2024 (8) TMI 48 - HC - Income Tax

Delay filling ROI - Rejection of applications u/s 119(2)(b) seeking condonation of delay - applications for condonation of delay were rejected entirely on the basis that such returns of income could have been filed through the e-filing portal - HELD THAT - Section 119(2)(b) of the Income Tax Act enables the Central Board of Direct Taxes to condone delay in cases of genuine hardship. The said provision has been interpreted in several judgments, including of this Court, and it has been held that the provision should receive a liberal construction. The primary consideration in such applications is whether genuine hardship would be caused to the applicant. In this case, the applicant is an individual assessee. He resides in the United States of America. The two relevant assessment years were years when normal life was affected worldwide by the Covid-19 pandemic. The petitioner has placed on record a complaint filed by him with the Alameda County Sheriff's Office with regard to a theft from his car in which several items, including his passport, were lost. In the applications filed before the Commissioner of Income Tax, he has referred to his parents and in-laws being affected by the Covid-19 pandemic and the death of his father-in-law in the year 2021. Upon taking into account all the aforesaid facts and circumstances, in my view, these are appropriate cases to condone the delay in filing the returns of income. Therefore, the orders impugned herein are quashed and it is directed that the returns of income filing by the petitioner for assessment years 2020-2021 and 2021-2022 be processed in accordance with law.

Summary

Issues:
Challenge to rejection of applications under Section 119(2)(b) of the Income Tax Act.

Analysis:
The petitioner, a resident of the United States, sold a property in India in 2018-2019 and claimed exemption under Section 54 of the Income Tax Act. Due to Covid-19 pandemic and personal reasons, he was unable to file income tax returns for assessment years 2020-21 and 2021-2022. Upon realizing excessive deductions and eligibility for refunds, he sought condonation of delay under Section 119(2)(b), which was rejected by the Commissioner of Income Tax. The petitioner argued genuine hardship, emphasizing the exceptional circumstances that led to the delay.

The respondent contended that the petitioner failed to prove the uncontrollable reasons for non-filing of returns, opposing any interference with the impugned orders. The Court considered Section 119(2)(b) which allows condonation of delay in cases of genuine hardship. It highlighted the liberal interpretation of the provision and the necessity to assess if genuine hardship exists. The petitioner's residence in the US during the pandemic, personal losses, and documented incidents like theft affecting his ability to file returns were crucial factors in the decision.

After evaluating the circumstances, the Court found the petitioner's case suitable for condoning the delay in filing returns for the relevant assessment years. Consequently, the impugned orders were set aside, directing the processing of the petitioner's income tax returns for 2020-2021 and 2021-2022 in accordance with the law. The writ petitions were allowed without costs, and connected miscellaneous petitions were closed.