2011 (11) TMI 349 - HC - Income Tax

Application for condonation of delay in filing of return - Relief u/s 119(2)(b) return of rental income & TDS thereon filed late in year 2005 for A.Y.1998-99 to 2001-02 petitioner seeking relief u/s 119(2)(b) for refund of TDS - petitioners are co-owners of building let out to State Bank of Travancore grounds raised are with respect to the delay in issuance of TDS certificates - Held that - Ground stated of death of the co-owner, who had been collecting the rent, in 2004 ailing for two years prior to his death, cannot be reason since the previous year of the last assessment year involved was 2000-01. Further, issuance of one consolidated TDS certificate by bank cannot be projected as a reason since separate share of each co-owners is a matter of agreement between the parties. Moreover, with respect to the A.Y. 1998-99 the same is beyond the scope of power conferred by Section 119(2)(b) since the same is beyond six years. Even for the later years, that is, 1999-2000 to 2001-02, hardship projected by the petitioners for condonation of delay is not genuine and cannot be countenanced. - writ petitions are dismissed.

Summary

Issues:
1. Delay in filing income tax returns for the assessment years 1998-99 to 2001-02.
2. Rejection of plea for condonation of delay under Section 190(2)(b) of the Income Tax Act.
3. Dispute regarding the issuance of Tax Deducted at Source (TDS) certificates.
4. Interpretation of Section 119(2)(b) of the Income Tax Act.
5. Examination of genuine hardship in seeking relief under Section 119(2)(b).

Analysis:
1. The petitioners, co-owners of a building leased to the State Bank of Travancore, failed to file income tax returns for the years 1998-99 to 2001-02 on time. They later applied for condonation of delay under Section 190(2)(b) of the Income Tax Act, citing reasons like the illness and subsequent death of the co-owner managing the affairs. The Commissioner rejected the plea initially, but upon insistence for a personal hearing, passed another order reaffirming the rejection. The petitioners argued that the delay was due to not receiving TDS certificates on time from the bank.

2. The Court examined the provisions of Section 119(2)(b) which allows for the admission of applications for relief after the specified period to avoid genuine hardship. The petitioners relied on a previous judgment interpreting this section to support their case for condonation of delay. However, the Court emphasized the need to assess the genuineness of the hardship claimed by the petitioners in the present case.

3. The reasons presented by the petitioners for the delay in filing returns mainly revolved around the non-receipt of TDS certificates in a timely manner. They cited the death of a co-owner responsible for dealing with the bank for TDS certificates, the issuance of a consolidated TDS certificate instead of individual ones, and delays in obtaining the breakdown of each co-owner's share. The Court found these reasons insufficient to justify the delay, especially considering that the delay for the assessment year 1998-99 was beyond the permissible period.

4. Ultimately, the Court dismissed the writ petitions, concluding that the hardship projected by the petitioners for condonation of delay was not genuine and could not be accepted. No costs were awarded in the judgment.