2021 (7) TMI 1372 - SCH - Income Tax

Belated return of income accepted by condoning the delay - Condonation of delay in filing return - reasonable cause of delay - genuine hardship - HELD THAT - Having considered the facts and circumstances due to which the respondent-assessee, at the relevant time, could not file the return of income within the time prescribed, the order passed by the High Court directing the Revenue to condone the delay and accept the belated return of income and to consider the return of income in accordance with law on merits does not warrant any interference. The facts which led to the assessee in late filing of the return of income are glaring. Therefore, no interference of this Court is called for, in exercise of powers under Article 136 of the Constitution of India. However, at the same time, the question of law, whether the CBDT, while exercising the powers under Section 119(2)(b) of the Income Tax Act, can direct to condone the delay in filing the return of income is kept open to be considered in an appropriate case. It is further observed that the impugned judgment and order passed by the High Court be not treated as a precedent. SLP dismissed.

Summary

Issues involved:
1. Jurisdiction of the Central Board of Direct Taxes (CBDT) to condone the delay in filing a belated return of income under Section 119(2)(b) of the Income Tax Act, 1961.

Detailed Analysis:
The Supreme Court of India addressed the issue arising from an impugned judgment by the High Court of Karnataka regarding the acceptance of a belated return of income by condoning the delay. The Revenue challenged the High Court's decision, arguing that the CBDT lacked the jurisdiction to direct the condonation of such delays under Section 119(2)(b) of the Income Tax Act, 1961. The Revenue contended that the High Court erred in its direction to accept the belated return of income. The Court noted the arguments put forth by the Additional Solicitor General of India representing the Revenue.

Upon careful consideration of the facts and circumstances leading to the delay in filing the return of income by the respondent-assessee, the Supreme Court upheld the High Court's decision. The Court found that the reasons for the delay in filing the return were evident, and thus, interference by the Supreme Court was deemed unnecessary under Article 136 of the Constitution of India. The Court emphasized that the High Court's order to condone the delay and accept the belated return of income should stand, allowing the Revenue to consider the return on its merits. However, the Court left open the question of law regarding whether the CBDT has the authority to direct the condonation of delay under Section 119(2)(b) of the Income Tax Act for future consideration in a suitable case. Additionally, the Court clarified that the High Court's judgment should not be treated as a precedent.

In conclusion, the Supreme Court dismissed the special leave petition filed by the Revenue, along with any pending applications. The Court's decision maintained the acceptance of the belated return of income by condoning the delay, while reserving the question of the CBDT's jurisdiction for future deliberation in an appropriate case.