2020 (8) TMI 242 - HC - Income Tax

Condonation of delay in filing the return of income u/s 119(2)(b) - delay in filing the return along with refund claim - HELD THAT - The second respondent ought to have considered the explanation given by the petitioner for the delay in filing the return along with refund claim, in the light of the facts and circumstances of the case and also the fact that the petitioner had not delayed the filing of the revised return due to negligence, carelessness or due to any other frivolous reason. In that view of the matter, the second respondent ought to have condoned the delay in filing the return rather than taking a very strict and pedantic view of the matter. All, the procedures are meant only to discipline and regulate the conduct of assessee. However, strict application of procedure should not come in the grant of legitimate claim to an assessee. There is some lapse on the part of the petitioner. That itself would not be a factor to turn out the plea for filing the return of income, when the explanation offered is acceptable and genuine hardship is established. It was with a fond hope of getting justice at the hands of the second respondent and thereafter, the first respondent, the petitioner preferred Section 119(2)(b) application seeking to condone the delay in filing the return of income along with refund claim. However, the same were dismissed on the ground of limitation, adopting highly pedantic approach, which cannot be countenanced by this Court, as it is trite law that rendering substantial justice shall be paramount consideration of the Courts as well as the Authorities rather than deciding on hyper-technicalities. For the aforesaid reasons, the order dated 17.04.2012 passed by the first respondent is quashed. Consequently, the delay in filing the return of income by the petitioner relating to the assessment year 2006-07 is condoned. The respondent concerned is directed to process the return of income along with refund claim and pass appropriate orders, on merits and in accordance with law, after affording an opportunity of personal hearing to the petitioner within a period of four weeks from the date of receipt of a copy of this order.

Summary

Issues:
Delay in filing return of income for assessment year 2006-07, rejection of condonation application under section 119(2)(b) of the Income Tax Act, 1961, review application dismissal, appeal before Central Board of Direct Taxes (CBDT), dismissal of appeal, writ petition to quash the order.

Analysis:
The petitioner voluntarily filed a return of income for the assessment year 2006-07, seeking a refund of ?1,40,777 on 30.11.2009, which was considered belated. An application under section 119(2)(b) of the Income Tax Act was moved to condone the delay, but it was rejected by the second respondent on 28.04.2011. Subsequent review application and appeal before CBDT were also dismissed. The petitioner approached the High Court through a writ petition to challenge the orders and seek condonation of the delay in filing the return and processing the refund claim.

The petitioner's counsel argued that due to inadvertent omission to collect TDS certificates from the NGO involved in Tsunami Rehabilitation Programme, the return was not filed on time. The petitioner's ill-health further hindered his ability to undertake fresh contract work, leading to a decline in income for subsequent years. The counsel contended that genuine hardship existed, justifying the condonation of the delay and favorable consideration of the refund claim.

On the contrary, the Revenue's standing counsel maintained that the reasons given by the petitioner were duly considered, and the rejection of the condonation application was justified. The High Court analyzed the contentions of both parties and reviewed the material on record.

The Court noted that the petitioner's explanation for the delay was genuine and that the strict approach taken by the authorities was unwarranted. The second respondent's rejection of the application based on the delay was deemed too stringent, considering the circumstances. The Court emphasized that procedures should not impede legitimate claims, and substantial justice should prevail over hyper-technicalities.

Quoting Section 119(2)(b) of the Act and a relevant observation from the Kerala High Court, the judgment highlighted the need to consider genuine hardship and condone delays accordingly. The Court found the non-speaking order of the first respondent dismissing the application deficient in reasoning and set it aside. The delay in filing the return was ultimately condoned, directing the concerned authority to process the return and refund claim within four weeks.

In conclusion, the High Court allowed the writ petition, quashed the first respondent's order, and directed the processing of the return and refund claim, emphasizing the importance of substantial justice over procedural strictness.