2021 (1) TMI 920 - HC - Income Tax

Condonation of delay in filing the returns - claim of deduction u/s 80P rejected - Appellant No.1 herein rejected the application filed under Section 119(2)(b) but the learned single Judge has set aside the said order and has remanded the matter to respondent No.3 for re-examination of the said application pertaining to condonation of delay in filing the returns for the assessment year 2018-19 - HELD THAT - On perusal of the impugned order of the learned single Judge as well as the order of appellant No.1/respondent No.1 in the writ petition passed under Section 119(2)(b) of the Act, we find that the learned single Judge was right in setting aside the said order and remanding the matter - while remanding the matter, the same ought to have been remanded to respondent No.1 in the writ petition i.e., appellant No.1 herein. Therefore, with the aforesaid modification of the impugned order, the appeal stands disposed. Since a time frame of three months from the date of receipt of the certified copy of the impugned order was granted by the learned single Judge to complete the reconsideration of the application filed by the respondent herein seeking condonation of delay in filing the returns, we now extend the said time by three months from the date of receipt of certified copy of this judgment.

Summary

Issues:
1. Legality and correctness of the order passed by the learned single Judge in W.P.No.28872/2019 dated 19/09/2019.
2. Consideration of delay in filing the return of income for the assessment year 2018-19 under Section 119(2)(b) of the Income Tax Act, 1961.
3. Exercise of discretion in genuine cases of hardship for condonation of delay in filing returns.
4. Remand of the matter to the appropriate authority for reconsideration.

Analysis:
1. The appeal questioned the legality and correctness of the order passed by the learned single Judge in W.P.No.28872/2019, dated 19/09/2019, which involved the refusal to condone the delay in filing the return of income for the assessment year 2018-19. The respondent had sought a writ to quash the order passed by the Principal Commissioner of Income Tax, Mangaluru, which resulted in the delay not being considered for processing. The learned single Judge referred to a Delhi High Court decision emphasizing the need to consider genuine hardship before condoning delays.

2. The appellants argued that the learned single Judge erred in exercising discretion in favor of the respondent, contending that the delay in filing the returns for the assessment year 2018-19 should not have been condoned. They asserted that the respondent was not entitled to claim deductions under Section 80P of the Act due to the delay. The appellants further contended that if a remand was necessary, it should have been directed to the original authority (appellant No.1) rather than to respondent No.3.

3. The respondent supported the impugned order, while the High Court found that the learned single Judge was correct in setting aside the original order and remanding the matter for reconsideration. However, the High Court noted that the remand should have been to appellant No.1 instead of respondent No.3. Therefore, the appeal was disposed of with modifications to the impugned order, extending the reconsideration time frame by three months from the date of the judgment.

4. The High Court disregarded the delay in filing the appeal and disposed of the related applications. The judgment clarified the necessity to remand matters to the appropriate authority and emphasized the consideration of genuine hardship in cases involving condonation of delays in filing returns under the Income Tax Act, 1961.