9911796707
TMI Blog2022 (12) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to a deduction under that Section for the AYs 2010-11 to 2013-14. 3. Mr. Sanket S. Bora, learned counsel for the petitioner would submit that the joint venture partner, viz; Sanghvi Premise Pvt. Ltd. has already successfully claimed the said deduction for the AYs 2010-11 to 2013-14. He would submit that even the petitioner has been granted the deductions under Section 80 IB(10) for the AYs 2010-11, 2012-13 and 2013-14. He would submit that, however, with respect to the AY 2011-12 the return of income remained to be filed in time by the Chartered Accountant entrusted with the filing of returns. Learned counsel would submit that the petitioner had engaged M/s B.S. Mart and Associates as the chartered accountant firm who had recommended one Mr. Damodar Narayan Panchal as tax consultant for the task of looking after petitioner's filing of returns. However, in view of the said tax consultant's son's handicap coupled with innumerable medical emergencies in the year 2011, the said tax consultant overlooked the filing of ITR not only in petitioner's case but also of many other clients of the said chartered accountant's firm. Mr. Bora would submit that the said tax consultant's affi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... audited on 21st September, 2011 and the assessment was completed on 14th March, 2014 disallowing the deduction claimed by the petitioner under Section 80 IB (10) of the Act. It is submitted that after due consideration of all the facts, circumstances and material on record, the application dated 11th October, 2019 of the petitioner has been rejected by the impugned order dated 7th May, 2021. 9. Learned standing counsel would submit that the filing of the return of income belatedly cannot be considered as bonafide as the income tax consultant had attended various limitation matters before 30th March, 2012 and therefore filing of the return of the petitioner for AY 2011-12 was an act of negligence and therefore the inordinate delay was not condoned and the application was rightly rejected. He would submit that the application under Section 119(2)(b) of the Act has been filed only on 11th October, 2019 after a delay of more than 5 years just to avail of the deduction under Section 80 IB (10) and the said is inane and bad in law. 10. Learned counsel would submit that no man can take advantage of his own wrong and the ground of income tax consultant's omission due to his son's physic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant paragraphs of the said order under Section 119 (2) (3) are quoted as under:- "6. The applicant's submission is perused and found not tenable on account of following reasons:- i. The applicant's claim that it was not aware of the complicated and complexity of Income Tax Law and procedures is not acceptable as one cannot be permitted to plead ignorance as a defense to escape is so, it would be very easy for any person to put forward ignorance as a defence though it was aware of the law and its consequences. Further, the stature of the applicant is such that it is not supposed to be of ignorant of law. The applicant has itself admitted that out of the AYs 2008-09, 2009-10, 2010-11 & 2011-12, it had not filed the returns of income for AYs 2010-211 & 2011-12 on the stipulated time. This shows that it had not been regular in filing of returns of income on time. ii. The applicant has put forth the reason for delay in filing of the return of income mainly because of the stress faced by Mr. Damodar Narayan Panchal due to severe ill health of his son. It is claimed that Mr. Panchal was responsible for preparing the income tax returns in the office of M/s B.S. Mart. However, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. vi. The deterioration of the health of the son of Mr. Damodar Narayan Panchal has been claimed to be the main reasonable cause for delay in filing of the ROI. But still a delay of 365 days cannot be said to be justified. Mr. Panchal has been one of the employees of M/s B. S. Mart. There must have been some of the employees of M/s B. S. Mart, who could have done the work left over by Mr. Panchal due the unfortunate circumstances faced by him. The applicant's claim that if the delay is not condoned, it will lose the benefit of deduction of Rs. 2,42,88,917/- u/s 81 IB of the Income tax Act and this will certainly cause a genuine hardship to the assessee. In this respect, it is to be noted that disallowance of any claim will normally lead to hardship. The legislature has provided time limits for certain obligation under the act and these time limits have to be observed to be able to claim certain deduction, allowance and avoid interest and penalty. This may be termed as hardship but it is hardship imposed by law in the interest of proper regulation of the Act. It these time limits were to be relaxed in a particular case, mere fact that a default occurred due to some reason is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder consideration. vii. The applicant has referred to a number of other court cases in support of its claim of condonation of delay. In all such cases, either the Hon'ble Courts have condoned the delay/remitted back the matter to the Department on the matter of "circumstances beyond the control of assessee" and/or "genuine hardship" or the facts of the cases are not similar to that of the present case. viii. The condonation application was filed after seven years of filing of the return of income. Even when the assessment in the case was completed on 14.03.2014 disallowing the deduction claimed by the assessee u/s 80 IB (10) of the Act, the condonation application was filed on 14.10.2019 i.e. after more than 5 and half years later. The applicant's submission that its Chartered Accountants have never advised it about filing such petition u/s 119(2)(b) of the Act and that the delay in filing of the return will not stand in the way of deduction u/s 80 IB(10) of the Act, cannot be accepted as it seems to be an attempt to pass on its responsibility cast upon by the law of land to its Chartered Accountants when their advice as claimed, does not result in it favour. Moreover, the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the auditor except for this audit also does not help the assessee's case as any medical exigency of the magnitude being claimed would have delayed at lest a few more audits." The legal position regarding reasonable cause in the instant case of M/s Bhatewara Associates appears to be squarely covered vide above mentioned decision of the Hon'ble High Court. 7. Based on the discussions as per para 6 above, it is seen that (i) the reason for not filing return of income in time is not sufficient; in fact, it is not a valid reason. (ii) It is not a case of "genuine hardship" as the special provision of deduction u/s 80 (IB) of the Act is available only if the conditions for timely filing of ROI is fulfilled; else tax payment on the profit is required; payment of tax on income earned cannot be treated as "genuine hardship". (iii) The assessee has participated in assessment proceedings, filed appeal before CIT(A) and there is no reasonable cause for delay in filing application u/s 119 (@) (b) of the Act for : a. more than 8 years if due date of filing ROI is taken. b. More than 7 years from the date of ROI was filed. 8. In view of the above, the petition/application dated 11.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 28 other assessees of the same AY 2011-12 late. The list of those assessees is attached herewith." 15. Section 119 (2) (b) empowers the board, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order authoriz any income tax authority to admit an application or claim for any 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 to deal with the same on merits in accordance with law. The Apex Court in the case of O. P. Kathpalia Vs. Lakhmir Singh (1984) 4 SCC 66 has observed that if the refusal to condone the delay results in gross miscarriage of justice, it would be a ground to condone the delay. In Sitaldas K. Motwani vs. Director General of Income Tax and Others, (2009) SCC OnLine Bom 2195, this Court has interpreted the word "genuine hardship" used in Section 119 (2) (b) of the Act and observed that the said phrase should have been construed liberally even when the petitioner has complied with all the conditions mentioned in Circular dated 12th October, 1993. Paragraph 16 of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is legal or tax advisers. All that was necessary for the firm to do was in fact by it and its partners. That the chartered accountants made a mistake through oversight should not have been considered a fatal circumstance outweighing all the other facts and circumstances in favour of the assessee. Though to be perfect is divine, this mortal world has not as yet come across one so perfect and divine as to make no mistake at all." 17. In the case of State of Bihar and Ors. Vs. Rameshwar Prasad Singh and Anr, (2000) 9 SCC 94, in Paragraphs 6 and 14 the Supreme Court has observed as under :- "6. Power to condone the delay in approaching the court has been conferred upon the courts to enable them to do substantial justice to parties by disposing of matters on merits. This Court in Collector, Land Acquisition, Anantnag & Anr. vs. Mst.Katiji & Ors.[1987 (2) SCR 387] held that the expression 'sufficient cause' employed by the legislature in the Limitation Act is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice - that being the life purpose for the existence of the institution of courts. It was further observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... careless and negligent....." 18. The aforesaid decisions clearly indicate that the power under Section 119 (2)(b) of the Act while ascertaining genuine hardship is to be construed liberally for the reason that the authorities can do substantive justice by disposing the matter on merits. The authorities, as observed by the Supreme Court are expected to bear in mind that ordinarily an applicant applying for condonation of delay does not benefit by lodging its claim late and refusing to condone a delay can result in a meritorious matter being thrown out at the very threshold defeating the cause of justice. Substantial justice cannot be defeated by technical considerations of delay, where there is no deliberate delay or delay on account of negligence or on account of malafide. The authorities should have taken a justice oriented approach and if a claim is legitimately due to an applicant even if a delay has occasional due to genuine hardship that should not be denied on technicalities. As hold by this Court in the case of Sitaldas K. Motwani vs. Director General of Income Tax and Others (supra), the word "genuine" has to be given a liberal meaning in view of the law laid down by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eventually filed on 30th September, 2012. It is also submitted by him that for the same reason the returns of around 28 other assesses for the same assessment year was also filed late. We observed that the list of the 28 assesses along with their PAN numbers is also annexed with his affidavit (Page no. 83,84), which has not been disputed by the respondents. 21. In our view, the affidavit of the income tax consultant which has neither been disputed nor controverted by the respondents is sufficient cause for condonation of delay in filing the application under Section 119 (2)(b) of the Act. Besides it is not in dispute that the return for AY 2011-12 was in fact filed by the petitioner albeit 365 days later on 30th September, 2012. That in respect of the other years from 2010-11 to 2013-14 except 2011-12, the income tax authorities have allowed the deduction under Section 80 IB (10) through the petitioner. In our view, substantial injustice would be caused to the petitioner if the order dated 7th May, 2021 is not set aside. This is clearly a case falling within the phrase "genuine hardship". As mentioned above. Technical consideration above cannot come in the way of substantial justi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
