2023 (7) TMI 1215 - HC - Income Tax

Condonation of delay filing return of income u/s 119 - delay of 43 days in filing the return of income - mandation to give proof of genuine hardship - applicant was seeking refund denied on denial of condonation of delay filling ROI - Petitioner explained that the delay was due to the concerned person who was entrusted with the work of filing of return being indisposed due to medical reasons - HELD THAT - The court has held that the phrase genuine hardship should be construed liberally particularly when the legislature had conferred the power to condone the delay to enable the authorities to do substantive justice to the parties by disposing the matter on merits. While considering this aspect of genuine hardship, the authorities are expected to bear in mind that ordinarily applicant applying for condonation of delay does not stand to benefit by lodging its claim late. In the case at hand where applicant was seeking refund of a large amount of Rs. 82,13,340/-. Refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. The authorities fail to understand that when the delay is condoned, the highest that can happen is that the cause would be decided on merits after hearing the parties. In our view, the approach of the authority should be justice oriented so as to advance cause of justice. If refund is legitimately due to applicant, mere delay should not defeat the claim for refund. Having said so, we are satisfied that Board has not considered the prayer for condonation of delay in its proper perspective. It needs to be considered afresh. We hereby quash and set aside the order impugned in this petition and remit the matter back to the Board for denovo consideration. We direct the Board to decide the question of hardship as well as that of correctness and geniuineness of the refund claim.

Summary

Issues involved:
The issues involved in this case are the delay in filing the income tax return for the assessment year 2016-2017, the request for condonation of delay, and the rejection of the condonation request by the tax authorities.

Delay in Filing Income Tax Return:
The petitioner, a joint venture, filed its income tax return belatedly due to the concerned person responsible for filing being indisposed for medical reasons. The delay was 43 days beyond the extended deadline. The petitioner later realized the return was filed incorrectly as an AOP instead of a firm and submitted a revised return. Despite providing explanations and requested details, the impugned order dated 24th December 2020 rejected the condonation of delay.

Condonation of Delay Request:
The petitioner sought condonation of delay in filing the income tax return, explaining the reasons for the delay and submitting necessary documents. The authorities, in the impugned order, mentioned that the reasons for the delay were not supported by evidence and failed to provide the petitioner with the opportunity to explain further. The court referred to the phrase "genuine hardship" as discussed in previous judgments to emphasize the need for a liberal interpretation in such cases. The court highlighted that refusing to condone the delay could lead to a meritorious matter being dismissed at the initial stage, defeating the cause of justice.

Rejection of Condonation Request:
The court found discrepancies in the impugned order, indicating that it was passed without proper consideration by the Board. The court noted that the order was sent to officials but not to the Member whose approval was stated in the order. Additionally, the court highlighted the lack of opportunity for the petitioner to explain the delay adequately. The court emphasized the importance of a justice-oriented approach by the authorities to advance the cause of justice, especially when a substantial refund is at stake.

Conclusion:
The High Court quashed and set aside the impugned order dated 24th December 2020, remitting the matter back to the Board for fresh consideration. The court directed the Board to reevaluate the request for condonation of delay and the genuineness of the refund claim, ensuring a personal hearing for the petitioner. The court emphasized that the order must be passed and signed only by the Board or its members directly, not by any other individual, even with the Board's approval. All rights and contentions of the parties were kept open, and the petition was disposed of accordingly.