2025 (3) TMI 1004 - HC - Income Tax

Entitlement to condone delay in filing a corrected return condoned u/s 119(2) - petitioner had committed a mistake in showing the correct information in column-15 and column-18 and have clubbed the dis-allowance of expenditure claimed under Section 37 in column-23 which was pointed out by the CPC while analyzing the return as per the Centralized Processing of Returns Scheme 2011 HELD THAT - CPC issued the intimation dated 03/09/2019 pointing out the mistake in the return and therefore the petitioner was called upon to submit the response thereto. The petitioner having found such mistake has therefore rightly filed a corrected/revised return u/s 119 (2) (b) of the Act as the time to file the revised return had already expired on 31/03/2019 as per the provision of Section 139 (5). The respondent was therefore only required to consider such revised return as there was only a correction of the mistake in the presentation of the correct figures in the column-15 and column-18 instead of clubbing the same in column-23 of the return and instead thereof the respondent has enlarged the scope of Section 119 (2) (b) by not redressing such minor corrections to be made in the return of income and has rejected the same on the ground of genuine hardship and advising the petitioner to avail the other legal resources u/s 254 or Section 154 unmindful of the fact situation that there was no impact on the corrected return on the taxable income of the petitioner and it was only to facilitate the CPC to process the return so that the petitioner is entitled to the refund if any so as to compute the taxable income of the petitioner in accordance with law as provided under Section 143 (1) (a) of the Act. The respondent no.2 ought to have allowed the applications to condone the delay in filing the corrected/revised return which was a formality only as only the correct presentation in Form-ITR-6 was not made by the petitioner which has prevented the CPC from processing the return. These petitions succeed and are accordingly allowed. Impugned order dated 24/08/2023 passed u/s 119 (2)(b) is hereby quashed and set aside and the delay in filing the revised return is hereby ordered to be condoned and respondent no.1 is directed to process/transmit the revised return filed by the petitioner on 06/09/2019 to CPC to process the same in accordance with law.

ISSUES PRESENTED and CONSIDERED

The primary legal issues considered in this judgment were:

1. Whether the petitioner was entitled to have the delay in filing a corrected return condoned under Section 119(2)(b) of the Income Tax Act, 1961, given the circumstances of the case.

2. Whether the Centralized Processing Center (CPC) and the Jurisdictional Assessing Officer (JAO) correctly processed and responded to the petitioner's corrected return filed after the statutory deadline.

3. Whether the petitioner was eligible for a refund based on the corrected return, and if the refusal to process the return and grant the refund was justified.

ISSUE-WISE DETAILED ANALYSIS

1. Delay in Filing Corrected Return under Section 119(2)(b)

The legal framework under Section 119(2)(b) allows for the condonation of delay in certain circumstances where genuine hardship is demonstrated. The petitioner argued that the delay was due to receiving an intimation of a mistake after the deadline for filing a revised return had passed. The Court examined whether the petitioner demonstrated genuine hardship and whether the application for condonation was improperly rejected.

The Court found that the petitioner had no option but to file the corrected return electronically after the CPC's intimation of the error, as the deadline for revising the return had expired. The petitioner had filed applications to condone the delay, explaining the circumstances. However, the respondent rejected these applications, citing a lack of genuine hardship and suggesting other legal remedies, which the Court found were not applicable in this context.

The Court concluded that the rejection of the application to condone the delay was inappropriate, as the corrected return was necessary to address the CPC's intimation and facilitate the processing of the return for a refund.

2. Processing and Response by CPC and JAO

The CPC is responsible for processing returns under the Centralized Processing of Returns Scheme, 2011. According to the scheme, the CPC should process returns and issue intimations regarding any discrepancies. Upon receiving such an intimation, the petitioner filed a corrected return, which the CPC forwarded to the JAO.

The Court noted that the CPC's role was to process the return and that the petitioner had responded appropriately to the intimation by filing a corrected return. The CPC's failure to process the corrected return and the subsequent rejection by the JAO were deemed improper by the Court.

3. Eligibility for Refund

The petitioner sought a refund based on the original return, which was not processed due to the error identified by the CPC. The Court found that the corrected return did not alter the taxable income but merely corrected the presentation of figures. The refusal to process the return and grant the refund was found to be unjustified, as the petitioner was entitled to the refund based on the corrected figures.

SIGNIFICANT HOLDINGS

The Court held that the rejection of the application to condone the delay in filing the corrected return was improper. It emphasized that the corrected return was necessary to address the CPC's intimation and facilitate the processing of the return for a refund. The Court quashed the impugned order dated 24/08/2023 and directed the respondent to process the revised return filed on 06/09/2019.

Core Principles Established:

"The respondent no.2 ought to have allowed the applications to condone the delay in filing the corrected/revised return which was a formality only as only the correct presentation in Form-ITR-6 was not made by the petitioner which has prevented the CPC from processing the return."

The Court underscored the importance of considering the factual circumstances and the necessity of processing corrected returns to ensure fair treatment and avoid undue hardship to taxpayers.

The Court directed that the delay in filing the revised return be condoned and ordered the respondent to process the revised return in accordance with the law, ensuring the petitioner receives the legitimate refund due.

← Previous Next →