CBDT Circulars on Time Limit to File Appeals before CIT(A) and SC Order

CBDT vide Circular No. 8/2021 dated 30th April 2021 has restricted the time limit to file an appeal before the CIT(Appeals) which were required to be filed by 1st April 2021 to 31-05-2021. Prima facie, it resembles that there is an extension of the time limit to file such an appeal before CIT(A). As per the Circular, appeals which were required to be filed by 1st April, 2021 can now be filed by 31st May 2021 without any condonation.

But the time limit allowing filing of such time-barring appeal by 31st May 2021 is not an extension but a restriction of the time limit if we read the Order of the Hon’ble Supreme Court in this regard.

Readers are aware that in March 2020 when the government announced nationwide lockdown amid the COVID-19 pandemic, the Hon’ble Supreme Court on its own motion by an order dated 23.03.2020 extended the period of limitation prescribed under the general law or special laws whether compoundable or not with effect from 15.03.2020 till further orders.

Though there is not an end to the pandemic but due to improvement in the situation and return of normalcy, all the Courts and Tribunals have started to function either virtually or physically. Against this backdrop, the court has ended the extension of the limitation on 14th March 2021.

Thereafter, taking into cognizance the steep rise in the COVID cases in the entire country, the Hon’ble Court has once again restored the Order dated 23rd March 2020 and directed that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended till further orders.

Their Lordships have clarified that since this order has been passed under Article 142 read with Article 141 of the Constitution of India, hence, it shall be a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities.

The Net effect of the Order dated 27.4.21 is that there is an extension of the period of limitation from 15th March 2020 and shall be continued till further order.

When the Board issued the Circular 8/2021, a petition was filed before the Hon'ble Madhya Pradesh High Court by a Chartered Accountant named Palak Agarwal. In this case, the CBDT’s counsel stated that that the CBDT will duly consider the order of the Hon'ble Supreme Court and will take an appropriate decision for extending the period of limitation for filing the appeal. The matter was then further listed on 27.05.2021.

However, before that on 25th May 2021, CBDT issued a Circular No. 10/2021 to clarify that the benefit of extension of limitation for filing appeal before CIT(A) shall be available in consonance with the Hon’ble Supreme Court’s order. The Board further clarified that if different relaxations are available to the taxpayers for a particular compliance, the taxpayer is entitled to the relaxation which is more beneficial to him.

The relevant para 2 of the CBDT’s Circular dated 25.5.2021 reads as follows-

“2. The Central Board of Direct Taxes, clarifies that if different relaxations are available to the taxpayers for a particular compliance, the taxpayer is entitled to the relaxation which is more beneficial to him. Thus, for the purpose of counting the period(s) of limitation for filing of appeals before the CIT (Appeals) under the Act, the taxpayer is entitled to a relaxation which is more beneficial to him and hence the said limitation stands extended till further orders as ordered by the Hon’ble Supreme Court in Suo Motu Writ Petition (Civil) 3 of 2020 vide order dated 27th April 2021.”

With this clarification from the CBDT, appellants get time beyond May 31 for filing of appeal before CIT(A).

Download the following Orders:

Supreme Court Order dated 23.3.2020 in Suo Motu Writ Petition (Civil) No(s). 3/2020

Supreme Court Order dated 8.3.2021 in Suo Motu Writ Petition (Civil) No. 3 of 2020

Supreme Court Order dated 27.4.2021 in Miscellaneous Application No. 665/2021 in SMW(C) No. 3/2020

MP High Court Order dated 24.05.2021 in WP-9380-2021