Rejection of Income Tax Appeal citing Time Barred by One Day: ITAT sets aside NFAC’s Dismissal on Hyper-Technical Ground [Read Order]

The Panaji Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the dismissal of an income tax appeal by the National Faceless Appeal Centre (NFAC), which was incorrectly held to be time-barred by one day, despite having been filed within the statutory limit.

The appeal was filed by Ecoslag Cements and Additives Pvt. Ltd., Bengaluru, about a penalty order under Section 271C of the Income Tax Act, 1961, by the Joint Commissioner of Income Tax for the Assessment Year 2019–20.

The penalty order was received by the appellant, and under Section 249(2) of the Act, the time limit to file an appeal was 30 days from the last date for filing. The appellant filed the appeal, which was within the prescribed limit.

However, the NFAC dismissed the appeal in limine, stating it was time-barred by one day, as it mistakenly assumed the appeal deadline had expired. The dismissal was done without the appellant’s appeal with a condonation petition explaining the delay, even though no delay had occurred.

Understanding Common Mode of Tax Evasion with Practical Scenarios, Click Here

Aggrieved by the dismissal, the assessee approached the ITAT, alleging a violation of natural justice. The Assessee received the impugned penalty order on 13.09.2024 and was under obligation to file an appeal within 30 days,i.e., 14.10.2024, while the appeal was filed on 13.10.2024 - well within time.

The Tribunal noted that the NFAC failed to vouch or verify the actual filing date and dismissed the appeal on a hyper-technical ground, which was against the principles of justice.

The Tribunal comprising Pavan Kumar Gadale (Judicial Member) and G. D. Padmahshali (Accountant Member), ordered that an appellate forum created by statute is meant to address the dispute, not to accelerate it to a higher forum perfunctorily.

It also cited the Supreme Court’s judgment in Raheem Shah & Anr. vs. Govind Singh & Ors., 2023, reinforcing the view that quasi-judicial authorities must adopt a justice-oriented approach rather than adhere to iron-cast technicalities.

In its conclusion, the ITAT set aside the NFAC’s order and remitted the matter to the NFAC, directing it to admit the appeal as within time, and to adjudicate the case de novo on merits by Section 250(6) of the Act.

The appeal was allowed for statistical purposes, restoring the assessee’s right to be heard

The Assessee was represented by V Sriram Rao, while Nazeera Mohammad represented the department

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates