2023 (12) TMI 221 - HC - Income Tax

Condonation of delay of one day in filing the income tax return - Power of Principal Commissioner/the Principal Chief Commissioner of Income Tax to condone the delay in filing return, on consideration given to the application filed by an assessee for not filing return on time - HELD THAT - On a perusal of Section 119(2)(b) of the Act, it is evident that the said Section only empowers the Board to admit an application or claim for exemption, deduction, refund or any other relief under the Act, after the expiry of the period specified by or under the Act for making such application or claim and deal with the same on merits, in accordance with law. The Board has delegated such power to the Principal Chief Commissioner of Income Tax/the Principal Commissioner of Income Tax vide its circular No. 9/2015 dated 9.6.2015. A Division Bench of this Court had an occasion to consider the provisions of Section 119(2)(b) of the Act and the said circular in the case of Daisy 2023 (10) TMI 1323 - KERALA HIGH COURT wherein the Court has been of the opinion that the Circular empowers the Principal Chief Commissioner/the Principal Commissioner of Income Tax to consider the merits of the refund claim while exercising the delegated power under Section 119(2)(b) of the Act, which would amount to circumvent the provisions of the Act. It has been further held that the Principal Chief Commissioner or the Principal Commissioner of Income Tax has no power to consider the merits of the refund application and what is required to be considered is the merits of the application for condonation of delay only. Considering the provisions of Section 119(2)(b) of the Act and the Circular dated 9.6.2015 aforesaid, the order impugned herein, Ext. P7, is unsustainable and the same is hereby set aside. The writ petition stands allowed. The matter is remitted back to the file of the Principal Commissioner of Income Tax to pass fresh orders on the application of the petitioner-assessee for condonation of delay in filing the return.

Summary

Issues involved: Impugning the order rejecting the application for condonation of delay in filing income tax return for assessment year 2021-22 under Section 119(2)(b) of the Income Tax Act, 1961.

Summary:
The present judgment deals with a writ petition challenging the order passed by the Principal Commissioner of Income Tax, Kozhikkode, rejecting the application for condonation of delay in filing the income tax return for the assessment year 2021-22. The order was impugned on the grounds that the Principal Commissioner considered the merits of the claim, which was beyond the scope of his authority under Section 119(2)(b) of the Act.

The petitioner argued that the Principal Commissioner did not have the power to consider the merits of the claim, citing a previous Division Bench decision. On the other hand, the Department's counsel contended that the application was rejected because the assessee failed to provide substantiating evidence for the claims made.

Upon analyzing Section 119(2)(b) of the Act, the Court found that the said provision only empowers the Board to admit applications for relief after the specified period and deal with them on merits. However, the Board had delegated this power to the Principal Commissioner. The Court referred to the previous decision, which held that the Principal Commissioner should only consider the merits of the application for condonation of delay, not the actual claim itself.

Consequently, the Court set aside the impugned order, remitting the matter back to the Principal Commissioner for fresh consideration. It was emphasized that the Principal Commissioner should focus solely on the application for condonation of delay and not delve into the merits of the petitioner's claim.

In conclusion, the writ petition was allowed, and any pending interlocutory application was dismissed.