9911796707
TMI Blog2021 (2) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... URT ] wherein it is held that the provision regarding furnishing of audit report with the return has to be treated as a procedural proviso. It is directory in nature and its substantial compliance would suffice. In that case, the assessee had not produced the audit report along with the return of income but produced the same before the completion of the assessment. This Court took the view that the benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the assessee to produce the audit report at a later stage either beore the Income Tax Officer or before the appellate authority by assigning sufficient cause. Writ-application succeeds and is hereby allowed - The delay condonation application filed by the writ-applicant before the respondent is hereby allowed. - R/Special Civil Application No. 8977 of 2020 With R/Special Civil Application No. 9370 of 2020 With R/Special Civil Application No. 9760 of 2020 - - - Dated:- 22-12-2020 - Honourable Mr. Justice J.B. Pardiwala And Honourable Mr. Justice Ilesh J. Vora For the Petitioner(s) : Mr. Hardik V Vora For the Respondent(s) : Mrs. Mauna M Bhatt COMM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the total income NIL and claiming refund of ₹ 1,92,850=00 after declaring exemption of ₹ 73,43,699=00 under Section 11(1) of the Act 1961 and ₹ 17,50,000=00 under Section 11(2) of the Act 1961. The document was required to be confirmed by the writ-applicant using the online account. Unfortunately, the trustees of the trust failed to confirm the same and, as a result, the audit report did not get e-filed along with the return of income. 6. It is the case of the writ-applicant that the return of income was processed under Section 143(1) of the Act on 14th January 2016 by the respondent, rejecting the benefit of exemption to the writ-applicant and a demand notice for ₹ 2,17,210=00 came to be issued. The notice referred to above stated the reason for demand on account of non e-filing of the Form no.10 along with the return of income and suggested that the same may be filed with a request to condone the delay. 7. It is the case of the writ-applicant that the aforesaid notice ultimately brought the fact to their knowledge as regards the non e-filing of the Form no.10 of the Act 1961 along with the return of income. 8. On receipt of the demand notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondoning the rather than adopting a highly pedantic approach. 16. Mr.Vora, in support of his above noted submissions, has placed reliance on the following decisions : (1) Shri Chandraprabhuji Maharaj Jain vs. DCIT (Exemptions)-II, Chennai (Tax Appeal No.517 of 2019); (2)G.V.Infosutions (P.) Ltd. vs. Dy. CIT, Circle 10(2), reported in (2019) 261 taxmann.com 482 (Delhi). 17. In such circumstances referred to above, Mr.Vora prays that there being merit in his writ-application, the same may be allowed and the impugned order be quashed and set-aside. SUBMISSIONS ON BEHALF OF THE RESPONDENT : 18. On the other hand, this writ-application has been vehemently opposed by Ms.Mauna Bhatt, the learned senior standing counsel appearing for the Revenue. Ms.Bhatt would submit that no error, not to speak of any error of law, could be said to have been committed by the respondent in passing the impugned order. 19. Ms.Bhatt would submit that although the eturn of income for the Assessment Year 2014-15 was filed, yet the writ-applicant failed to e-file the Form no.10 along with the return. It is argued that the respondent has thought fit, in exercise of his discretion, not to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order. 25. For the purpose of seeking condonation of delay, the writ-applicant moved an application filed under Section 119(2) of the Act addressed to the Principal Commissioner of Income Tax (Exemption), Ahmedabad, stating as under : Sub: Request for condonation of delay under section 119(2) (b) in filing form No.10 (Rule 17(2) of the I.T. Act 1961 for AY 2014-15. Ref : Trust for Reaching the Unreached (PAN : AAATT1777H) Dear Sir, With reference to above referred subject, and under the instruction of our client, TRUST FOR REACHING THE UNREACHED we would like to state that : The object of the Trust ic charitable in nature since incorporation of the trust in the year 1987. The Trust is running various educational and health centers for providing help to the needy and poor persons. Moreover the trust is also carrying out the welfare activities to ensure better livelihood for the poor disable and weaker section of the society. We would like to state that the assessee has filed return of income for the relevant assessment year declaring NIL total income and claiming refund of ₹ 1,92,845/- vide acknowledgement no.370510010270914 dated 27.09.2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by your goodselves then it will rise to high demand resulting into shortfall of funds for achieving the objects of the trust and development of the society also. Considering all these facts we would like to request you to accept the Form 10 and condone the delay in filing of Form 10 for AY 2014-15 and grant us the permission for filing the same. 26. The respondent, however, declined to condone the delay and rejected the said application by the impugned order dated 26th August 2019 (Annexure-D to the writ-application), assigning the following reasons in the impugned order : ORDER U/S.119(2)(b) OF THE INCOME-TAX ACT, 1961 The applicant, Trust for Reaching the Unreached, Vadodara has filed an application dated 11.2.2019, for condonation of delay in filing the form No.10 of the I.T. Act, 1961 for the A.Y. 2014-15. In its application it is stated that the trust is established since 1987 and is running various educational and health centres for providing help to the needy and poor persons. Moreover the trust is also carrying out the welfare activities to ensure better livelihood for the poor, disabled and weaker section of the society. It has further submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out defective. Thereafter, it filed revised return on 22.11.2014 which is processed u/s 143(1) on 14.1.2016 resulting into demand of ₹ 2,17,210/-. After receipt of recovery letter dated 26.12.2018, the assessee e-filed Form 10 for claiming exemption u/s 11(2) of the Act for ₹ 17,50,000/- on 11.2.2019 which is after 37 months from the processing of Return of Income. The assessee in its reply filed on 15.4.2019 has failed to prove genuine hardship on account of which it could not file Form no.10 on time. As stated by them, the trust is running various educational and health centres for providing help to the needy and poor persons since its inception i.e. from 1987, means trust is very old and well aware about the legal provisions of I.T. Act. This was not the new provision which came to be implemented first time in the year under consideration. 5. The assessee's contention that the income tax work was handed over to a Tax Consultant who was not having exposure in the area of work and he had not filed the Form 10, is found unsubstantiated. No such details and evidences have been placed on record to support said contention. Further it cannot be the reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to New Collins Concise English Dictionary, the Supreme Court accepted the position that genuine means not fake or counterfeit, real, not pretending (not bogus or merely a ruse). Further, a genuine hardship would, inter alia, mean a genuine difficulty. The ingredients of genuine hardship, must be determined keeping in view the dictionary meaning thereof and legal conspectus attending thereto. For the said purpose, another well known principle, namely, that a person cannot take advantage of his own wrong, may also have to be borne in mind. Compulsion to pay any unjust dues per se would cause hardship. But a question as to whether the default in payment of the amount was due to circumstances beyond the control of the assessee, also bears consideration. 12. In the case of R. Seshammal (supra), the Madras High Court was pleased to observe as under (page 187 of 237 ITR): This is hardly the manner in which the State is expected to deal with the citizens, who in their anxiety to comply with all the requirements of the Act pay monies as advance tax to the State, even though the monies were not actually required to be paid by them and there after seek refund of the monies so pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund. 14. In the case of Bombay Mercantile Co-operative Bank Ltd. (supra), this court again observed that it is well settled that in matters of condonation of delay highly pedantic approach should be eschewed and a justice-oriented should be adopted. It also observed that a party should not be made to suffer on account of technicalities. 23. In the light of the aforesaid discussion, we are of the opinion that an acceptable explanation was offered by the petitioner and a case of genuine hardship was made out. The refusal by the Central Board of Direct Taxes to condone the delay was a result of adoption of an unduly restrictive approach. The Central Board of Direct Taxes appears to have proceeded on the basis that the delay was deliberate, when from the explanation offered by the petitioner, it is clear that the delay was neither deliberate nor on account of culpable negligence or any mala fides. Therefore, the impugned order dated May 16, 2006, made by the Central Board of Direct Taxes refusing to condone the delay in filing the return of income for the assessment year 1997-98 is liable to be set aside. (ii) In Jay Vijay Express Carriers vs. Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequences, such requirement would be mandatory. If the statute provide that a particular thing should be done, it should be done in the manner prescribed and not in any other way (see para 26). (iv) In the case of B.M.Malani vs. Commissioner of Income Tax and another, (2008) 219 CTR 313), the Court observed : 8. The term 'genuine' as per the New Collins Concise English Dictionary is defined as under : 'Genuine' means not fake or counterfeit, real, not pretending (not bogus or merely a ruse). For interpretation of the aforementioned provision, the principle of purposive construction should be resorted to. Levy of interest although is statutory in nature, inter alia for recompensating the Revenue from loss suffered by non-deposit of tax by the assessee within the time specified therefor. The said principle should also be applied for the purpose of determining as to whether any hardship had been caused or not. A genuine hardship would, inter alia, mean a genuine difficulty. That per se would not lead to a conclusion that a person having large assets would never be in difficulty as he can sell those assets and pay the amount of interest levied. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order, on the face of it, do not appear to be whimsical or arbitrary reasons and it is equally true that such investment could be made by assessee very well before the cut off date also when she was physically present in India or even when she had gone back to USA on 20th February 2013. Nonetheless, the delay of six months in the circumstances in which it occurred, especially, in view of the fact that the investment condition was undisputably met by the assessee could have been condoned taking a judicious and holistic view of the facts. The wide powers of the Central Board of Direct Taxes or other higher authorities of the Department to whom such powers can be delegated under Section 119 of the Act, need not always take only a pro revenue approach in such matters. Their approach in such cases should be equitious, balancing and judicious which should reflect the application of mind to the facts of the case and before denying the genuine claim of the assessee on the grounds of mere delay in making such claim, something more than the user of innocuous terms as employed in the present case, should be forthcoming. Technically, strictly and literally speaking, the Board might ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sided and came to India not only to meet her family members, but to sell the immoveable property belonging to her and sought to avail the genuine exemption from such tax liability upon making the investment in the prescribed investment in the form of Bonds of Infrastructure which she did make in the National Highways Authority. 31. We may also refer to and rely upon a decision of the Delhi High Court in the case of G.V.Infosutions Pvt. Ltd. vs. Deputy Commissioner of Income Tax, Circle 10(2) and others, reported in (2019) 261 taxmann.com 482 (Delhi). We may quote the relevant observations thus : 8. The rejection of the petitioner's application under Section 119(2)(b) is only on the ground that according to the Chief Commissioner's opinion the plea of omission by the auditor was not substantiated. This court has difficulty to understand what more plea or proof any assessee could have brought on record, to substantiate the inadvertence of its advisor. The net result of the impugned order is in effect that the petitioner's claim of inadvertent mistake is sought to be characterised as not bonafide. The court is of the opinion that an assessee has to take leave of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income but produced the same before the completion of the assessment. This Court took the view that the benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the assessee to produce the audit report at a later stage either beore the Income Tax Officer or before the appellate authority by assigning sufficient cause. 34. In the result, this writ-application succeeds and is hereby allowed. The impugned order passed by the respondent dated 26th August 2019 (Annexure-D to this writ-application) is hereby quashed and set-aside. The delay condonation application filed by the writ-applicant before the respondent is hereby allowed. 35. In view of the above, the connected two writ-applications also succeed and are hereby allowed. The impugned orders therein are quashed and set-aside and the delay condonation applications stand allowed. 36. It is declared that the writ-applicants are entitled to seek exemption under Section 12 of the Act. The authorities below are directed to give effect to such exemption to the assessees and pass necessary consequential orders in this regard. However, as fairly submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
