2016 (6) TMI 645 - HC - Income Tax

Application under Section 119(2)(b) - condonation of delay - Claim for exemption under Section 10 (10C) denied - amount received on voluntarily retirement from the State Bank of India (SBI) - whether the revised return of income though filed beyond a period of limitation, be entertained, as otherwise it would cause genuine hardship to assessee? - Held that - We note that Section 119(2)(b) of the Act is very clear. Under the above provision, the Authority concerned has to apply his mind to the application before him and if he finds that not granting of the application would result in genuine hardship, than the application is to be allowed by condoning the delay. The merits of the application is not the subject of consideration at this stage. We find that the impugned order has come to a conclusion that not granting of the application to entertain the revised return of income,would lead to a genuine hardship to the Petitioner. This alone is sufficient for the purpose of allowing application under Section 119(2)(b) of the Act, as this is the only requirement. There is no requirement of any specific instructions being issued by the CBDT to the Income Tax Department to entertain the revised return of income in case of exemployee of SBI filed after expiry of period of limitation. In the above view, the delay on the part of the Petitioner in filing revised return of income would lead to genuine case of hardship as made out by the Petitioner. Prohibition to grant of any interest while condoning the delay - Held that - In this case in the return of income originally filed exemption under Section 10 (10C) of the Act was claimed but disallowed by intimation under Section 143(1) of the Act. The Petitioner had accepted the same. Thus, it would be appropriate that no interest be granted in this case.

Summary

Issues:
1. Condonation of delay in filing a revised return of income under Section 119(2)(b) of the Income Tax Act, 1961.
2. Genuine hardship faced by the petitioner due to rejection of the application for condonation.
3. Interpretation of Section 119(2)(b) of the Act and the requirement for specific instructions from CBDT.

Analysis:
The petitioner, a senior citizen, challenged the order rejecting her application for condonation of delay in filing a revised return of income for Assessment Year 2008-09 under Section 119(2)(b) of the Income Tax Act, 1961. The petitioner claimed exemption under Section 10(10C) of the Act for the amount received on voluntary retirement from the State Bank of India (SBI). The Commissioner of Income Tax, Thane, rejected the application citing the absence of specific instructions from the CBDT for extending the limitation period for ex-employees of SBI. However, the court emphasized that Section 119(2)(b) requires the authority to consider genuine hardship and condone the delay without the need for specific CBDT instructions.

The undisputed facts revealed that the petitioner opted for voluntary retirement under the Exit Option Scheme of SBI in 2008. After the initial return was processed disallowing the exemption claim, the petitioner filed a revised return in 2013, beyond the limitation period. Despite acknowledging the genuine hardship faced by the petitioner, the Commissioner rejected the application based on the lack of CBDT instructions. The court clarified that the absence of such instructions does not preclude the authority from condoning the delay if genuine hardship is established.

The court noted that similarly situated ex-employees of SBI had been granted condonation of delay in filing revised returns under Section 119(2)(b). The court referred to a specific case where interest was not granted upon condonation of delay, which was deemed applicable in the present case as well. Consequently, the court set aside the impugned order and allowed the condonation of delay in filing the revised return for Assessment Year 2008-09, emphasizing the importance of considering genuine hardship under Section 119(2)(b) without a mandate for specific CBDT instructions.

In conclusion, the court's decision focused on upholding the principles of genuine hardship and the statutory provisions under Section 119(2)(b) of the Income Tax Act, 1961. The judgment clarified that the authority has the discretion to condone delays in filing revised returns without the necessity of specific instructions from the CBDT, especially when genuine hardship is established.