2017 (11) TMI 1606 - HC - Income Tax

Condonation of delay in filing the revised return of income u/s 119 - claim of the petitioner both under Sections 80HHC and 80-IA - Held that - The condonation of delay is a discretionary matter and a fair exercise of discretion cannot be interferred with in exercise of the extra jurisdiction under Article 226 of the Constitution of India. This Court does not find anything arbitrary in the impugned order passed by Respondent No. 1. Moreover, admittedly, the claim of the petitioner both under Sections 80HHC and 80-IA of the Act, is an issue which is highly debatable. As is recorded in the impugned order also, the matter is pending before the larger Bench of the Supreme Court in the case of Asstt. CIT v. Micro Labs Ltd. 2015 (12) TMI 708 - SUPREME COURT . Thus it cannot be said to be a bonafide omission in the original return to make a claim of the deduction clearly admissible to the assessee. The issue being a debatable one, the revised return for that purpose could not have been filed by the assessee and Respondent No.1 cannot be faulted in rejecting such condonation of delay application. The petitioner-assessee cannot seek the condonation of delay in filing the revised return for such purposes as a matter of right even though such claim is not clearly admissible in law on merits. The use of discretion by the Authority concerned, in such circumstances, rejecting the very application seeking the condonation of delay, cannot be said to be wrong in any manner.

Summary

Issues:
Condonation of delay in filing revised return of income for Assessment Year 1997-98 under Section 119(2)(b) of the Income Tax Act, 1962.

Analysis:

1. Rejection of Condonation Application:
The petitioner sought condonation of delay in filing the revised return of income for the Assessment Year 1997-98. The impugned order by the Chief Commissioner of Income Tax rejected the application citing various reasons. The Circular No.9/15 dated 09.06.2015 was referred to, emphasizing that the claim of refund should arise due to specific reasons like excess tax deductions or advance tax payments. The petitioner's claim under Section 80HHC in the revised return was questioned as it was filed beyond the time limit specified in Sec.139(5). Additionally, the issue of claiming deductions under both Section 80IA and 80HHC was considered debatable, as highlighted in the Circular and previous court decisions.

2. Discretionary Nature of Condonation:
The court noted that condonation of delay is a discretionary matter, and interference under Article 226 of the Constitution of India is limited. The claim made by the petitioner under Sections 80HHC and 80-IA was deemed highly debatable, with the matter pending before a larger Bench of the Supreme Court. The court found that it was not a bonafide omission to file a revised return for a debatable issue, and hence, the rejection of the condonation application was justified.

3. Compliance with Circular No.9/15:
The court emphasized the importance of complying with the guidelines laid down in Circular No.9/15 dated 09.06.2015. The Circular specified that the income/loss declared and refund claimed should be correct and genuine, and the case should involve genuine hardship on merits. Since the issue of deductions under Section 80HHC and 80-IA was contentious and subject to debate, the court upheld the decision of the Chief Commissioner in rejecting the condonation of delay application.

4. Final Judgment:
In conclusion, the court found that the impugned order was in accordance with the guidelines provided by the Central Board of Direct Taxes. The petitioner's writ petition was deemed devoid of merit and dismissed accordingly. No costs were awarded, and a copy of the judgment was directed to be sent to the respondents.