Income Tax Appellate Tribunal - Kolkata
M/S. Jeevandarshi Marketing Pvt. Ltd., ... vs I.T.O., Ward - 6(2), Kolkata, Kolkata on 28 November, 2022
। आयकर अपीलीय अिधकरण यायपीठ, कोलकाता ।
IN THE INCOME TAX APPELLATE TRIBUNAL
"SMC" BENCH, KOLKATA
BEFORE SHRI RAJESH KUMAR, HON'BLE ACCOUNTANT MEMBER
I.T.A. No. 509/Kol/2022
Assessment Year: 2019-2020
M/s. Jeevandarshi Marketing Pvt. Ltd. Income Tax Officer, Ward-6(2), Kolkata
4th Floor Vs
9, India Exchange Place
Kolkata - 700001
[PAN : AAACJ8585A]
अपीलाथ / (Appellant) यथ / (Respondent)
Assessee by : Shri Sunil Surana, A/R
Revenue by : Shri P.P. Barman, Addl. CIT, D/R
सुनवाई क तारीख/ Date of Hearing : 24 /11/2022
घोषणा क तारीख / Date of Pr onouncement: 28/ 11/2 022
आदेश/O R D E R
PER SHRI RAJESH KUMAR, ACCOUNTANT MEMBER :
The present appeal is directed at the instance of the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter the "ld. CIT(A)") dt. 23/08/2022, passed u/s 250 of the Income Tax Act, 1961 ("the Act'), for Assessment Year 2019-2020.
2. The sole issue raised by the assessee is against the order of the ld. CIT(A) confirming the order of the Assessing Officer wherein the Assessing Officer had disallowed the carry forward of business loss of Rs.72,96,597/- on the ground that the return was filed on 01/11/2019 whereas the due date of filing was on 31/10/2019.
3. Facts in brief are that the assessee filed the return of income on 01/11/2019 declaring total loss at Rs.72,96,596/-. The same was processed by the Central Processing Centre (CPC), Bengaluru u/s 143(1) of the Act vide intimation dt. 30/04/2020, wherein the claim of the assessee of carry forward of loss to subsequent year was rejected on the ground that the return was filed on 01/11/2019.
4. Aggrieved the assesse carried the matter in appeal before the ld. CIT(A). The ld. CIT(A) simply dismissed the appeal of the assessee by I.T.A. No. 509/Kol/2022 Assessment Year: 2019-2020 M/s. Jeevandarshi Marketing Pvt. Ltd.
2confirming the order of the Assessing Officer on the ground that the return was filed beyond the due date and, therefore, credit of carry forward loss of Rs.72,96,596/- was not available to the assessee as per the provisions of the Act.
4. We have heard rival contentions and perused the material available on record. The undisputed facts are that the assessee had filed its return of income on 01/11/2019 as is apparent from the copy of acknowledgement furnished by the assessee. We observe from the said acknowledgement filed by the assessee that the same was delayed by 2 minutes 7 seconds. The assessee submitted before us that on the last date of filing, the system/portal of the Income Tax Department was overloaded and was not accepting the return despite the fact that but the assesse tried diligently to upload the same. The ld. A/R submitted that the delay in filing of the return by 2 minutes 7 seconds is purely due to malfunctioning of the system and, therefore, cannot be attributed to the assessee. The ld. A/R argued before us that the mere delay of few minutes in filing of the return that too because of the fault in the system/portal of the Income Tax Department, the assessee cannot be denied the benefit of carry forward of loss. The ld. A/R prayed before the Bench that the case of the assessee deserves to be considered leniently and be allowed by setting aside the order of the ld. CIT(A) and allowing the appeal of the assessee. The ld. A/R cited before us, the decision of the Co-ordinate Bench in the case of Dy. CIT vs. M/s. Palava Dwellers Pvt. Ltd. in ITA No. 2147/Mum/2018; Assessment Year 2014-15, order dt. 20/02/2020 and submitted that the Co-ordinate Bench has dealt with an identical issue wherein the delay of two minutes was there. The Hon'ble Tribunal while condoning the delay held that the delay of mere two minutes cannot be considered as malafide which was purely due to technical glitches and last hour rush. Relevant part of the decision is reproduced as under:-
I.T.A. No. 509/Kol/2022 Assessment Year: 2019-2020 M/s. Jeevandarshi Marketing Pvt. Ltd.3
"22. We have heard the rival submissions, perused the orders of the authorities below and the decisions relied on. In this case the assessee filed its return of income on the last day of filing of return i.e. on 30.11.2014. However, due to technical glitch and last hour rush on the website the return got uploaded past midnight by 00:02AM on 01.11.2014. Thus, the return was delayed by two minutes. Subsequently the assessee filed revised return of income on 31.03.2016 making some adjustments and also to give effect to the merger of two entities as approved by the Hon'ble Bombay High Court. However, while completing the assessment the Assessing Officer ignored the revised return of income on the ground that the assessee filed original return of income belatedly as the return was filed only at 00:02 AM on 01.12.2014. Accordingly, Assessing Officer computed income of the assessee by denying the deduction u/s. 80IB(10) of the Act even though the Assessing Officer has quantified allowable deduction u/s. 80IB(10) of the Act, made disallowance u/s. 36(1)(iii) of the Act, disallowance u/s. 14A of the Act, disallowance of business promotion expenses. Apart from these disallowances the Assessing Officer considered even the suomoto adjustments i.e., the disallowance of ₹.4.0572 crores as made by the assessee in its revised return of income for disallowance while computing the income by the Assessing Officer. This shows the Assessing Officer in fact partly acted upon the revised return filed by considering the adjustments as made by the assessee for disallowance in the revised return. The Assessing Officer further conveniently ignored the deductions of ₹.8.165 crores claimed by the assessee in the revised return of income.
23. As far as the technical glitch and last hour rush and consequently whether the return filed by the assessee with a delay of two minutes can be considered as the return filed in time is concerned, in the case of Bombay Mercantile Co-op. Bank Ltd., v. CBDT [322 ITR 87] the Hon'ble Jurisdictional High Court held as under:
"8. It is well settled that in matters of condonation of delay a highly pedantic approach should be eschewed and a justice oriented approach should be adopted and a party should not be made to suffer on account of technicalities."
24. The Hon'ble Bombay High Court in the case of Cosme Matias Menezes (P.) Ltd. v. CIT [379 ITR 31] observed as under: -
"9. Reading the said provisions, we find that Section 139 and 239 of the said Act itself allows for filing of the returns and claim of refund within a period of one year from the end of the assessment year i.e. on or before 31.03.2008. The provisions of Section 119(2)(b) of the Act allow the CBDT to admit an application beyond the time prescribed under Section 139 and Section 239 of the said Act. In the present case we find that the Respondents have failed to exercise such powers to condone the delay in filing returns and consequent refund by the Petitioners on irrelevant and extraneous reasons.
I.T.A. No. 509/Kol/2022 Assessment Year: 2019-2020 M/s. Jeevandarshi Marketing Pvt. Ltd.4
10. This Court in the Judgment in the case of M/s. Bombay Mercantile Co- op Bank Ltd vs. The Central Board of Direct Taxes & Others (supra), has observed at para 8 thus:
"8. It is well settled that in matters of condonation of delay a highly pedantic approach should be eschewed and a justice oriented approach should be adopted and a party should not be made to suffer on account of technicalities."
11. Taking note of the said observations and considering that the delay in the present case is only of one day, we find that the approach of the Respondents in refusing to condone the delay is a pedantic which, if allowed to stand, would result in great hardship to the Petitioners for no fault of the Petitioners. The Petitioners have also produced the hard copy to show that in fact such return in Form - 1 were filed on 31.03.2008 which was admittedly the last date for filing such returns. This factual aspects have not been disputed by the Respondents. Needless to say, we have not examined the merits of the claim of the Petitioners based on the returns filed by the Petitioners but only considered whether the delay in filing such returns deserves to be condoned. Such returns and the claim of the Petitioners have to be examined by the Respondents on its own merits."
25. Hon'ble Delhi High Court in the case of Lodhi Property Co. Ltd. v. Under Secretary (ITA-II) Department of Revenue [323 ITR 441] observed as under: -
"7. In view of the foregoing, it is absolutely clear that the submissions sought to be raised before us by the learned counsel for the respondent have specifically and categorically been rejected by the Karnataka High Court and the same have been accepted not only by the Board, but also by the Ministry of Law. We notice that a similar view has also been taken by the Bombay High Court in the case of Sitaldas K. Motwani v. Director General of Income-tax (International Taxation): 187 Taxman 44 (Bom). Consequently, agreeing with the Karnataka High Court, we are of the view that the Board has the power under Section 119 (2) to condone the delay in the case of a return which is filed late and where a claim for carry forward of losses is made.
8. Coming back to the facts of the present case, we find that the impugned order under Section 119 passed by the Board is a non- speaking one. Normally, we would have remanded the matter to the Board to consider the application of the petitioner afresh. However, we find that in the present case, the delay is only of one day and the circumstances have been explained and have not been controverted by the respondents. The fact of the matter is that the petitioner did reach the Central Revenue Building before the closure of the counter on 01.11.2004. It is only because he was sent from one room to the other and had to wait in long queues that he could not present the return at the counter which was receiving the returns prior to 6.00 p.m. on that date. We feel that sufficient cause has been shown by the petitioner for the delay of one day in filing the return. If the delay is not condoned, it would cause genuine hardship to the petitioner. Thus, in the circumstances I.T.A. No. 509/Kol/2022 Assessment Year: 2019-2020 M/s. Jeevandarshi Marketing Pvt. Ltd.5
of this case, instead of remanding the matter back to the CBDT, we direct that the delay of one day in filing of the return be condoned."
26. We also noticed that the Hon'ble Madras High Court in the case of CBDT v. Regen Infrastructure & Services (P.) Ltd., [75 taxmann.com 135] condoned delay of one day in uploading the return of income. The facts in this case, the assessee had uploaded its return sometime immediately past midnight on 15.10.2010 i.e. last date of filing return due to floods. The CBDT rejected the application seeking condonation of delay on the ground that there were no floods and hence, the assessee could have easily filed its return in the normal period. The Hon'ble Single judge had come to the conclusion that the ends of justice would be served better by setting aside the order of the CBDT and directed the Assessing Officer to consider the return of income filed by the assessee on merits. On these facts the Hon'ble Division Bench of the Madras High Court on a writ appeal held as under:
"6. It is appropriate to notice that under Section 119(2)(b) of the Income Tax Act, the Central Board Direct Taxes has been empowered "to admit an application or claim for exemption, deduction, refund * any other relief under the Act, after the expiry of the period specified by or under the Act by making such an application or claim and deal with the same on merits in accordance with law." In other words, the statute has conferred discretion in the hands of the Board to admit of any claim which is made beyond the period specified for doing so and when once the discretion is conferred by a statute upon an authority, such a discretion is required to be exercised on sound lines. It is one of the important factors to be considered while dealing with an application seeking condonation of delay as to whether grave and irreparable injury or hardship will be caused to the person concerned and as to whether or not the interests of justice would be served better, in condoning the delay. In the instant case, there is no dispute or denial of the fact that the Return of Income filed by the Respondent/Assessee for the Assessment Year 2010-11, has been uploaded sometime past 00.00 hours on 15.10.2010. One can take judicial notice of the fact that uploading of Return requires not only an effort but also consumes sometime. If the Assessee has encountered certain hardship or difficulty in uploading his return, as alleged by him due to a technical snags in the website of the Income Tax Department due to the last hour rush of filing of Returns, the delay deserves to be condoned."
27. We observed that the Delhi Bench of the Tribunal in the case of ITO v. Mantangi Rubber Pvt. Ltd., in ITA.No. 4498/Del/2013 dated 29.05.2015 considered a situation where there was a delay of 46 minutes in uploading the e- return and the Tribunal condoned the delay observing as under: -
"2. Brief facts of the care are that as per AO, e-return of income, declaring Nil income, was filed with acknowledgement no. 982454810111009 on 1- 10-2009, after claiming deduction u/s 80IC of Rs. 2,34,41,162/-. The AO denied deduction u/s 80IC on the ground that assessee had not filed the I.T.A. No. 509/Kol/2022 Assessment Year: 2019-2020 M/s. Jeevandarshi Marketing Pvt. Ltd.6
return within specified time u/s 139(1), because as per records the return was filed on 1-10-2009 and not on 30- 9-2009. He did not accept the assessee's contention that the return was actually uploaded and filed on the site of the Income-tax department at 12.46AM on 1-10- 2009 and thus there was only a technical delay of 46 minutes in filing of return which, in any case, was filed before the commencement of the next working day.
3. Ld. CIT(A) directed the AO to verify the date when the return was uploaded and sent into transmission observing as under: "The AO is directed to verify the contention of the appellant with the information available with the Directorate of systems regarding this electronic trail of the e-return filed. In case it is found that the return was indeed unloaded with the electronic signature on 30-09-2009, the stipulated date of filing of the return, then it shall be held as per the principles of Law of Contract that the return was irrevocably set into transmission, the act as per law, on the part of the appellant being complete. In such a case the delay in the acknowledgement being sent, and it being dated 01-10-2009 shall not have any bearing on the case. In the event of being uploading and submission being completed by 30-09-2009 it shall be held that the return was filed on time and all the related benefits shall then be made available to the appellant. The AO is thus directed to obtain the electronic trail of filing of the return from DIT(Systems). If the return was duly uploaded and set into transmission by 30-09- 2009 then the AO is directed to give the benefits of Section 80IC. In case it is seen that the return was duly uploaded and set into transmission sonly by 01-10- 2009 then the benefit of section 80IC shall not be available as the mandatory requirement of section 80AC would not have been met."
4. Being aggrieved with the direction of ld. CIT(A), the department is in appeal before us and has taken following grounds of appeal:
"1. The order of the learned CIT(Appeals) is erroneous and contrary to facts & law.
2. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in holding that if the ITA No. 2147 & 2348/MUM/2018 (A.Y: 2014-15) Lodha Developers Limited {since merged M/s. Palava Dwellers Pvt. Ltd.,} uploading and submission of e-filed return by the assessee was completed by 30.09.2009 then the assessee will be get the benefit of deduction u/s 801e.
3. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) erred in deleting the addition the addition without giving AO opportunity for rebut as per rule 46A, as no remand report was called for in respect of verifying the electronic trial of filling the return from DIT (Systems).
I.T.A. No. 509/Kol/2022 Assessment Year: 2019-2020 M/s. Jeevandarshi Marketing Pvt. Ltd.7
4. That the order of the Ld. CIT(A) is erroneous and is not tenable on the facts and in law.
5. That the grounds of Appeal are without prejudice to each other.
6. The appellant craves leave to add, to alter, or amend on the ground of at the appeal raised above at the time of hearing.
5. The assessee has filed cross-objection, taking following grounds: (1) That the order dated 06-06-2013 passed u/s 250(6) of the Income-tax Act, 1961 by the Learned Commissioner of IncomeTax (Appeals) IX, New Delhi is against law and facts on the file in as much as she was not justified to set aside the assessment and restore the matter back to the file of Ld Assessing Officer.
(2) That the order dated 06-06-2013 passed u/s 250(6) of the Income-tax Act, 1961 by the Learned Commissioner of Income- Tax (Appeals) IX, New Delhi is against law and facts on the file in as much as she was not justified to hold that the benefit of Section 80-IC of the Income-tax Act, 1961 shall not be available as the requirements of Section 80-AC are mandatory whereas the provisions of Section 80-AC are not mandatory but only directory in nature.
6. We have considered the submissions of both the parties and have perused the record of the case. Admittedly, at best the delay is of 46 minutes in filing the e-return. On account of this delay, the acknowledgement bears the date 1-10-2009. There can be several reasons for this small delay including technical reasons. But considering the fact that the return was filed in the intervening night of 30-9-2009 and 1-10-2009, the assessee's claim, if otherwise admissible, cannot be denied on account of this technical delay. In our opinion, it would be travesty of justice if for a technical delay of 46 minutes in filing the return of income, a deduction of Rs. 2,34,41,162/- is denied to assessee.
7. Section 80AC provides that deduction u/s 80IC shall be allowed to assessee if the return is filed on or before the due date specified under sub- section (1) of section 139. However, section 139(4) carves out an exception to the time limit u/s 139(1) for filing the return of income. Therefore, time limit for filing the return of income is neither inflexible nor inelastic. Thus, the provisions of section 80AC are directory and even the Board may, under the provision of section 119, condone the delay in order to avoid undue hardship.
8. In the present case it cannot be said that the delay was, in any manner, mala fide. On the contrary, the assessee was vigilant enough to file the return at the midnight. We, therefore, condone the delay in filing the return.
I.T.A. No. 509/Kol/2022 Assessment Year: 2019-2020 M/s. Jeevandarshi Marketing Pvt. Ltd.
89. As far as ld. CIT(A)'s direction to the AO is concerned, we find that the assessee itself has clearly stated in its reply reproduced by AO in the assessment order, that the return was uploaded at 12.46 AM on 1-10-2009. Therefore, there was no necessity for restoring the matter to the file of AO for any verification.
10. In view of above discussion, the cross-objection filed by the assessee is allowed and, therefore, the department's appeal has become infructuous. However, since the AO has not examined the assessee's claim u/s 80IC in detail and has rejected the same only on the ground of delay in filing of the return, we restore the matter to the file of AO for examining the assessee's claim u/s 80IC."
28. In view of the above judicial pronouncements and also taking note of the fact that the delay is only of two minutes which was caused due to technical glitch and last hour of rush in the website, we direct the Assessing Officer to treat the original return filed by the assessee for the A.Y. 2014-15 as filed in time and consequently to consider the revised return of income filed by the assessee for the purpose of computing the income of the assessee."
5. Since the facts before us are materially same vis a vis the case as decided by the Co-ordinate Bench, we, therefore, respectfully following the ratio of law laid down by the Co-ordinate Bench in the above decision, set aside the order of the ld. CIT(A) and direct the Assessing Officer to allow the carry forward of loss as claimed by the assessee, by holding that the delay of 2 minutes 7 seconds in filing of the return of income by the assessee was purely on the ground of technical glitch/malfunctioning in the system/portal of the Income Tax Department for which the assessee cannot be penalized.
6. In the result, appeal of the assessee is allowed.
Order pronounced in the Court on 28th November, 2022 at Kolkata.
Sd/-
(RAJESH KUMAR) ACCOUNTANT MEMBER Kolkata, Dated 28/11/2022 *SC SrPs I.T.A. No. 509/Kol/2022 Assessment Year: 2019-2020 M/s. Jeevandarshi Marketing Pvt. Ltd.
9आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. संबंिधत आयकर आयु / Concerned Pr. CIT
4. आयकर आयु (अपील)/ The CIT(A)-
5. िवभागीय ितिनिध,अिधकरण अपीलीय आयकर , कोलकाता/DR,ITAT, Kolkata,
6. गाड फाईल /Guard file.
आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata