT THE DEFAULT ON THE PART OF T HE ASSESSEE IN MANUALLY FILING THE APPEAL IN PAPER FORM WAS MERELY A TECHNICAL DEFECT, WHICH COULD NOT BE PREFERRED AND ALLOWED TO OVERSHADOW THE CAUSE OF SUBSTANTIAL JUSTICE. THE TRIBUNAL IN ITS AFORESAID ORDER , HAD OBSERVED 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 REVENUE AUT HORITIES. 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 NOT ICED 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. HOWEV ER 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 P A G E | 4 ITA NO.2412/MUM/2018 AY 2013 - 14 M/S SPARKLE CLEAN TECH PVT. LTD. VS. INCOME TAX OFFICER WARD - 1(3)(1) DISMISSED BY LD. CIT(A) BY HOLDING THAT ASSESSEE HAD NOT FILED APPEAL THROUGH 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 CATEGO RICALLY 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 HANDMAID OF JUSTIC E. 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 SYSTEM, 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 THA T, A PROCEDURAL 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 CAS E, 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 HONBLE 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 DESERV ES 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. CIT(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. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES A S 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 FILE 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 A PPEAL 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. P A G E | 5 ITA NO.2412/MUM/2018 AY 2013 - 14 M/S SPARKLE CLEAN TECH PVT. LTD. VS. INCOME TAX OFFICER WARD - 1(3)(1) WE HAVE PERUSED THE AFORESAID ORDER OF THE TRIBUNAL AND FINDING OURSELVES AS BEING IN AGREEMENT WITH THE VIEW THEREIN TAKEN, THUS , RESPECTFULLY FOLLOW THE SAME. IN THE BACKDROP OF THE FACTS INVOLVED IN THE CASE BEFORE US, THE APPEAL IN ALL FAIRNESS AND IN THE VERY INTEREST OF JUSTICE IS RESTORE D TO THE FILE OF THE CIT (A). THE CIT(A) IS DIRECTED TO CONSIDER THE APPEAL WHICH HAD BEEN E - FILED BY THE ASSESSEE , AS HAVING BEEN FILED ON THE DATE ON WHICH THE SAME WAS MANUALLY FILED IN PAPER FORM VIZ. 05.04.2016, AND DISPOSE OFF THE SAME ON MERITS BY WAY OF A SPEAKING ORDER. NEEDLESS TO SAY , THE CIT(A) WHILE DISPOSING OF F THE APPEAL SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ORDER OF THE CIT(A) IS SET ASIDE IN TERMS OF OUR AFORESAID OBSERVATIONS. 6. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 2 6 . 09.2018 S D / - S D / - ( B.R.BASKARAN ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 2 6 .09 .2018 PS. ROHIT / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) P A G E | 6 ITA NO.2412/MUM/2018 AY 2013 - 14 M/S SPARKLE CLEAN TECH PVT. LTD. VS. INCOME TAX OFFICER WARD - 1(3)(1) , / ITAT, MUMBAI