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2024 (4) TMI 500 - HC - Income TaxCondonation of delay in filing the revised return of income claiming refund - application filed u/s 119(2)(b) rejected - genuine hardship of the petitioner rejected - HELD THAT - On perusal of the provisions contained in Section 119(2)(b) of the Income Tax Act read with circular no.09/2015 dated 09.06.2015 issued by CBDT, it appears that genuine hardship which the petitioner is required to establish is the hardship that would be caused to the petitioner if the delay is not condoned or the time limit is not extended. The petitioner has clearly stated in its application filed u/s 19(2)(b) of the I.T. Act under Annexure-11 that at the time of filing of its return of income for assessment year 2021-22, it has inadvertently erred in claiming the past years deficit against the current year s income under Section 11(1) as application of income and instead offered the total income as income chargeable to tax. Had the past deficit been claimed as application of income, the petitioner would have entitled to a refund The time limit for filing revised return under Section 139(5) of the I.T. Act for the assessment year 2021-22 was 31.12.2022. The petitioner, after receipt of the intimation order under Section 143(1) of the I.T. Act for the assessment year 2021-22, initially filed an application under Section 154 of the I.T. Act before the Assessing Officer-opposite party no.2 for rectification on account of mistake of the total income being chargeable to tax without setting off the past deficit, which is apparent from the record. But the Assessing Officer-opposite party no.2, vide order rejected the said application. The petitioner assailed the intimation order under Section 143(1) of the I.T. Act as well as the order passed under Section 154 of the I.T. Act before the First Appellate Authority under Section 250 of the I.T. Act, which was dismissed, with an observation that the petitioner has the remedy of making application under Section 119(2)(b) of the I.T. Act. Thereby, finding no other alternative, the petitioner approached opposite party no.1 by filing an application under Section 119(2)(b) of the I.T. Act. But opposite party no.1, without taking into consideration genuine hardship of the petitioner, mechanically rejected the said application, vide impugned order which cannot be sustained in the eye of law. In view of the provisions contained in Section 119(2)(b) of the I.T. Act read with circular dated 09.06.2015 issued by CBDT, which stipulates that application for claim of refund/loss is to be made within six years from the end of the assessment year for which such application/claim is made. The last date for filing of revised return for the assessment year 2021-22 was 31.12.2022 and the petitioner made application under Section 119(2)(b) on 16.10.2023 for condonation of delay in filing revised return. Thereby, the application filed by the petitioner is well within six years time limit, as stipulated in the circular. When the petitioner filed application indicating its genuine hardship , opposite party no. 1 could have considered the same in proper perspective, but, without doing so, it rejected such application vide impugned order which cannot be sustained in the eye of law. This Court is of the considered view that the order passed by opposite party no.1 in rejecting the application filed by the petitioner u/s 119(2)(b) of the I.T. Act for condonation of delay in filing the revised return for the assessment year 2021-22 cannot be sustained in the eye of law. Therefore, the said order is liable to be quashed and is hereby quashed. Accordingly, this Court directs the authority concerned to take follow up action in accordance with law. WP allowed.
Issues Involved:
1. Condonation of delay in filing revised return u/s 119(2)(b) of the Income Tax Act, 1961. 2. Rejection of application for condonation of delay by the Income Tax Department. 3. Genuine hardship caused by non-filing of revised return. Summary: Issue 1: Condonation of delay in filing revised return u/s 119(2)(b) of the Income Tax Act, 1961 The petitioner, an educational and charitable trust registered u/s 12A(1)(aa) of the Income Tax Act, sought to quash the order dated 22.01.2024, which rejected their application for condonation of delay in filing the revised return of income for the assessment year 2021-22. The petitioner's original return filed on 15.03.2022 was disallowed due to a delay in filing the audit report in Form-10B, resulting in a demand of Rs. 5,47,24,100/-. The petitioner had an accumulated deficit of Rs. 5,41,52,906.70 which was not adjusted in the return, leading to an inadvertent mistake. Issue 2: Rejection of application for condonation of delay by the Income Tax Department The Assessing Officer rejected the rectification petition u/s 154 of the I.T. Act. Subsequently, the petitioner filed an application u/s 119(2)(b) for condonation of delay, which was rejected by the opposite party no.1 on 22.01.2024, stating that the genuine hardship for non-filing of the revised return was not justified. Issue 3: Genuine hardship caused by non-filing of revised return The petitioner argued that the rejection was arbitrary and contrary to the provisions of law. The petitioner highlighted the genuine hardship due to the non-adjustment of the past deficit and referenced various judgments supporting their claim. The court noted that the petitioner had demonstrated genuine hardship and that the rejection of the application for condonation of delay was not justified. Conclusion: The court quashed the order dated 22.01.2024 rejecting the application for condonation of delay in filing the revised return and directed the concerned authority to take follow-up action in accordance with the law. The writ petition was allowed without any order as to costs.
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