2023 (8) TMI 517 - HC - Income Tax

Condoning the delay in filing the refund application - application filed by the petitioner u/s 119(2)(b) of the IT Act has been rejected by CIT(A) - petitioner submits that the Commissioner of Income Tax instead of considering the application of the petitioner for condonation of delay on merit has considered the whole case on merit, and rejected the claim without condoning the delay - HELD THAT - Circular No. 9/2015 dated 09.06.2015 prescribes the conditions for condonation of delay in processing the claim for refund by an assessee. The powers of acceptance or rejection of the applications within the monetary limits, had been delegated to the Principal Chief Commissioner of Income Tax - The aforesaid circular further provides that a belated application for supplementary claim of refund can be admitted for condonation provided other conditions as referred to above, are to be fulfilled. It is not in dispute that the circular issued by the CBDT are binding on the Income Tax authorities. Paragraph 5 of circular No. 9/2015 mentioned above specifically provides that the authority is required to show that the income/loss declared and/or refund claimed is correct and genuine and also that the case is of genuine hardship on merits. Therefore, the Income Tax authority which is empowered to condone the delay in filing the application for refund is to ensure itself that the claim of the assessee is genuine and bonafide. Therefore, find not much substance in the submission of petitioner that the commissioner was not required to enter into the merit of the claim of the petitioner and he should have confined himself to the genuine hardship of the petitioner while considering the application for condoning the delay in filing the application. Even otherwise when the circular itself provides that the claim of the assessee has to be considered and the authority is required to reach to the satisfaction as to the genuineness of the claim, then only the question of condoning the delay in filing the refund application arises. Therefore, no substance in this writ petition, which is hereby rejected.

Summary

Issues involved: Impugning the order rejecting the application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961.

Summary:

Issue 1: Condonation of delay in filing the return for assessment year 2012-13
The petitioner filed a return of income beyond the prescribed time limit, which was processed under Section 139 of the IT Act. Circular No. 9/2015 sets conditions for condonation of delay in processing refund claims, delegating powers to accept or reject applications within monetary limits. The authority must ensure correctness of income/loss declared, genuine hardship, and may direct inquiries to ascertain claim accuracy.

Issue 2: Consideration of claim for condonation of delay
Petitioner's counsel argued that the Commissioner rejected the claim without touching on the merit of the condonation application, contrary to provisions of the Act and circular. The counsel relied on a judgment emphasizing the need to consider genuine hardship for condonation. Revenue Department's counsel contended that if the claim is not genuine, delay cannot be condoned, citing circular provisions requiring consideration of both merit and delay condonation.

Judgment:
The Court noted circular provisions binding on Income Tax authorities, requiring verification of genuine hardship and correctness of claims. The Court found no merit in the argument that the Commissioner should only focus on hardship for condonation, as both claim genuineness and hardship must be considered. Referring to a previous judgment, the Court emphasized the need to establish genuine hardship for condonation. As the circular mandates consideration of the claim's genuineness, the Court rejected the writ petition, affirming the Commissioner's decision to reject the condonation application.