2024 (5) TMI 741 - HC - Income Tax

Condonation of delay in filing income tax return - Rejection of application made u/s 119(2)(b) - Genuine hardship - Refund of the TDS amount - whether the PCIT, while passing the impugned order and consequently rejecting the condonation of delay application filed by the assessee, has accorded any reasons or justification for rejecting the delay condonation application? - HELD THAT - Plain reading of the aforesaid CBDT Circular No. 9/2015 the power of accepting or rejecting the application for condonation of delay in filing a refund claimed u/s 119 (2) (b) of the Act rests with the PCIT and while deciding such application, the pre-requisites, namely, correctness and genuineness of the claim and whether the case was of genuine hardship on merits shall have to be met. It is evident from a bare reading of the order impugned before us that the PCIT while dealing with condonation of delay application has not followed the legislative mandate enshrined in Section 119 (2) (b) of the Act and summarily rejected the application without ascribing any reasons or rationale. There is no element of any reasoning, rationale or discussion by the PCIT before arriving at the conclusion that the case of assessee does not fall under the ambit of genuine hardship. Therefore, the reasons ascribed in the counter affidavit merit no consideration as the impugned order before us does not allude to any rationale before deciding the condonation of delay application filed under Section 119 (2) (b) of the Act. It is quintessential to understand that the PCIT while exercising the powers under Section 119 (2) (b) of the Act acts like a quasi-judicial body and is bestowed with the cardinal responsibility to pass a reasoned order. Thus, an order passed under Section 119 (2) (b) of the Act which is devoid of any reasoning or rationale would be de hors the legislative mandate prescribed under the beneficial scheme of Section 119 of the Act. It is strikingly clear that the impugned order is passed in a pedantic manner without any application of mind as the order records no reasons before summarily rejecting the condonation of delay application. Remand the matter back to the desk of the concerned PCIT with a direction to consider the condonation of delay application filed by the assessee afresh, in accordance with the law and as per extant regulations.

Summary

Issues Involved:
1. Whether the PCIT provided adequate reasons for rejecting the condonation of delay application filed u/s 119 (2) (b) of the Income Tax Act, 1961.
2. Whether the impugned order adhered to the legislative mandate of Section 119 (2) (b) of the Act and CBDT Circular No. 9/2015.

Summary:

Issue 1: Adequacy of Reasons for Rejection

The assessee, a retired Indian Air Force personnel practicing as an Advocate, filed his Income Tax Return (ITR) for AY 2013-14 on 21 July 2016, declaring an income of INR 3,24,600/- and TDS of INR 59,170/-. On 04 July 2017, the assessee applied for a TDS refund, but the Revenue informed him that the ITR could not be processed due to late filing and advised him to seek condonation of delay u/s 119 (2) (b) of the Act. The assessee filed the condonation application on 18 July 2017, citing reasons such as lack of TDS information and non-issuance of TDS certificate. The PCIT rejected the application on 28 March 2018, stating it did not fall under 'genuine hardship' as per CBDT Circular No. 9/2015. The Court noted that the impugned order lacked any discussion, analysis, or rationale for this conclusion.

Issue 2: Adherence to Legislative Mandate

The Court emphasized that Section 119 (2) (b) of the Act is a beneficial provision allowing the CBDT to admit applications for exemptions, deductions, or refunds in cases of genuine hardship beyond statutory limitations. The relevant CBDT Circular No. 9/2015 mandates that the correctness and genuineness of the claim and the presence of genuine hardship must be ensured. The Court found that the PCIT did not follow this mandate and summarily rejected the application without providing reasons. The counter-affidavit filed by the Revenue attempted to justify the rejection, but the Court held that the validity of an order must be judged by the reasons mentioned in the order itself, not by subsequent explanations.

The Court concluded that the PCIT, acting as a quasi-judicial body, failed to pass a reasoned order as required by law. Consequently, the impugned order was set aside, and the matter was remanded back to the PCIT for fresh consideration in accordance with the law and extant regulations.

In view of the above, the writ petition was allowed and disposed of accordingly, along with any pending applications.