When Substantial Justice and technical considerations are pitted against each other, Cause of Substantial Justice shall be preferred: ITAT [Read Order]

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) held that when substantial justice and technical considerations are pitted against each other then the cause of substantial justice shall be preferred.

The assessee is a Trust and is running an educational Institute. An order has been passed under Section 200A of the Income Tax Act, 1961, while processing the Tax Deducted at Source (TDS) returns, by levying fees under Section 234E of the Income Tax Act and raising a demand. The assessee was subsequently informed regarding the decision of the Karnataka High Court holding that the orders passed up to 01/06/2015, i.e. the date of the amendment to section 200A, for the inclusion of clause "c", the adjustments were without authority.

The Authorized Representative submitted that the assessee on a bonafide belief that the Assessing Officer would make necessary corrections and reduce the demands raised did not prefer an appeal and on account of the disruption of normal business during the pandemic, the appellate order served online, was not brought to the attention of the management, considering the fact that the offices of the assessee were closed for a long time and the staff were also working from home. In view of this, the management of the assessee was not aware of the passing of the above appellate order.

The Departmental Representative though objected to the condonation of delay vehemently could not bring out anything on record to establish any malafide on behalf of the assessee in causing such delay to file the present appeals before this Tribunal.

The Two-member bench comprising of Beena Pillai (Judicial member) and Laxmi Prasad Sahu (Accountant member) held that when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of nondeliberate delay.

If the application of the assessee for condoning the delay was rejected, it would amount to legalizing injustice on technical grounds, when the Tribunal was capable of removing injustice and doing justice. Therefore, by preferring substantial justice, the delay of 438 days was condoned. And the appeal of the assessee was also allowed.

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