2024 (9) TMI 22 - HC - Income Tax

Denial of deduction u/s 80P - Delay in filing income tax returns - condone the delay of 11 days in filing the return of income - HELD THAT - By virtue of the Circular dated 26.07.2023, the petitioner would be entitled to the benefit of Section 8P of the I.T. Act. So also, the reasons assigned in the impugned order for the purpose of refusing to condone the delay are clearly illegal and arbitrary, warranting interference of this Court. Under these circumstances, adopting a justice oriented approach and by accepting the reasons assigned by the petitioner, which clearly constitute bonafide reasons, unavoidable circumstances and sufficient cause for filing I.T. returns within the prescribed period, we are of the view that the impugned order at Annexure-G dated 04.07.2024 deserves to be quashed and the application for condonation of delay deserves to be allowed.

Summary

Issues:
1. Petitioner seeks a writ of Certiorari to quash the order of the Respondent and condone the delay in filing the income tax return.
2. Applicability of Circular No.12/2023 issued by CBDT for condonation of delay in filing income tax returns.
3. Interpretation of Section 80P of the Income Tax Act.
4. Comparison with a similar judgment in M/s. Sullia Taluk Women's Multi-Purpose Co-operative Society Limited case.

Analysis:

Issue 1:
The petitioner sought a writ of Certiorari to quash the order of the Respondent passed under Section 119(2)(b) of the Income Tax Act, 1960, dated 28.06.2024, for the assessment year 2018-19, and to condone the delay of 11 days in filing the return of income. The petitioner filed the income tax returns on 10.11.2018, followed by an intimation dated 02.07.2019 and an order dated 09.09.2021 under Section 143(3) r/w. Section 144-B of the I.T. Act, which denied deduction under Section 80P of the I.T. Act. The petitioner filed an appeal against the assessment order, pending before the appellate authority. The impugned order dated 04.07.2023 rejected the application for condonation of delay, leading to the present petition.

Issue 2:
The petitioner relied on Circular No.12/2023 issued by the CBDT, seeking condonation of delay in filing income tax returns. The petitioner's counsel referred to a similar judgment in M/s. Sullia Taluk Women's Multi-Purpose Co-operative Society Limited case, where delay in filing returns was condoned based on the circular. The counsel argued that setting aside the assessment order and condoning the delay would lead to the withdrawal of the appeal filed by the petitioner.

Issue 3:
The interpretation of Section 80P of the Income Tax Act was crucial in this case. The respondent rejected the condonation of delay based on the Assessing Officer's report, stating that the default in complying with the law was not due to circumstances beyond the assessee's control. The court analyzed the provisions of Section 80AC and the admissibility of deductions under Chapter VIA, emphasizing that the delay in filing the ITR does not automatically render deductions inadmissible.

Issue 4:
A comparison with the judgment in M/s. Sullia Taluk Women's Multi-Purpose Co-operative Society Limited case was made. The court in that case had condoned the delay in filing returns under similar circumstances, allowing the benefit under Section 80P of the I.T. Act. The present court, considering the bonafide reasons and unavoidable circumstances presented by the petitioner, quashed the impugned order and allowed the application for condonation of delay.

In conclusion, the court allowed the writ petition, quashed the impugned order, condoned the delay in filing I.T. returns, and remitted the matter back to the respondents for reconsideration in accordance with the law.