Facts of the Case

The petitioner filed an appeal in Form 35 on 13 July 2016 concerning Assessment Year 2013–14. However, although the appeal existed in physical records, it was not registered or uploaded electronically by the department.

Due to the absence of an electronic record, the petitioner was denied the benefit under the Direct Tax Vivad Se Vishwas (DTVSV) Scheme.

Issues Involved

  1. Whether an assessee can be denied statutory benefits due to administrative lapses of the tax department.
  2. Whether an appeal can be considered “pending” under the DTVSV Act despite non-uploading by the department.
  3. Whether failure of electronic registration amounts to default on the part of the assessee. 

Petitioner’s Arguments

  • The petitioner had duly filed the appeal electronically in Form 35 within time.
  • Non-registration or non-uploading of the appeal was solely attributable to the departmental failure.
  • Denial of DTVSV benefit on such technical grounds is arbitrary and violates principles of fairness.

Respondent’s Arguments

  • The department acknowledged that:
    • The appeal existed in physical records,
    • However, it was not available in electronic records due to non-uploading.
  • The issue arose from system/administrative discrepancies.

Court’s Findings / Judgment

  • The Court held that no fault can be attributed to the assessee when the appeal was duly filed.
  • It reiterated the settled legal principle that:

An assessee cannot be penalised for defaults committed by the Revenue authorities.

  • The Court relied on the precedent:
    • Shyamsunder Sethi vs Pr. Commissioner of Income Tax-10 & Ors., where it was held that an appeal is considered “pending” from the date of filing till disposal.
  • The impugned order was set aside.

Court Order

  • The Principal Commissioner of Income Tax was directed to:
    • Upload and register the appeal electronically, and
    • Grant the petitioner benefit under the DTVSV Scheme within four weeks.
  • The writ petition was disposed of with directions.

Important Clarification

  • Filing of appeal = sufficient compliance by assessee.
  • Technical/administrative lapses of the department cannot defeat substantive rights.
  • An appeal remains “pending” even if not electronically reflected, provided it has been filed.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:3468-DB/MMH02092022CW49202021_183124.pdf

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