2024 (6) TMI 544 - HC - Income Tax

Condonation of delay for the Return filed for Assessment Year AY 2020-21 as otherwise conferred in terms of Section 119(2) - CBDT refusing to condone the delay - petitioner cited challenges arising from the COVID-19 pandemic as the reason for the delay - HELD THAT - While it is true that Financial Year FY 2019-20 and the filing of Returns in respect of that FY could be said to have been impacted by the outbreak of the pandemic, the respondents take into consideration the undisputed fact that the time for filing of such Returns was extended upto 15 February 2021. The respondent appears to have essentially borne in consideration the fact that although the financials for the year were duly finalized and signed on 31 July 2020, the Return of Income was ultimately filed only on 30 March 2021. More importantly, the recital of facts which appear under 7(iii) clearly demolish any assertion of financial constraints that may have befallen the assessee. No justification to interfere with the ultimate view that legislature has provided time limits for certain obligations under the Act and these time limits have to be observed to be able to claim those deductions, allowance and avoid interest and penalty. This cannot be termed as hardship but it is compliance requirements imposed by law in the interest of proper regulation of the Act. If these time limits were to be relaxed in a particular case on mere fact that a default occurred due to some inadvertence then there will be no sanctity of limitation prescribed by the legislature. Therefore, power of condonation u/s 119(2) can be exercised to deal with the extraordinary circumstances only which would have led to delay in statutory compliance and the same cannot be exercised routinely. No justification to interfere with the order impugned. The writ petition fails as no justification to interfere with the CBDT's decision.

Summary

Issues involved: Petition challenging refusal to condone delay in filing Income Tax Return for Assessment Year 2020-21 u/s 119(2) of the Income Tax Act, 1961.

The writ petition challenged the order of the Central Board of Direct Taxes (CBDT) refusing to condone the delay in filing the Income Tax Return for Assessment Year 2020-21. The petitioner cited challenges arising from the COVID-19 pandemic as the reason for the delay. However, the CBDT considered the extension of timelines due to the pandemic and the petitioner's failure to file the return within the extended period. The CBDT also noted the petitioner's history of filing belated returns for previous assessment years, undermining the claim of being a law-abiding taxpayer. Additionally, the petitioner's assertion of financial crisis and cash crunch was refuted based on financial statements showing profits and positive cash flow, indicating a lack of genuine reasons for the delay.

The CBDT emphasized the importance of timely filing for claiming deductions under Section 80AC of the Income Tax Act, highlighting that failure to meet filing deadlines could result in denial of deductions. The High Court upheld the CBDT's decision, emphasizing the statutory compliance requirements and the necessity of adhering to prescribed time limits to maintain the sanctity of legislative provisions. The Court concluded that the power of condonation u/s 119(2) should be reserved for extraordinary circumstances leading to delay in statutory compliance, rather than routine use.

In summary, the High Court dismissed the writ petition, finding no justification to interfere with the CBDT's decision and emphasizing the importance of complying with statutory timeframes for claiming deductions and avoiding penalties.