Facts of the Case

The assessee filed an appeal against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, for Assessment Year 2017-18. However, the appeal suffered from a procedural defect, namely payment of a deficient appeal fee — ₹500 instead of the prescribed ₹10,000.

Defect notices were issued by the Tribunal to rectify the deficiency, but the defect was not removed within the stipulated time, leading to dismissal of the appeal on technical grounds. The assessee subsequently sought condonation of delay and restoration of the appeal, explaining that the defect arose due to a bona fide mistake and not due to deliberate negligence.

Issues Involved

  1. Whether delay caused by non-payment of the correct appeal fee can be condoned when the defect is bona fide.
  2. Whether an appeal should be dismissed on technical grounds despite the existence of a substantial issue on merits.
  3. Whether principles of natural justice require restoration of the appeal for adjudication on merits.

Petitioner’s Arguments (Assessee)

  • The deficiency in appeal fee occurred due to an inadvertent and bona fide error.
  • There was no intention to delay proceedings or disregard statutory requirements.
  • The assessee expressed willingness to rectify the defect and pay the correct fee.
  • Substantial justice should prevail over technical lapses, especially when rights of appeal are involved.

 

Respondent’s Arguments (Revenue)

  • The appeal was defective due to non-compliance with statutory requirements regarding appeal fee.
  • Procedural rules must be adhered to for maintaining discipline in appellate proceedings.
  • Failure to rectify the defect within the prescribed time justified dismissal of the appeal.

 

  • The defect related to deficient appeal fee was procedural in nature.
  • The explanation offered by the assessee indicated a bona fide mistake.
  • Dismissing the appeal on technical grounds would result in denial of substantive justice.
  • Courts and tribunals should adopt a liberal approach where delay or defect is neither intentional nor mala fide.

Accordingly, the Tribunal:

  • Condoned the delay,
  • Allowed rectification of the defect, and
  • Restored the appeal for adjudication on merits.

The decision emphasized that procedural requirements should facilitate justice, not obstruct it.

Important Clarification

The Tribunal clarified that:

  • Technical defects such as short payment of appeal fee should not automatically result in dismissal when the appellant demonstrates bona fide conduct.
  • The right of appeal is a substantive statutory right and should not be defeated by curable procedural lapses.
  • Authorities must balance procedural compliance with principles of natural justice.

 

Link to download the order -https://itat.gov.in/public/files/upload/1677223105-NEWW%20ita%20NO.%2035%20aLLD%202022.pdf  

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.