2018 (4) TMI 1533 - HC - Income Tax

Refund of TDS - Condonation of delay in filing the returns u/s 119 - non-resident not having taxable income - Held 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. Sufficient cause shown by the petitioner for condoning the delay is acceptable and the same cannot be rejected out-rightly on technicalities. Considering all the delay of 1232 days in filing the returns for the relevant assessment years in question is condoned subject to denial of interest for the delayed period if found to be entitled for refund. Respondent No.3 is permitted to scrutinize the returns in accordance with law subject to the condition that petitioner gives an undertaking before this Court that she will not raise objections on the aspect of limitation in the event any demand has to be made by the department rather than making refund, as claimed, if found so, on concluding the assessments.

Summary

Issues:
Challenge to order under Section 119(2)(b) of the Income Tax Act, 1961 for condonation of delay in filing returns.

Analysis:
The petitioner, a non-resident, filed a petition for condonation of delay under Section 119(2)(b) of the Act due to financial crisis and injuries sustained in an accident. The Chief Commissioner rejected the application citing that the medical certificate did not support the delay explanation. The petitioner sought condonation to submit returns for three assessment years and claim refunds. The petitioner argued genuine hardship, emphasizing entitlement to refunds. The Revenue contended that the delay was not serious and the medical certificate was insufficient. They proposed scrutinizing returns with a condition that no objections on limitation would be raised if tax liability arose.

The Court analyzed Section 119(2)(b) empowering CBDT to consider delayed claims for relief under the Act. Refund cases require scrutiny per instructions. The phrase "genuine hardship" was interpreted liberally by the Supreme Court and Bombay High Court. The Court noted the petitioner's non-avoidance of scrutiny, attributing the delay to recession and injuries. Emphasizing substantial justice over technicalities, the Court accepted the genuine hardship and satisfactory cause for delay. The delay of 1232 days was condoned, subject to denying interest if entitled to refund. The Revenue was permitted to scrutinize returns with a condition that objections on limitation would not be raised if a tax demand arose, to be undertaken by the petitioner.

In conclusion, the Court upheld the petitioner's plea for condonation of delay in filing returns, emphasizing genuine hardship and substantial justice. The judgment allowed scrutiny of returns by the Revenue with a condition to waive objections on limitation if a tax demand emerged, ensuring fairness in the assessment process.