2024 (12) TMI 647 - HC - Income Tax

Condonation of delay in filing ITR - as submitted delay occurred because of COVID-19 pandemic situation, the petitioner was quarantine at his Noida residence for Covid related infections which caused general hardship to the petitioner - delay caused due to genuine hardship or willful and deliberate intention HELD THAT - Where statute provides for the provisions for condonation of delay by an appropriate authority upon due consideration of the relevant facts and circumstances, then any subordinate authority under the authority prescribed before whom such an application is filed is required to redirect the assessee to the authority prescribed under the Act who has been bestowed with the power of condonation of any delay upon due consideration of the facts and the materials. The authority which rejected the application filed by the petitioner was required to refer the matter to the CBDT as the power for consideration of condonation of delay was bestowed only on the CBDT under the statute and not on any other authority. n the facts and circumstances of the case, this Court is persuaded to accept the view rendered by the Telengana High Court 2023 (4) TMI 955 - TELANGANA HIGH COURT and the Orissa High Court 2024 (4) TMI 1209 - ORISSA HIGH COURT and is therefore of the considered view that the hardship on medical grounds which are urged before this Court cannot be disregarded without a proper finding on that issue by the authority concerned. Prima facie it appears to the Court that the hardship suffered by the petitioner was for reasons beyond its control and for the medical conditions mentioned as the same occurred during the COVID 19 pandemic situation. Considering the submissions made by the petitioner and the averments made in the writ petition and the Judgments referred by the petitioner, this Court is of the view that the writ petition can be disposed of with a direction to the CBDT authorities to consider the claim of the petitioner for condonation of the delay on the ground of hardship and thereafter pass appropriate orders. CIT is directed to place the necessary records of the application filed by the petitioner before the CBDT and which in turn will pass necessary order thereon, as per the directions above.

Summary

Issues:
1. Rejection of option under Section 115BAA by Income Tax authorities.
2. Request for rectification and reprocessing of Income Tax Return.
3. Condonation of delay in filing ITR for Assessment Year 2020-21.
4. Interpretation of Section 119 (2) (b) of the Income Tax Act, 1961.

Analysis:
1. The petitioner, a private limited company, opted for the reduced corporate tax scheme under Section 115BAA by filing Form 10-IC for the assessment year 2020-21. However, the Income Tax authorities rejected the option, leading to a tax demand of Rs. 15,68,780/- along with interests, citing a notice dated 13.11.2022. The petitioner sought rectification, but an order under Section 154 was issued, raising additional tax and rejecting the Form 10-IC.

2. The petitioner requested rectification due to mistakes in the notice received on 13.11.2022, but the respondent issued an order under Section 154, rejecting the Form 10-IC. The petitioner cited a circular allowing condonation of delay under Section 119 (2) (b) due to the COVID-19 pandemic, which caused the delay in filing the returns. The petitioner approached the Court seeking relief under Section 119(2) for condoning the delay.

3. The petitioner argued that the delay in filing the ITR was due to genuine hardship caused by a medical issue during the COVID-19 pandemic. Referring to judgments from other High Courts, the petitioner requested the CBDT to consider the case liberally under Section 119(2) and condone the delay of 16 days in filing the ITR for the assessment year 2020-21.

4. The Court analyzed Section 119 (2) (b) and referred to judgments from Telangana and Orissa High Courts, which allowed petitions for condonation of delay. The Court emphasized that the power to condone delay lies with the CBDT and not subordinate authorities. It concluded that the hardship faced by the petitioner should be considered, directing the CBDT to review the case and make a decision within 60 days.

This detailed analysis of the judgment highlights the issues of rejection of the tax scheme option, rectification request, condonation of delay, and the interpretation of Section 119 (2) (b) under the Income Tax Act, 1961. The Court's decision to direct the CBDT to consider the petitioner's case for condonation of delay due to genuine hardship provides clarity on the legal principles involved in the matter.