Procedural technicalities should not outweigh the goal of substantial justice: ITAT, Agra
The decision in Aastitva Jain Family Trust vs. Income-Tax Officer, CPC, Bengaluru (ITA No. 88/Agr/2024) dated January 17, 2025, underscores several critical aspects of income tax appeals, particularly the issue of delay in filing appeals before the CIT (A) under Section 249(2) of the Income Tax Act.
Below is a summary and analysis based on the facts and decision rendered by the ITAT Agra Bench
Filing of Return and Processing:
The assessee filed its return of income belatedly under Section 139(4) on February 18, 2017, declaring an income of ₹2,41,000/-.
The CPC processed the return under Section 143(1) and issued an intimation/order dated October 19, 2017, accepting the returned income but applying the maximum marginal rate (MMR) of taxation.
Appeal Before CIT(A):
The assessee filed an appeal before the CIT(A) on November 4, 2023, after a delay of 2,176 days beyond the time prescribed under Section 249(2).
The CIT(A) dismissed the appeal solely on the ground of limitation, concluding that no sufficient or bona fide cause was provided by the assessee for the delay
Decision of ITAT Agra Bench Lack of Enquiry on Service of Intimation:
The ITAT noted that the CIT(A) failed to conduct any enquiry into the manner in which the intimation under Section 143(1) was served on the assessee.
Proper service of notice is governed by Section 282 of the Income Tax Act and Rule 127 of the Income Tax Rules, which require adherence to specific modes of service.
Principles of Natural Justice:
Citing the judgment of the Punjab & Haryana High Court in Munjal BCU Centre of Innovation and Entrepreneurship v. CIT(E), the ITAT observed that mere uploading of the intimation/communication on the income tax e-portal does not satisfy the requirement of valid service.
Natural justice principles mandate that the assessee must be given a fair opportunity to comply and respond.
Advancement of Substantial Justice:-
Referring to the Supreme Court’s decision in Collector of Land Acquisition, Anantnag v. Mst. Katiji, the ITAT emphasized that procedural technicalities should not outweigh the goal of substantial justice.
A lenient approach is warranted in matters of condonation of delay when the delay is caused due to genuine and bona fide reasons.
Remand to CIT(A)
The ITAT restored the matter to the CIT(A) for fresh adjudication on the application for condonation of delay.
The CIT(A) was directed to Conduct an enquiry into whether the service of intimation under Section 143(1) complied with Section 282 and Rule 127. ITAT directed to decide the application for condonation of delay after considering the facts, judicial precedents, and submissions of the assessee.
If the delay is condoned, adjudicate the appeal on merits.
Reference
Mumbai ITAT Phoenix Mills Limited v. ACIT, Mumbai in ITA no. 6240/M/2007
Hon’ble Supreme Court- United Bank of India v. Naresh Kumar (1996) 6 SCC 660
Hon’ble Allahabad High Court – Bharat Auto Centre v. CIT, (2006) 282 ITR 366(All)
The copy of the order is as under: