2019 (6) TMI 1224 - HC - Income Tax

Condonation of delay u/s 119(2)(b) in filing return of income - ruling from the 'Advance Ruling Authority' ('ARA') was sought for taxability of income in India - ARA gave its ruling on 16.08.2016 - return for AY 2014-15 was filed on 06.03.2017 - HELD THAT - This Court on subject to costs of ₹ 10,000/- being paid and condition being complied, post 01.07.2019, the delay shall stand condoned and the respondent shall take up the returns filed by the writ petitioner on 06.03.2017 being returns for Assessment Year 2014- 15 and carry the same to its logical end in accordance with law as expeditiously as possible and in any event within four weeks from 01.07.2019 i.e, on or before 29.07.2019,

Summary

Issues Involved:
1. Condonation of delay in filing income tax returns for Assessment Year 2014-15.
2. Interpretation of Section 245R of the Income Tax Act.
3. Application of the Wavefield Inseis ASA case and the Sin Oceanic Shipping ASA case in the context of advance rulings.

Analysis:

Issue 1: Condonation of Delay in Filing Income Tax Returns
The petitioner, a foreign company, filed returns for Assessment Year 2014-15 after the due date, seeking a refund. The delay was attributed to awaiting a ruling from the Advance Ruling Authority (ARA), which was received after the due date. The petitioner's reasons for delay were accepted, but the ARA rejected the prayer for condonation of delay. The petitioner argued that the returns could not have been filed before the ARA's ruling, which was in line with the Sin Oceanic principle. The court, considering the circumstances, set aside the impugned order subject to the condition of payment of costs and directed the respondent to process the returns expeditiously.

Issue 2: Interpretation of Section 245R of the Income Tax Act
The petitioner's case hinged on the interpretation of Section 245R of the Income Tax Act, which governs advance rulings. The court considered the chronological sequence of events, emphasizing that the ARA's ruling was received after the due date for filing returns. The petitioner's compliance with the law, coupled with the acceptance of reasons for delay, led the court to order the condonation of delay and processing of returns.

Issue 3: Application of Case Law
The court referenced the Wavefield Inseis ASA case and the Sin Oceanic Shipping ASA case to support its decision. The Sin Oceanic principle, as established by the Supreme Court, highlighted the necessity of awaiting an ARA ruling before filing returns in certain circumstances. By aligning the petitioner's actions with this principle and the relevant case law, the court justified the condonation of delay and the subsequent processing of returns.

In conclusion, the court's judgment balanced the legal requirements, the petitioner's justifications for delay, and the principles established in case law to ensure fairness and justice in the matter of condonation of delay in filing income tax returns for the Assessment Year 2014-15.