2021 (1) TMI 919 - HC - Income Tax

Condonation of delay in filing the returns - claim of deduction u/s 80P rejected - Appellant No.1 herein rejected the application filed under Section 119(2)(b) but the learned single Judge has set aside the said order and has remanded the matter to respondent No.3 for re-examination of the said application pertaining to condonation of delay in filing the returns for the assessment year 2018-19 - HELD THAT - On perusal of the impugned order of the learned single Judge as well as the order of appellant No.1/respondent No.1 in the writ petition passed under Section 119(2)(b) of the Act, we find that the learned single Judge was right in setting aside the said order and remanding the matter - while remanding the matter, the same ought to have been remanded to respondent No.1 in the writ petition i.e., appellant No.1 herein. Therefore, with the aforesaid modification of the impugned order, the appeal stands disposed. Since a time frame of three months from the date of receipt of the certified copy of the impugned order was granted by the learned single Judge to complete the reconsideration of the application filed by the respondent herein seeking condonation of delay in filing the returns, we now extend the said time by three months from the date of receipt of certified copy of this judgment.

Summary

Issues:
1. Legality and correctness of the order passed by the learned single Judge in W.P.No.29110/2019.
2. Consideration of delay in filing the return of income for the relevant Assessment Year (2018-19) under Section 119(2)(b) of the Income Tax Act, 1961.
3. Exercise of discretion in genuine cases of hardship for condoning delay in filing returns.
4. Remand of the matter to the appropriate authority for reconsideration.

Analysis:

1. The appeal questioned the legality and correctness of the order passed by the learned single Judge in W.P.No.29110/2019, which pertained to the writ petition seeking the quashing of an order refusing to condone the delay in filing the return of income for the Assessment Year 2018-19 under Section 119(2)(b) of the Income Tax Act, 1961. The appellant, who was the Principal Commissioner of Income Tax, Mangaluru, had rejected the application for condonation of delay, leading to the writ petition.

2. The learned single Judge referred to a decision of the Delhi High Court, emphasizing the consideration of genuine hardship before condoning the delay in filing returns. The appellant contended that the discretion was wrongly exercised in favor of the respondent, as the delay in filing the returns for the assessment year in question affected the deduction claim under Section 80P of the Act. The single Judge set aside the order and remanded the matter for re-examination, which the appellants argued should have been directed to the appellant rather than another respondent.

3. After hearing both parties, the High Court found that the single Judge was correct in setting aside the order and remanding the matter for reconsideration. However, the Court noted that the remand should have been to the appellant rather than another respondent. With this modification, the appeal was disposed of. The Court also extended the time frame for reconsideration by three months from the date of receipt of the judgment.

4. The Court disregarded the delay in filing the appeal, given the disposition of the appeal in the aforementioned terms. The incidental applications were also disposed of in light of the main judgment. The judgment highlighted the importance of considering genuine hardship in condoning delays and ensuring proper remand of matters for reconsideration to the appropriate authority.