2018 (3) TMI 592 - HC - Income Tax

Condonation of delay in filing the IT return - powers u/s 119 - Held that - It is the case of the petitioner that it is not avoiding any scrutiny; the Authorities can verify the genuineness of the petitioner by taking up the matter for scrutiny. It is also not in dispute that the petitioner was regularly filing the return of income and a genuine tax payee. It is primfacie apparent that only for the assessment year 2006- 07 owing to the alleged crashing of the system no income of return was filed within the prescribed time the petitioner is not avoiding any scrutiny. The circumstance that financial report and audit reports were signed by the Managing Director on 04.09.2006 would not be a ground to reject the condonation of delay in filing the report. It cannot be said that the petitioner has obtained any undue advantage of the delay in filing the income tax returns. Rendering substantial justice shall be paramount consideration of the Courts as well as the Authorities rather than deciding on hyper-technicalities. It is obvious that there is some lapse on the part of the petitioner that itself would not be a factor to turn out the plea for filing of the return when the explanation offered was acceptable and genuine hardship is established. It was with a fond hope of getting justice at the hands of the Chief Commissioner of Income Tax petition was filed on 11.06.2010. However no decision was taken for nearly 6 years. Finally on 11.03.2016 the said petition has been dismissed which has to be viewed seriously while rendering substantial justice to the parties. - Matter restored before CCIT.

Summary

Issues involved:
Challenge to order under Section 119(2)(b) of the Income Tax Act for condonation of delay in filing returns for assessment year 2006-07.

Analysis:
1. The petitioner, a company, faced a sudden computer system crash affecting the filing of returns for the assessment year 2006-07. Despite genuine hardship and substantial data compilation efforts, the request for condonation of delay and refund claim was initially supported by the Assessing Officer but later rejected by the Chief Commissioner of Income Tax based on a changed stance, leading to undue hardship and misery for the petitioner.

2. The Revenue, represented by counsel, argued that the financial reports were ready in time, and the petitioner could have filed the income report within the statutory due date, indicating a lack of justification for the delay. The fresh report submitted by the Assessment Officer was considered by the Chief Commissioner of Income Tax while dismissing the application for condonation of delay.

3. The court examined the factual matrix, noting the petitioner's efforts to file for condonation of delay under Section 119(2)(b) of the Act and the subsequent disposal of the application after a significant delay. Section 119(2)(b) empowers the CBDT to consider delayed claims for refunds, with instructions emphasizing scrutiny of such cases and the interpretation of "genuine hardship" by the courts to be liberal.

4. Emphasizing the importance of substantial justice over technicalities, the court found that the petitioner's explanation for the delay was acceptable, and the genuine hardship was established. The delay in decision-making by the Chief Commissioner of Income Tax for nearly 6 years was viewed seriously, leading to the allowance of the writ petition and setting aside the dismissal order, remanding the matter for re-consideration in an expedited manner.

This detailed analysis highlights the key legal arguments, interpretations of relevant provisions, and the court's emphasis on substantial justice in the context of the challenge to the order under the Income Tax Act for condonation of delay in filing returns.