2019 (2) TMI 177 - HC - Income Tax

Application u/s 119(2)(b) - condoning the delay in filing a refund application - Held that - The court is of the opinion that an assessee has to take leave of its senses if it deliberately wishes to forego a substantial amount as the assessee is ascribed to have in the circumstances of this case. Bonafide is to be understood in the context of the circumstance of any case. Beyond a plea of the sort the petitioner raises (concededly belatedly), there can not necessarily be independent proof or material to establish that the auditor in fact acted without diligence. The petitioner did not urge any other grounds such as illness of someone etc., which could reasonably have been substantiated by independent material. The petitioner, in our opinion, was able to show bonafide reasons why the refund claim could not be made in time. The statute or period of limitation prescribed in provisions of law meant to attach finality, and in that sense are statutes of repose; however, wherever the legislature intends relief against hardship in cases where such statutes lead to hardships, the concerned authorities including Revenue Authorities have to construe them in a reasonable manner. That was the effect and purport of this court s decision in Indglonal Investment & Finance Ltd. (2011 (6) TMI 229 - DELHI HIGH COURT). This court is of the opinion that a similar approach is to be adopted in the circumstances of the case. The impugned order rejecting the petitioner s application under Section 119(2)(b) is hereby set aside and quashed. The application for condonation of delay is hereby allowed for these reasons. The petitioner is permitted to prefer its refund claim within two weeks from today. In such event, the concerned Assessing Officer shall verify the concerned claim and pass the order in accordance with law within six weeks thereafter. Any amount due to the petitioner shall also be remitted to it within three weeks thereafter.

Summary

Issues:
1. Rejection of application under Section 119(2)(b) for condoning delay in filing a refund application.

Analysis:
1. The petitioner filed its Income Tax Return for Assessment Year 2013-2014, reflecting TDS of &8377; 15,62,500, but failed to claim a larger amount of &8377; 31,25,000. The petitioner sought condonation of delay in filing the refund application, attributing the omission to its Chartered Accountant's mistake. The Chief Commissioner rejected the application, citing lack of evidence that the TDS credit was unavailable at the time of filing the return. The petitioner argued that the TDS portal indicated the additional credit due, relying on a Division Bench ruling for support.

2. The revenue contended that the delay condonation claim was rightly rejected, emphasizing the absence of substantiating evidence for the auditor's alleged omission. The petitioner belatedly claimed the refund in September 2016, after the statutory deadline of March 31, 2015. The court noted the inadvertent omission, the availability of TDS information on the Income Tax Department's portal, and the petitioner's delayed realization of the error.

3. Referring to the Division Bench ruling in a similar case, the court highlighted the importance of interpreting refund provisions liberally in favor of the assessee. It emphasized the duty of tax authorities to facilitate legitimate claims and not impede them. The rejection of the petitioner's application was based solely on the Chief Commissioner's opinion that the auditor's omission was unsubstantiated. The court found the petitioner's claim of inadvertent mistake to be bona fide, considering the circumstances and lack of additional grounds for delay.

4. Recognizing the statutory limitation as a statute of repose, the court emphasized the need for a reasonable construction of laws to alleviate hardships. In line with the precedent set in the referenced case, the court set aside the impugned order, allowing the condonation of delay and granting the petitioner two weeks to file the refund claim. The Assessing Officer was directed to verify the claim and issue the order within six weeks, with the refund amount to be remitted within three weeks thereafter.

5. Ultimately, the writ petition was disposed of in favor of the petitioner, permitting the delayed refund claim and outlining the timeline for further proceedings and disbursement of the refund amount.