2017 (5) TMI 124 - HC - Income Tax

Condonation of delay in filing return - application for condonation has been turned down not on the merits but on the interpretation of proviso to Section 119(1) (a) i.e. that the relief sought would amount to interference with the powers and jurisdiction of a quasijudicial authority - Held that - the petitioner s request was limited, and if one may say so, uncontroversial and that the CBDT was merely asked to condone the delay in the filing of the revised return having regard to her mental health - the CBDT, in the opinion of the Court, misunderstood the scope of the proviso (a) to Section 119(1) of the Act when it said that granting the relief would amount to directing the AO to a particular course of action. The discretion, if exercised, would merely result in enabling the assessee to file a revised return, no more, no less. The CBDT shall decide the matter afresh i.e. as to whether to condone the delay in the filing of the revised return having regard to the circumstances - petition allowed by way of remand.

Summary

Issues:
1. Interpretation of proviso to Section 119(1)(a) of the Income Tax Act, 1961 regarding condonation of delay in filing a revised return.

Analysis:
The petitioner approached the High Court seeking relief after an ex parte assessment led to additions due to not filing returns properly, citing mental health issues. The Court directed the matter to be reconsidered by the Assessing Officer (AO). Subsequently, the petitioner sought condonation of delay in filing a revised return to rectify irregularities. The Central Board of Direct Taxes (CBDT) rejected the request, citing interference with the AO's quasi-judicial powers. The CBDT's decision was based on Section 119(1)(a) which prohibits directing a specific assessment or case disposition. The High Court found the CBDT misunderstood the proviso, as the relief sought was limited to condoning the delay, not directing assessment. The Court held that denying the power to admit the revised return through condonation was a legal error.

The High Court set aside the CBDT's order and directed a fresh consideration of condonation of delay in filing the revised return based on circumstances. If relief is granted, the AO will then assess the revised return on its merits. The Court allowed the writ petition and disposed of all pending applications, instructing parties to receive a copy of the order directly from the Court Master.