2019 (8) TMI 933 - HC - Income Tax

Raising objection by the third party against Condonation of delay in filing the income tax returns by CBDT - 2nd respondent is stated to have been elected to the Lok Sabha from the Mandi Constituency in the election that concluded in May 2019 and just before the election, he filed the tax returns for the assessment year 2014-2015 to 2017-2018 along with an application u/s 119(2)(b) - HELD THAT - All that is required for the 1st respondent is to consider whether it is desirable or expedient to allow the petitioner to file the returns for avoiding any genuine hardship. In the case on hand, the 1st respondent has considered whether there was a genuine hardship. Once the discretion available under Clause (b) of sub-section (2) of Section 119 has been exercised, there is no scope for this Court to interfere with such discretion, especially at the instance of a third party. Therefore, we find that the petitioner has no locus standi to challenge the impugned order. Hence, the writ petition is dismissed along with pending application(s), if any.

Summary

Issues: Challenge to order condoning delay in filing income tax returns under Section 119(2)(b) of the Income Tax Act, 1961; Locus standi of a third party to challenge such orders.

Analysis:
1. The case involves a challenge to an order passed by the Principal Commissioner of Income Tax under Section 119(2)(b) of the Income Tax Act, 1961, condoning the delay in filing income tax returns for the assessment years 2014-2015 to 2017-2018.

2. The petitioner, a voter in the Constituency, contended that the order was arbitrary and groundless. The delay condonation could impact the 2nd respondent's compliance with the law, potentially affecting their entitlement to contest elections, prompting the writ petition.

3. The critical issue addressed by the court was whether a third party, in this case, the petitioner, had the standing (locus standi) to challenge such an order. Section 119(2)(b) empowers the 1st respondent to admit applications for exemptions or reliefs after the specified period, based on genuine hardship.

4. The court emphasized that once the 1st respondent exercises discretion under Section 119(2)(b) and considers genuine hardship, there is no scope for interference by the court, especially at the behest of a third party. Therefore, the petitioner lacked locus standi to challenge the order, leading to the dismissal of the writ petition.

5. The judgment underscores the limited role of third parties in challenging administrative decisions under tax laws, emphasizing the discretionary powers vested in tax authorities to address genuine hardships. The decision reaffirms the principle that courts should not interfere with such discretionary decisions unless there is a clear violation of law or procedure.