2023 (8) TMI 829 - HC - Income Tax

Delay in filing ITR - delay of 1095 days 730 days for the assessment years of 1994-95 1995-96 respectively - as contented by petitioner that if the delay condonation application had been allowed in the year 1998 itself within 6 months as is provided in various circulars then the record would have been available and the case would have been decided on merits - case was being decided after more than 20 years it did not lie in the mouth of the official who passed the order to say that the record could not be located and, therefore, the case could not be decided. HELD THAT - As we are of the view that when the delay condonation application was filed on 30.3.1998 then the applications ought to have been decided within the time provided by the Act. The Court is definitely of the view that at that point of time all the records would have been available. However, in view of the submission made by Department, we are of the view that the order dated 24.10.2019, which has been passed after more than 20 years of the filing of the applications on the ground that the records were not available, deserves to be set aside. The order is accordingly quashed. The Principal Commissioner, Income Tax Department -I, Agra shall now decide the applications of the petitioner which were filed on 30.3.1998 afresh. While deciding the application every effort shall be made to get the record re-constructed with the help of the petitioner and all available records.

Summary

Issues involved:
The issues involved in the judgment are the delay in filing Income Tax returns for the assessment years of 1994-95 & 1995-96, the condonation of delay applications, and the availability of records for decision-making.

Delay in Filing Income Tax Returns:
The petitioner filed Income Tax returns for the assessment years of 1994-95 & 1995-96 with a delay of 1095 days & 730 days respectively, beyond the last dates of filing. The returns were accompanied by delay condonation applications.

Condonation of Delay Applications:
The petitioner's counsel argued that circulars under Section 119(2)(b) of the Income Tax Act authorized officials to condone delays, and a similar circular was in existence at the time of filing the returns. It was contended that timely condonation would have allowed for a decision on merits, and the delay should not be used as a reason for non-decision.

Availability of Records for Decision-making:
The Department's counsel argued that the returns were not filed within the provided limitation period, making them non-est returns. However, they expressed willingness to reconstruct the record, including TDS receipts, with the petitioner's cooperation and to afford a proper hearing to the petitioner.

Judgment:
The Court held that the delay condonation applications should have been decided within the time provided by the Act when filed in 1998, as all records would have been available then. The order passed after more than 20 years, citing unavailability of records, was set aside. The Principal Commissioner was directed to decide the applications afresh, making efforts to reconstruct the record with the petitioner's assistance and all available records. The writ petition was disposed of with these observations.