[Case Brief] All India Federation of Tax Practitioners vs ITO, 2018

Case NameAll India Federation of Tax Practitioners vs ITO
Case numberI.T.A. No. 7134/Mum/2017
Court/TribunalITAT- Mumbai
BenchB. R. Baskaran (Accountant Member), Sandeep Gosain (Judicial Member)
Author of the orderShri Sandeep Gosain
Date of orderMay 4, 2018
Relevant Act/Sections1) Income Tax Act- Section 250

2) Income Tax Rules- Rule 45
Author of the case briefSaloni Gupta

Brief Facts and Procedural History-

The assessee, in the instant case, is a trust registered with DIT€, Mumbai u/s 12A and with Charity Commissioner, Mumbai. The assessee filed its return of income on 29.09.11 along with the income and expenditure account, balance sheet and audit report in form 10B declaring total income at Rs. 1,81,777/-. Thereafter, assessment for AY 2013-14 was completed by order u/s 143(3) of the I.T. Act on 17.02.16 at taxable income of Rs. 14,22,664/-. The assessee preferred an appeal before CIT(A) and CIT(A) dismissed the appeal noting that the mandatory requirement of e-filing of appeal under Rule 45 of IT Rules 1962 was not fulfilled by the assessee.

Issues before the Tribunal-

Whether the CIT(A) was right in dismissing the appeal filed by the assessee solely on the ground of the assessee not filing the appeal electronically?

Arguments advanced-

Contentions of the appellant

  • The said default by the assessee is of technical nature only and it was introduced for the first time in the books of the statute, thus the Court should not have refused to hear the appeal on merits by only relying on the procedural defect.
  • The CIT erred in denying an opportunity of appeal to the assessee which has resulted in denial of justice to the assessee.

Contentions of the respondent

  • The respondents squarely supported the order passed by the revenue authorities.

The ratio of the court-

Electronic filing of appeals was introduced for the first time by virtue of rule 45 of IT rules which was to be followed mandatorily from 01/03/2016. The Tribunal held that this requirement was only technical in nature. The assessee had filed an appeal before CIT(A) in paper form within the prescribed period of limitation but not in electronic form. The Tribunal relied on judgments of the Supreme Court like State of Punjab vs. Shyamalal Murari; Rani Kusum vs Kanchan Devi et al to hold that procedural law should not be construed as mandatory but always subservient to and in the aid of justice. The CIT(A) should not have dismissed the appeal solely on a technical ground.

Decision Held-

The appeal was allowed and the assessee was directed to file appeal electronically within 10 days from the receipt of the order.