CIT(A)’s dismissal of appeal on delay grounds is unsustainable if filed within the extended time limit

By | June 3, 2025
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CIT(A)’s dismissal of appeal on delay grounds is unsustainable if filed within the extended time limit specified by CBDT Circular No. 20/2016.

Issue:

Whether an appeal filed before the Commissioner (Appeals) (CIT(A)) can be dismissed on the ground of delay, when the appeal was filed manually within the standard limitation period and subsequently e-filed within an extended time limit specifically provided by a CBDT Circular for electronic filing.

Facts:

  • For Assessment Year 2013-14, the assessee received an assessment order dated March 18, 2016, passed under Section 143(3) of the Income-tax Act, 1961.
  • The assessee filed an appeal against this order manually on April 22, 2016.
  • Subsequently, the assessee also filed the appeal electronically on June 15, 2016.
  • At the time of e-filing, CBDT Circular No. 20/2016, dated May 26, 2016, was in effect. This circular (presumably) provided for an extended time limit for e-filing of appeals.
  • The Commissioner (Appeals) (CIT(A)) dismissed the appeal on the ground of delay. The CIT(A) considered the e-filed appeal (June 15, 2016) as the relevant date, calculated it as delayed by 88 days from the original due date, and further held that this delay was not explained in Form No. 35 (the appeal form).

Decision:

The court held that since the appeal was filed within the extended time limit as per Circular No. 20/2016, the dismissal on the ground of delay was unsustainable. The matter was remanded.

Key Takeaways:

  • Manual vs. Electronic Filing & Circulars: The case highlights a period when the Income Tax Department was transitioning to mandatory e-filing, and circulars were issued to clarify procedures and extend deadlines for electronic submissions.
  • Binding Nature of CBDT Circulars: Circulars issued by the Central Board of Direct Taxes (CBDT) are binding on the tax authorities, including the Assessing Officer and the Commissioner (Appeals). If a circular provides an extended time limit for compliance (like e-filing an appeal), the authorities cannot disregard it.
  • Effective Date of Appeal: The CIT(A) erred by disregarding the manual filing (which was timely) or by not giving effect to the extended deadline for e-filing as per the circular. If the e-filing was done within the period allowed by the circular, it should be considered timely, irrespective of the original statutory due date for manual filing.
  • “Apparent from Records” for Rectification/Appeal: The fact that the circular (No. 20/2016) was in effect and specified an extended time limit would be “apparent from records” or the general knowledge of the tax department. Dismissing an appeal despite compliance with such a circular is an error that warrants intervention.
  • “Condonation of Delay” vs. “Compliance with Extended Deadline”: This is not a case of condonation of delay in the traditional sense, but a matter of recognizing that the appeal was filed within a validly extended statutory/circular-driven deadline.
  • Remand for Merits: The setting aside of the CIT(A)’s order and remanding the matter means the CIT(A) must now hear the appeal on its substantive merits, rather than dismissing it on a procedural technicality.
  • Favorable to Assessee: The assessee gets an opportunity to have their appeal heard on the merits.
HIGH COURT OF GUJARAT
Shrikunj Corporation
v.
Commissioner of Income-tax
BHARGAV D. KARIA and D.N. Ray, JJ.
R/SPECIAL CIVIL APPLICATION NO. 6173 of 2022
APRIL  16, 2025
Avinash Poddar, Adv. for the Petitioner. Karan G Sanghani, Adv. for the Respondent.
ORDER
Bhargav D. Karia. J. – Heard learned advocate Mr. Avinash Poddar for the petitioner and learned Senior Standing Counsel Mr. Karan G. Sanghani for the respondents.
2. By this petition under Article 227 of the Constitution of India, the petitioner has prayed for quashing and setting aside the order dated 18.02.2022 passed by respondent no.2 CIT(Appeals).
3. Brief facts of the case are that the petitioner is a partnership and is running the business in the name and style of Shrikunj Corporation at Surat, Gujarat.
4. On 28.03.2016, the petitioner received an order dated 18.03.2016 passed under section 143(3) of the Income Tax Act, 1961 (For short “the Act”).
5. Being aggrieved by the said order, the petitioner had filed an appeal on 22.04.2016 in Form No.35 manually before respondent no.2. It is the case of the petitioner that since Rule 45 of the Income Tax Rules, 1962 (For short “the Rules”) mandates the e-filing of the appeals with effect from 01.03.2016, the petitioner had also filed appeal in Form No.35 electronically on 15.06.2016.
6. Respondent no.2 however issued notice dated 26.10.2017 wherein the petitioner was asked to appear for personal hearing on 10.11.2017 at 3:23 PM and accordingly, the petitioner appeared before the respondent on the said date.
7. Respondent no.2 again issued notice on 04.12.2017 wherein the petitioner was asked to remain present for personal hearing on 21.12.2017 at 11:06 AM and accordingly the petitioner remained present before the respondent no.2 on the said date.
8. Thereafter, respondent no.2 again issued notice dated 28.01.2020 whereby the petitioner was asked to appear for personal hearing on 11.02.2020 at 11:55 AM and accordingly, the petitioner appeared before the respondent no.2 on the said date.
9. It is the case of the petitioner that on 25.02.2020, the petitioner had submitted a letter dated 20.02.2020 before respondent no.2 whereby the petitioner filed a detailed reply.
10. Thereafter the appeal before the respondent no.2 was transferred to National E-Faceless Assessment.
11. Respondent no.1 thereafter issued notice dated 07.12.2021 under section 250 of the Act wherein the petitioner was directed to submit ground-wise written submissions along with documentary evidence on or before 15.12.2021.
12. Pursuant to such notice, the petitioner made a detailed written submission on 10.12.2021 wherein the petitioner also requested to grant personal hearing on 15.12.2021 and accordingly, the petitioner appeared before respondent no.1 and made detailed submissions.
13. However, respondent no.1 passed the impugned order dated 18.02.2022 under section 250 of the Act dismissing the appeal filed by the petitioner on the ground of inordinate delay in filing the appeal.
14. Learned advocate Mr. Avinash Poddar for the petitioner submitted that the petitioner has already filed the appeal on 15.06.2016 within the extended time as per Circular No.20/2016 dated 26.05.2016 and therefore, the appeal ought to have been decided on merits by CIT(Appeals).
15. Learned Senior Standing Counsel Mr. Karan Sanghani referring to the affidavit in reply filed on behalf of respondent no.4 in compliance of the directions issued by this Court vide order dated 04.03.2024 referred to the following averments in the affidavit in reply which reads as under:
“5. I say that in case of the Petitioner, Assessment Order u/s 143(3) of the Act for A.Y. 2013-14 was passed on 18.03.2016 and the demand notice was duly served on 28.03.2016. Therefore, as per provisions of Section 249 (2) (b) of the Act, the Petitioner was required to file appeal within thirty days from 28.03.2016, i.e. by 27.04.2016. The Petitioner e-filed appeal in Form No. 35 on 15.06.2016, thus, there was a delay of 88 days in filing of the appeal. In Column No. 14 of Form No. 35, the Petitioner mentioned that there was no delay in filing of the appeal. On verification of the facts recorded in Form No. 35, grounds of the appeal, statement of facts, and the written submissions made by the Petitioner, it was found that no reasons for delay in filing of the appeal were given by the Petitioner. Thus, it was concluded that factually incorrect statement was made by the Petitioner in Column 14 and 15 of Form No. 35. This misunderstanding could have been avoided, if the Petitioner would have correctly mentioned the delay on the day of filing Form No. 35 in Column 14 and in column No. 15, the reason stating that it has been filed physically / manually. So also, the fact that manual / physical appeal has been filed has come to light only when present proceedings were filed before this
Hon’ble Court. With due respect, the same has led to a belief of the undersigned that statement made in Form No. 35 is incorrect and the discretion to condone the delay was not exercised. Further, Circular No. 20 of 2016 was applied and the case of the Petitioner was not found covered under any of the two categories of taxpayers, i.e. (i) taxpayers who could not successfully e-file appeal,and (ii) taxpayers who had filed paper appeal, for whom the time limit to e-file appeal was extended upto 15.06.2016. Therefore, the appeal was dismissed. Provisions of Clause (3) of Section 249 of the Act were also considered. However, in Column No. 15 of Form No. 35 nothing was mentioned by the Petitioner. Therefore, in absence of any sufficient cause for delay in filing of the appeal, the appeal was dismissed.
6. I say that, the Petitioner for the first time before the Hon’ble Court has disclosed that a manual appeal for A.Y. 2013-14 was filed on 22.04.2016. I say that, had this fact brought on record during the appellate proceeding, the appeal could have been admitted as filed within the time limit extended by CBDT’s Circular No. 20 of 2016 and decided on merits.
7. I say that the provisions of Clause (2) of Section 249 of the Act, which provides for filing of the appeal before the CIT(A) within
30 days of service of notice of demand related to the Assessment, are mandatory. Further, as per Clause (3) of Section 249 of the Act, the CIT(A) may admit the appeal after the expiration of time period if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the period. The Act does not provide for any notice to be issued to assessees to explain the delay in filing of the appeal. However, to protect the interest of the taxpayers and to avoid genuine hardship caused to the taxpayers in delay in filing of the appeal before the CIT(A), sufficient safeguard and mechanism has been provided in Column No. 14 and 15 of Form No. 35 itself. Thus, on the basis of the facts available on record, it showed that the Petitioner e-filed appeal after delay of 88 days and also no reasons for such delay was mentioned in Form No. 35. Therefore, as per Clauses (2) and (3) of Section 249 of the Act, appeal was not liable to be admitted.
8. I humbly submit that this Hon’ble Court may be pleased to accept the above explanation and request not impose cost in the present case. principles of natural justice have been embedded in Form No. 35 itself by providing the Petitioner to mention whether there was a delay in filing of the appeal (Column No. 14) and providing opportunity to explain the reasons for such delay in filing of the Appeal (Column No. 15). However, if this Hon’ble Court is of the view that there has been a default in adhering to principles of natural justice as required, I tender an unconditional apology for such action and such action is deeply regretted. It is thus prayed before this Hon’ble Court that a lenient view may be taken and accordingly appropriate orders be passed.”
16. It was submitted that in view of above explanation tendered by the CIT(Appeals), the matter may be remanded back to the CIT(Appeals) to decide it on merits.
17. Considering the above submissions and the undisputed fact that the petitioner had filed the appeal within the extended time on 15.06.2016 as per Circular No.20/2016 dated 26.05.2016, the appeal could not have been dismissed on the ground of delay.
18. In view of above facts, the impugned order dated 18.02.2022 passed by CIT(Appeals) is hereby quashed and set aside. The matter is remanded to CIT(Appeals) to decide the same on merits in accordance with law after giving an opportunity of hearing to the petitioner.
19. The petition is accordingly disposed of. Notice is discharged.