Learning- work in advance and do not wait for last moments and expectation of extensions E-ITR – DELAY OF FEW SECONDS IN UP LOADING CONDONED BY HIGH COURT. A CASE FOR SUITABLE PROVISIONS FOR CONDONATION OF DELAYS BY ASSESSING Officer TO AVOID LITIGATION AND HARASSMENT OF TAX PAYERS.

[DEV KUMAR KOTHARI]

Learning- work in advance and do not wait for last moments and expectation of extensions

E-ITR – DELAY OF FEW SECONDS IN UP LOADING CONDONED BY HIGH COURT. A CASE FOR SUITABLE PROVISIONS FOR CONDONATION OF DELAYS BY ASSESSING Officer TO AVOID LITIGATION AND HARASSMENT OF TAX PAYERS.

Case under study:

BALAJI SUPER ALLOYS REPRESENTED BY ITS MANAGING PARTNER S RAJENDRAN VERSUS PRINCIPAL COMMISSIONER OF INCOME TAX, COIMBATORE - 2023 (6) TMI 1137 - MADRAS HIGH COURT

General discussions:

Learning - change in attitudes required:

Now -a -days  we need to learn and change habits regularly  to ensure that any work is completed and compliance is made well in advance and should not wait for last moments.

We should also not  expect and  wait for  extension of last date or time for compliance to be notified by concerned authorities.

Constraints need to overcome:

Although taxpayer have many constraints and may have to depend on many persons for completing  various work and sub works to be ready for completing compliance.

Delay at any point can cause delay in compliance causing loss of many privileges and benefits and may invite additional costs by way of late filing fees, interest, penalty etc.

Therefore, efforts must be to overcome all constraints and to work by all team members well within time keeping in mind that contingencies can be faced at any stage and in any system.

In the judgment  honorable Court has also observed as follows:

“ The petitioner, being a company, ought to have ensured that the filing of return was sufficiently in time factoring in possible glitches or technical difficulties.”

In this regard author wish to state that whether it be a case of individual or company, when assessee has to rely on many other persons  working limitations are multiplied due to working limitations of concerned persons. Therefore, all in the team have to be careful and have to ensure that respective work are completed in desired sequences and well in time.

Even when  work is completed by assessee himself he has to depend on documents to be received from other parties. And there can be reasons for delay which need to be overcome.

Limitations of authorities:

In many legal provisions there are limitation  within which authorities can work. When work is to be noted and acknowledged by ITES systems ( software and hardware)  there is difficulty to apply any discretion and rejection is bound to take place by the system even if there is delay of few seconds. The law provides for condonation of delay but authorities may find it difficult to exercise such discretion when under the system rejection is made due to delay , even of few seconds, and in that case tax payer or concerned party will have to approach further senior authority and / or Courts.

In the case under study we find that there was a delay of few seconds in uploading the Return of Income. Due to that consequences followed and assessee was denied advantages and privileges which  could be allowed subject to compliance within due date.

As per system, ROI was filed after midnight of the last date that means on the day next to the last day allowed for filing of ITR. This was as per system itself.

On application,  the CIT rejected application for condonation of delay taking view that system has found that the ROI was filed beyond the due date. Even after making further submissions learned CIT could not / or say did not  condone delay may be due to peculiar features of online filing and generation of reports.

Therefore, assessee had to file a Writ Petition (WP) before the High Court. The High Court condoned delay.

In the above write-up matter is discussed in a general way because the concept underlying will be applicable in different circumstances and under different  provisions  wherein dates and matter will be different however requirement and failure to meet requirement can have different consequences.

Amendment in law or administrative circular is desired:

To meet such contingencies, the AO can be authorized to consider issues in a practical manner and condone delay himself and on application of assessee after considering facts and circumstances and his order must be appealable before appellate authorities.

The matter before High Court is analyzed and summarized  by way of reproducing some of relevant portions with highlights added by author:

1.  The petitioner is a company  and has challenged order dated 24.11.2022 passed by the sole respondent, Principal Commissioner, Coimbatore under Section 119(2)(b) of the Income Tax Act, 1961 (in short 'Act') and a subsequent order passed by the respondent on 03.03.2023 rejecting the representation filed by the petitioner on 15.02.2023.

2. The petitioner has filed a return of income for assessment year (AY) 2020-2021 on 16.02.2021. Admittedly, the return had come to be uploaded only on 00.00.21 am of 16.02.2021, with a delay of 21 seconds, as the last date for filing of return was 15.02.2021 midnight.

3. This is explained by the petitioner at paragraph 5 of its affidavit to the effect that the return had been prepared in Extensible Markup Language (XML) format on 15.02.2021 and filed at 11.59 p.m. However, it so happened that the uploading of the return took place 21 seconds later. Hence, and on the basis that the return of income had been uploaded belatedly, the intimation issued under Section 143(1) on 24.12.2021 disallowed the claim of deduction under Section 80IA of the Act and a consequential demand was raised.

4. The petitioner thus sought condonation of the delay of 21 seconds for filing return of income which had come to be rejected by the respondent vide order dated 24.11.2022, wherein it is stated that the return of income had been due on or before 10.01.2021, not noticing that the time had been extended till 15.02.2021. This necessitated the petitioner to approach the respondent by way of a rectification petition dated 15.02.2023, which has also been dismissed on 03.03.2023, the respondent stating that the error in date only constitutes a typographical error.

5. There is nothing untoward in the rejection of the deduction under Section 80IA for the reason that the return has admittedly been uploaded belatedly. However, the quantum of delay is not substantial, being 21 seconds. Undoubtedly, the petitioner ought not to have undertaken the exercise of filing of the return literally at the last second, but in my considered view, the 21 seconds delay could be considered to be a human error and condoned, bearing in mind the dictates of substantial justice.

6. Even as per the affidavit filed in support of the Writ Petition, the return had been filed only at 11.59 p.m. on 15.02.2021. The petitioner, being a company, ought to have ensured that the filing of return was sufficiently in time factoring in possible glitches or technical difficulties.

7. The defence of the learned Standing Counsel is that there is nothing wrong in the rejection of the return, since the software is so programmed to automatically close the portal at midnight. This may well be right. However, the request for condonation has been considered not by a machine but a human being, who, in my view, could well have considered the request in proper perspective, condoning the delay of 21 seconds.

8. For the aforesaid reasons, the impugned orders are set aside and the delay is condoned. The return of the petitioner for assessment year 2020-2021 shall be taken to have been filed in time with all consequences thereof. The petitioner will ensure that, henceforth, statutory compliances and due diligence are effected well in time.

9. This Writ Petition stands allowed. No costs. Connected Miscellaneous Petitions are closed.

Request and suggestions:

Author request concerned authorities to accept this judgment and to make provisions for condonation of delay by AO  and his order be made appealable . This will help in timely completion of work and reduce litigation and harassment.