ITR Filed 2 Seconds Late due to Glitches in Income Tax portal: ITAT directs to Treat Filed in Time [Read Order]

The Pune Bench of the Income Tax Appellate Tribunal ( ITAT ) has upheld the validity of an income tax return filed 2 seconds late due to technical glitches and rush on the Income Tax e-filingportal and dismissed the Revenue’s appeal.

Kumar Builders Project Pune Pvt. Ltd. (assessee), a private limited company engaged in real estate development, faced scrutiny for Assessment Year (AY) 2019-20. The assessee filed original return of income, declaring a loss of Rs. 1,22,14,57,394.

The assessee claimed a TDS credit of Rs. 4,02,541, thereby seeking a refund of Rs. 4,02,541. The assessee filed a revised return on 06.03.2020, claiming a refund of Rs. 2,541 and a carry forward loss of Rs. 3,95,51,713.

The Central Processing Centre (CPC) disallowed the carry forward of the business loss, citing that the original return was filed belatedly, as the acknowledgment was generated at 00:00:02 hours on 01.11.2019, 2 seconds past the deadline of 31.10.2019.

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Aggrieved by the CPC’s decision, the assessee appealed to the Additional/Joint Commissioner of Income Tax (Appeals) [Addl/JCIT(A)]. The Addl/JCIT(A) held that the return was filed in time, allowing the carry forward of the loss.

Aggrieved by the CPC’s decision, the Revenue filed an appeal before the ITAT. The counsel for the Revenue argued that the original return was filed after the statutory period and delayed by 2 seconds and the CPC decision was fully justified.

The counsel for the assessee relied on precedents such as the Ahmedabad Bench’s decision in The Khedbrahma Taluka Primary Teachers Co-op. Credit Society Ltd. (delay of 4 minutes 42 seconds condoned) and the Mumbai Bench’s ruling in DCIT vs. M/s. Palava Dwellers Pvt. Ltd. (2-minute delay condoned).

The Counsel argued that a 2-second delay due to technical issues should not penalize the assessee.

The two-member bench, comprising R.K. Panda (Vice President) and Astha Chandra (Judicial Member), observed that the return was uploaded before midnight on 31.10.2019, but the acknowledgment was generated 2 seconds later due to technical glitches and portal rush.

The Tribunal held that the 2-second delay was beyond the assessee’s control. The Tribunal affirmed the Addl/JCIT(A)’s order and held that there was no error in the order of Addl/JCIT(A).

The Tribunal directed the Assessing Officer to treat the return as filed in time under Section 139(1), allowing the carry forward of the business loss. The appeal of the Revenue was dismissed.

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