2023 (6) TMI 743 - HC - Income Tax

Delay filing return - Condonation of delay of 3 years, 2 months and 6 days in filing the original return - CBDT rejected the application u/s 119 - seeking to carry forward loss rejected - this application for condonation of delay has been filed after 16 years from the end of the assessment year, for which claim was filed - HELD THAT - CBDT in its Circular 9/2015 (F.No. 312/22/2015-OT) dated 9th June 2014 issued u/s 119(2)(b) has itself directed the officers to whom authority was granted not to entertain any condonation application for claim of refund/loss beyond 6 years from the end of assessment year for which such application / claim is made. Even if there was some hardship to petitioner and the delay upto 27th December 2000 could be attributed due to reasons beyond the control of petitioner due to books of accounts and other documents required for preparing return of income not being available, as noted earlier, the special audit and audit u/s 44AB got over on 27th December 2000 and 28th December 2001, respectively and return of income was filed on 5th February 2002 but strangely the condonation of delay application itself has been filed only on 26th February 2018 and, therefore, the CBDT has decided not to entertain the condonation of delay application. In a similar matter, this court in Ganesh Sahakari Bank Ltd. Vs. Government of India 2019 (4) TMI 107 - BOMBAY HIGH COURT held that apart from delay in filing the return, petitioner also has to demonstrate why application for condonation of delay could not be filed. In that case, the delay was only of 6 years, whereas in the case at hand the delay appears to be in excess of 16 years. Even a declaration of loss would require assessment so that only the genuine loss is recognised and which would be available for carry forward to be set off against future income or to claim refund. Accepting petitioner s request for such a huge delay would amount to re-opening the assessment of AY-1998-1999 in AY-2023-2024.

Summary

Issues:
The petitioner is challenging an order passed by CBDT under Section 119(2)(b) of the Income Tax Act 1961, regarding the condonation of delay in filing the original return for AY-1998-1999 to carry forward loss.

1. Impugned Order and Relevant Judgment:
The petitioner sought condonation of a 16-year delay in filing the original return for AY-1998-1999. The court noted that the judgment cited by the petitioner was not relevant as it pertained to a different matter involving a shorter delay period.

2. Reasons for Delay and Application Rejection:
The petitioner filed the return beyond the stipulated period, citing reasons such as a search and seizure operation in 1998, rejection of a writ petition in 2000, and completion of special audit and Section 44AB audit. The application for condonation of delay was filed in 2018, after 16 years from the end of the assessment year.

3. Circular on Condonation of Delay:
The CBDT Circular 9/2015 restricts the condonation of delay applications for claims of refund/loss beyond 6 years from the end of the assessment year, which aligns with the present case's delay period.

4. Court's Decision and Precedent:
The court observed that despite potential hardships faced by the petitioner, the delay in filing the condonation application after completion of audits was unreasonable. Citing a previous case, the court emphasized the necessity for demonstrating reasons for the delay in filing the application.

5. Assessment and Delay Consequences:
Allowing condonation for such a significant delay would effectively reopen the assessment of AY-1998-1999 in a later assessment year, which could impact the recognition of genuine losses for future set-offs or refunds.

6. Conclusion:
The court found no grounds to interfere and dismissed the petition, upholding the CBDT's decision to reject the condonation of delay application due to the excessive delay period and lack of sufficient justification for the delay.