2023 (12) TMI 1094 - HC - Income Tax

Application for condonation of delay u/s 119(2)(b) - mismatch between the PAN number reflected in the income-tax return and the name of the company - primary grounds raised was Petitioner s application came to be rejected without even giving a personal hearing - name of Petitioner had been changed with the approval and sanction of the Ministry of Corporate Affairs - HELD THAT - As the notices issued u/s 139(9) of the Act were sent on Mr. Prasad Sathe s official ID, none of the other members of the company had any access to the same. Admittedly, no physical copy of notice was sent to company s registered address. All this came to light when the new team including one Mr. Kapil Bhakre (Director) and Mr. Dinesh Pande (Director-Finance), found out the error during the finalization of accounts for AY 2018-2019 and immediately took remedial action by submitting an application dated 5th November 2019 to the office of the DCIT, Circle-3, Pune. Petitioner immediately provided details about the invalid return and requested him to activate the action on the Income Tax Portal so as to enable Petitioner to rectify the return of income for AY 2017-2018. We are satisfied that the delay in not responding to the notice is received under Section 139(9) of the Act, was neither deliberate nor on account of culpable negligence or any mala-fides. The issue is only of correcting the name of Petitioner in the returns so that there is no mismatch between the PAN number and name of the company. We, therefore, direct Respondents to permit Petitioner to correct its name in the returns for AY 2017-2018 from Optra Technologies Private Limited to Optra Health Private Limited . Therefore, we hereby quash and set aside the impugned order dated 23rd December 2022. Within two weeks of this order being uploaded, the required portal will be opened for Petitioner to do the needful, under advice to Petitioner. We hasten to add that we have not examined the contents of the returns filed by Petitioner or claims which have been made in the returns. That will be subject of appropriate assessments/proceedings under the Act.

Summary

Issues Involved:
1. Validity of the income tax return due to mismatch in the company's name and PAN number.
2. Rejection of application for condonation of delay under Section 119 of the Income Tax Act.
3. Consideration of "genuine hardship" in the context of condonation of delay.

Summary:

Issue 1: Validity of Income Tax Return
The Petitioner filed a return of income for AY 2017-2018 under the name "Optra Technologies Private Limited" after the company's name had been changed. The PAN number was correctly mentioned, but due to the name mismatch, the DCIT, CPC, Bangalore, issued a communication on 29th May 2018 asking the Petitioner to rectify the defects within fifteen days. The Petitioner failed to rectify the defects within the prescribed time, leading to the return being declared invalid.

Issue 2: Rejection of Application for Condonation of Delay
To address the invalid return, the Petitioner filed an application under Section 119 of the Income Tax Act before the PCIT, which was rejected by the PCCIT, Pune, on 9th September 2021. The Petitioner then filed a Writ Petition challenging this order, which led to a de-novo consideration by the PCCIT. However, the PCCIT again rejected the application, stating that the company failed to prove any genuine hardship beyond its control.

Issue 3: Consideration of "Genuine Hardship"
The Court found the PCCIT's reason for rejection unsatisfactory. The Petitioner explained that the notices were sent to an email ID of an employee who had left the company, and no physical copy was sent to the registered address. The Court emphasized that the error was not due to deliberate or culpable negligence. It highlighted that the term "genuine hardship" should be construed liberally, as per the law laid down by the Apex Court and other High Courts. The Court cited precedents that the authorities should advance the cause of justice and not reject claims based on technicalities.

Conclusion:
The Court directed the Respondents to allow the Petitioner to correct the name in the returns for AY 2017-2018 from "Optra Technologies Private Limited" to "Optra Health Private Limited." The impugned order dated 23rd December 2022 was quashed and set aside. The required portal was to be opened within two weeks for the Petitioner to make the necessary corrections. The Court clarified that it had not examined the contents of the returns or claims made therein, which would be subject to appropriate assessments/proceedings under the Act. The Petition was disposed of with no order as to costs.