2022 (8) TMI 1031 - HC - Income Tax

Condonation of delay of 23 days in filing the return of the income u/s 119(2) - bonafide reasons of delay - HELD THAT - As the assessee explained by cogent reasons that the accountant who was handling the work to file Return etc. suffered Covid 19 virus and due to his indisposed health the completion of work was delayed resulting into delayed filling of return. Chief Commissioner of Income Tax could not have been insensitive to the cause which was genuine. In the matters of condonation of delay, where the condonation is to be permitted to avoid the genuine hardship, liberal rather than technical approach is expected from the authorities. It is the substantive consideration and not the pedantic approach which should govern the decision under section 119(2)(b) of the Act. Commissioner has come to a conclusion that there was nothing on record to suggest that it was a case of genuine hardship. There is no basis for arriving at such conclusion by the respondent. Not only that, the respondent Commissioner proceeded to observe that the application of the assessee did not contain any convincing evidence to prove that the return could not be filed within extended date of 15.2.2011 and that despite the ground of sufferance of assessee s accountant from Covid there was sufficient time. The respondent Chief Commissioner of Income Tax misdirected himself in appreciating the facts of the case of the assessee and reached to the erroneous conclusion that it was not a good case of genuine hardship. The impugned order of the respondent refusing to condone the delay of 23 days in filing the return of the income of the petitioner assessee deserves to be set aside. Accordingly, it is set aside. The Return of Income of the petitioner assessee for the Assessment Year 2020-2021 shall be accepted and shall be dealt with in accordance with law by the Assessing Officer. This petition is allowed accordingly. Rule is made absolute.

Summary

Issues:
1. Condonation of delay in filing the Income Tax Return for Assessment Year 2020-2021 under section 119(2)(b) of the Income Tax Act, 1961.

Analysis:

Issue 1: Condonation of delay in filing the Income Tax Return

The petitioner filed a petition under Article 226 of the Constitution to set aside an order dated 30.11.2021, where the Chief Commissioner of Income Tax-1 rejected the petitioner's application to condone the delay in filing the Return of Income for the Assessment Year 2020-2021. The petitioner declared a total loss of Rs. 15 lakhs and filed the return on 10.3.2021, with a delay of 23 days. The delay was attributed to the accountant's illness due to Covid-19 and backlog of work. The petitioner contended that the delay was genuine and requested condonation based on the circumstances. The respondent argued that the delay was due to the petitioner's lethargic approach and lack of due diligence. The respondent's decision was based on the merits of genuine hardship and correctness of the claim.

The petitioner cited Circular No. 9/2015 issued by the Central Board of Direct Taxes, emphasizing the consideration of genuine hardships in condoning delays under section 119(2)(b) of the Act. The circular outlined conditions for accepting or rejecting applications, ensuring correctness of claims and genuine hardship on merits. The Kerala High Court and Bombay High Court interpretations of 'genuine hardship' in similar cases were referenced to support a liberal approach in condoning delays to avoid injustice.

The court examined section 119(2)(b) of the Act, emphasizing the Board's wide power to authorize condonation of delays to avoid genuine hardships. The court noted that a substantive consideration, not a technical approach, should govern decisions under this section. In this case, the court found the respondent's conclusion that there was no genuine hardship to be erroneous. The court held that the delay was justified due to the accountant's illness, and a liberal approach should be adopted in such cases. Consequently, the court set aside the order refusing to condone the delay and allowed the petition, directing the Assessing Officer to accept and process the petitioner's Income Tax Return for the Assessment Year 2020-2021 in accordance with the law.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the court's reasoning behind its decision regarding the condonation of delay in filing the Income Tax Return for the specified assessment year.