2023 (4) TMI 245 - HC - Income Tax

Condonation of delay in filing income tax return - delay of 36 days in filing the loss return - HELD THAT - As during the relevant period, COVID- 19 pandemic was in second phase. Though, the date has been extended till 15/02/2021, the fact remains that during this period, new variant of virus of COVID-19 was emerged. That apart, there is a statement on oath of the Chartered Accountant of the petitioner contending that there was marriage of her elder sister on 16/02/2021 and she was discharging her family obligations. Rather, she has taken the responsibility mentioning that there was failure on her part to file return of income tax of the petitioner before the due date. As it is settled principle that for the mistake on the part of the professionals, the litigant should not suffer. Thus firstly, the affidavit of the Chartered Accountant, which has neither been disputed nor controverted by the respondents. Secondly, due to fault on the part of professional, the party should not suffer. Thirdly, that the delay is only of 36 days. Considering the phrase genuine hardship used in Section 119(2)(b) of the Act, to be construed liberally, as held in various decisions of the Apex Court and various High Courts, we find that the case of the petitioner comes within the sweep of phrase genuine hardship , particularly, when there is no allegation of mala fide or deliberate delay on the part of the petitioner. The impugned order deserves to be set aside and hereby set aside. The delay of 36 days in filing the loss return for the Assessment Year 2020-2021 is hereby condoned. The Income Tax Authorities to act accordingly.

Summary

Issues involved:
The judgment deals with the challenge to the rejection of an application for condonation of delay in filing income tax return for the Assessment Year 2020-2021 by the Principal Chief Commissioner of Income Tax, Nagpur. The issues revolve around the genuine hardship faced by the petitioner due to the COVID-19 pandemic and the reasons for the delay in filing the return.

Summary:

Challenge to Rejection of Application for Condonation of Delay:
The petitioner, a company engaged in Geospatial and Engineering Services, suffered a loss during the Financial Year 2019-2020. The due date for filing the income tax return for the Assessment Year 2020-2021 was extended due to the COVID-19 pandemic. The petitioner filed the return after the extended due date, leading to a delay of 36 days. The application for condonation of delay was rejected by the Principal Chief Commissioner of Income Tax, Nagpur, citing lack of sufficient reasons for the delay.

Interpretation of 'Genuine Hardship' under Section 119(2)(b) of the Act:
The judgment delves into the interpretation of 'genuine hardship' under Section 119(2)(b) of the Income Tax Act, emphasizing the need to construe the term liberally. Referring to legal precedents, the Court highlights that the authorities should consider substantive justice and not let technicalities defeat the cause of justice. The power to condone delay should be exercised in cases of genuine difficulty, without presuming deliberate delay or mala fides.

Consideration of Circumstances and Professional Mistakes:
The Court notes that during the relevant period, the COVID-19 pandemic was at its peak, and the Chartered Accountant of the petitioner faced personal obligations due to a family wedding. Emphasizing that the petitioner should not suffer due to professional mistakes, the judgment cites a previous case where technicality was deemed to triumph over justice. The Court underscores that a delay of 36 days, without any allegation of mala fide intent, should be considered within the realm of 'genuine hardship.'

Decision and Setting Aside of Rejection:
In light of the circumstances, the Court sets aside the order rejecting the application for condonation of delay. The delay of 36 days in filing the loss return for the Assessment Year 2020-2021 is condoned, emphasizing the need to prioritize substantial justice over technical considerations. The Income Tax Authorities are directed to act accordingly, and the rule is made absolute with no order as to costs.