2019 (4) TMI 107 - HC - Income Tax

Condonation of delay in filing the income tax return - Tribunal was of the opinion that since the return of income was not filed by the assessee within time, the claim for carry forward of losses was not sustainable - why the application for condonation of delay could not be filed for as long as six years? - HELD THAT - The petitioner first contested the claim before the Revenue Authorities. The Tribunal by its judgment dated 21.3.2014 held that such loss was not allowable in absence of filing of the return within time and in absence of condonation thereof. Even if the petitioner was bonafide pursuing the claim in the assessment proceedings, nothing prevented the petitioner from filing appropriate proceedings before the CBDT for condonation of delay once the Tribunal expressed its opinion. The petitioner has accepted such opinion and not preferred the appeal in the High Court. As per the impugned order, the first evidence of such a petition being filed before the CBDT was on 23.10.2015. Though the petitioner contended that previously one such petition was filed on 6.10.2014, the CBDT found no evidence of such proceedings being filed. The petitioner claims to have filed such an application before the AO. Even there, the CBDT found that the evidence of any such petition being presented, inadequate. The petitioner produced the receipt of private courier of having dispatched the same. The CBDT, however, in the impugned order records that even the Authority to whom the same has been forwarded is not mentioned. Under these circumstances, the petitioner has not been prompt in pursuing the remedies on the ground of limitation and latches. We are doubtful if this period of six years for approaching CBDT is extendable in the first place. No case of interference is made out.

Summary

Issues:
Challenge to CBDT order rejecting condonation of delay in filing income tax return for assessment year 2008-09.

Analysis:
The petitioner, a Co-operative Bank, filed the income tax return for assessment year 2008-09 on 18.12.2008, claiming a carry forward of losses amounting to ?24.65 Lakhs. However, the Assessing Officer rejected the claim as the return was filed after the due date of 31.10.2008. The CIT(A) allowed the appeal, but the Tribunal overturned this decision, stating that the proper course for the petitioner would have been to seek condonation of delay from the CBDT.

The petitioner approached the CBDT seeking condonation of delay in filing the return under Section 119(2) of the Income Tax Act. There was a dispute regarding the date of filing the application, with the petitioner claiming it was filed on 6.10.2014, while the CBDT entertained an application received on 23.10.2015. The CBDT dismissed the application on 13.9.2017, citing unsatisfactory explanation for the delay and filing beyond the permissible limit of six years as per a CBDT Circular.

The petitioner argued that the CBDT erred in rejecting the application, explaining that delays were due to the audit process that started in July 2010 and concluded with the filing of the return on 18.12.2008. The petitioner cited legal precedents to support their case. The Department opposed the petition, asserting that the CBDT had valid reasons for rejecting the application due to unexplained delays.

After hearing both parties and reviewing the records, the Court noted that apart from the delay in filing the return, the petitioner failed to justify why the application for condonation of delay was not filed within six years. The Tribunal's judgment in 2014 emphasized the necessity of filing such an application once the opinion was expressed. The Court found discrepancies in the petitioner's claims of filing applications and evidence presented to the CBDT, leading to doubts about the diligence in pursuing remedies within the prescribed time limit.

Given the need for a proper assessment to recognize genuine losses for carry forward, reopening the assessment for the distant past period was deemed impractical. The Court concluded that no interference was warranted, and the petition was disposed of accordingly.