2020 (3) TMI 1081 - HC - Income Tax

Condonation of delay in filing returns of the income tax for the assessment years - proof of genuine hardship which caused the delay in filing returns - HELD THAT - Incidents in the petitioner's family is a great tragedy inasmuch as his daughter who was then only 2 years old, was diagnosed with a serious cancerous ailment and he had to run from hospitals to hospitals for treatment of his child and that it is only in view of the extreme mental strain and the circumstances under which the petitioner was forced to divert his energies solely for the purpose of treatment of his child, that the delay has occurred. True, that the petitioner could not concentrate on his business activities, which resulted in the delay in submissions of the returns, but the same occurred only due to these circumstances and that the department has no case that there is any element of culpable negligence or any malafides or there was any deliberate delay on the part of the petitioner in delaying the submission of his returns. Taking note of the overall facts of this case and more particularly, taking into account the tragic circumstances, under which the petitioner was forced to undergo in view of the serious cancer ailments, that had affected his young and infant daughter, this Court is of the considered view that the matter could be given a second look by the 1st respondent after considering all the matters afresh. Accordingly, It is ordered that the matter will stand remitted to the 1st respondent for consideration of all the matters afresh and after taking into account the additional materials that being produced by the petitioner without any further delay.

Issues Involved:
1. Condonation of delay in filing income tax returns.
2. Rejection of the application under Sec.119(2)(b) of the Income Tax Act.
3. Evaluation of genuine hardship as per CBDT Circular No.9/2015.
4. Applicability of judicial precedents in condoning delays.
5. Requirement of additional evidence for reconsideration.

Detailed Analysis:

1. Condonation of Delay in Filing Income Tax Returns:
The petitioner, running a franchise of M/s. Karvy Stock Broking Ltd., sought condonation of delay in filing income tax returns for the assessment years 2012-13, 2013-14, and 2014-15. The delay was attributed to the petitioner's preoccupation with the treatment of his child diagnosed with cancer in 2010, which continued until 2017.

2. Rejection of the Application Under Sec.119(2)(b) of the Income Tax Act:
The 1st respondent rejected the petitioner's application for condonation of delay (Ext.P3) on 30.07.2019 (Ext.P4 order), stating that the petitioner was running the franchise during the relevant period and could have filed the returns. The petitioner contended that this reason was hyper-technical and contrary to the purpose and object of Sec.119(2)(b) and CBDT Circular No.9/2015.

3. Evaluation of Genuine Hardship as per CBDT Circular No.9/2015:
The petitioner argued that his case met all conditions specified in Ext.P5 circular, which mandates that the income declared and refund claimed must be correct and genuine, and that the case must involve genuine hardship. The petitioner highlighted the mental strain and circumstances due to his daughter's illness, which diverted his attention from business activities, causing the delay.

4. Applicability of Judicial Precedents in Condoning Delays:
The petitioner relied on several judicial precedents, including:
- Sudha Krishnaswamy v. Chief Commissioner of Income Tax: The Karnataka High Court emphasized substantial justice over hyper-technicalities, accepting genuine hardship as a valid reason for delay.
- Artist Tree Pvt. Ltd. v. Central Board of Direct Taxes: The Bombay High Court cautioned against a restrictive approach in delay condonation, especially when there is no malafide or culpable negligence.

5. Requirement of Additional Evidence for Reconsideration:
The court observed that the petitioner had not provided comprehensive details of the child's treatment, relying mainly on Ext.P1 certificate from the Regional Cancer Centre. The court directed the petitioner to submit additional medical records and an affidavit detailing the treatment and periods in question. The 1st respondent was instructed to reconsider the application afresh upon submission of these materials.

Conclusion:
The court quashed the impugned Ext.P4 order and remitted the matter to the 1st respondent for fresh consideration, emphasizing a fair and liberal approach in light of the petitioner's genuine hardship. The petitioner was directed to submit additional medical evidence and an affidavit within one month. The 1st respondent was to render a considered decision within 2-3 months thereafter, taking into account the judicial precedents and the petitioner's contentions. The writ petition was disposed of with these observations and directions.

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