2016 (3) TMI 875 - HC - Income Tax

Entitlement to claim carry forward loss - delay in filing the return - Held that - Petitioner has satisfactorily explained the delay in filing the return on 16.10.2010 instead of 15.10.2010. Further, it is not the case of the respondents that the petitioner is not entitled to claim the carry forward loss under Section 139(3) of the Act. When the petitioner is entitled to claim the carry forward loss under Section 139(3) of the Income Tax Act, it cannot be stated that the delay in filing the return had occurred deliberately or on account of culpable negligence or on account of mala-fides. Further, the petitioner do not stand to benefit by resorting to delay as held by the High Court of Bombay. In fact, they runs a serious risk. Moreover, when the petitioner had satisfactorily explained the delay in filing the said return, the approach of the first respondent should be justice oriented so as to advance the cause of justice. In this case, when the petitioner as a litigant is entitled to claim carry forward loss, mere delay should not defeat the claim of the petitioner. The judgments relied on by the learned counsel for the petitioner squarely applies to the facts and circumstances of the present case. In these circumstances, it is of the view that the first respondent should have condoned the delay of one day in filing the return by the petitioner.

Summary

Issues:
- Delay in filing income tax return for assessment year 2010-11
- Condonation of delay in filing return under Section 139(1) of the Income Tax Act
- Entitlement to claim carry forward loss under Section 139(3) of the Act

Delay in Filing Income Tax Return:
The petitioner, a Private Limited Company, filed a Writ Petition seeking a writ of Certiorarified Mandamus to quash the decision of the first respondent regarding the acceptance of their income tax return for the assessment year 2010-11. The petitioner claimed that they faced technical issues while trying to upload their return on the last filing date, resulting in the return being filed after the due date. The third respondent completed the assessment under Section 143(3) of the Act, allowing the carry forward of losses, but the second respondent proposed to revise the assessment order under Section 263 due to the delayed filing.

Condonation of Delay:
The petitioner requested the first respondent to condone the delay of two hours in filing their return, as they believed it should have been considered filed on the due date. The first respondent rejected this request, stating there was no justifiable reason for the delay. The petitioner argued that they had a valid explanation for the delay and cited judgments from other High Courts where delays in filing returns were condoned based on sufficient reasons provided by the assessee.

Entitlement to Claim Carry Forward Loss:
The petitioner contended that they were entitled to claim the carry forward loss under Section 139(3) of the Act, despite the delay in filing the return. They argued that the delay was not deliberate or due to negligence, as supported by judgments from other High Courts. The petitioner emphasized that they should not be penalized for a minor delay, especially when they had valid reasons for missing the original filing deadline.

In the final judgment, the Court set aside the decision of the first respondent and directed them to accept the return filed by the petitioner for the assessment year 2010-11 under Section 139(1) of the Act. The Court highlighted that the delay in filing should have been condoned, considering the petitioner's entitlement to claim carry forward loss and the valid reasons provided for the delay. The judgment emphasized the importance of a justice-oriented approach in such cases to advance the cause of justice and ensure that legitimate claims are not defeated by minor delays.