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TMI Blog2023 (7) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. We accordingly reject the assessee s arguments. - SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER For the Assessee : Shri Hari Krishan For the Revenue : Shri Ramnath P. Murkunde ORDER PER SATBEER SINGH GODARA, J.M. : This assessee s miscellaneous application M.A.No.16/PUN./2023 filed u/s. 254(2) of the Income Tax Act, 1961 [in short the Act ] seeks to recall this tribunal s order dated 04.05.2022 rejecting it s main appeal ITA.No. 1423/PUN./2017. Heard both the parties at length. Case file perused. 2. A very peculiar situation has arisen in the assessee s instant miscellaneous application 16/PUN./2023 for the facts and circumstances narrated hereunder. 3. There is hardly any dispute between the parties that the assessee s main appeal ITA.No.1423/PUN./2017 filed before us; raising the sole substantive issue of sec.80IB(10) deduction, stood dismissed vide impugned order dated 04.05.2022 [wrongly incorporated as 04.05.2020], for the sole reason of non-filing of a valid sec.139(1) return. It further emerges that the assessee had very well instituted it s writ petition 4832 of 2021 before the hon ble jurisdictional high court. Their lordshi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 stated by the applicant, Mr. Panchal had attended various other limitation matters before 30.03.2012 such as returns of income for AY 2011-12 and filing of belated returns for AY 2010-11 of other clients of B. S. Mart but he filed the return of income of the applicant for AY 2011-12 afterwards on 30.09.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 not enough to establish the claim of genuine hardship. Further, the applicant has referred to the judgments, where the condonation of delay was granted by the Hon ble Courts considering the reasonable cause and genuine hardship. In this respect, it is submitted that :- a. In the case of Mr. Laddulal Sharma in writ petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(A) has dismissed the appeal filed by the applicant against the assessment and, at present, the matter is sub-judice before the ITAT (as intimated by the applicant). ix. The Hon ble High Court of Delhi vide its decision dated 12.03.2018 in case of M/s B. U. Bhandari Nandgude Patil Associates (on application for condonation of delay u/s 119 (2)(b) of the Act and order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions 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 11.10.2019 of M/s Bhatewara Associates, seeking condonation of delay of 365 days (12 months) u/s 119 (2) (b) in filing its Return of Income for A. Y. 2012-12 is rejected. 14. It is observed from the afore-quoted decision that the CBDT has rejected the explanation with respect to the delay caused due to the health condition of the son of the income tax consultant of the petitioner. The income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 said decision of this Court is usefully quoted as under :- 15. The phrase genuine hardship used in Section 119(2)(b) should have been construed liberally even when the petitioner has complied with all the conditions mentioned in Circular dated 12th October, 1993. The Legislature has conferred the power to condone delay to enable the authorities to do substantive justice to the parties by disposing of the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 that a liberal approach is adopted on principle as it is realised that: 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 3. ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Supreme Court in the case of B. M. Malani Vs. Commissioner of Income Tax and Another, (2008) 306 ITR 196 (SC). Paragraph 13 of the decision of this Court in Sitaldas K. Motwani vs. Director General of Income Tax and Others (supra) is usefully quoted as under :- 13. The apex court, in the case of B.M. Malani Vs. CIT, (2008) 306 ITR 196 (SC); (2008) 10 SCC 617, has explained the term genuine in the following words (page 207) : The term genuine as per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 justice. It is neither an allegation of malafide nor an allegation that the delay has been deliberate. We do not find that the omission to file petitioner s return by the income tax consultant to be an act of negligence. Any person in his situation would have been mentally disturbed. The very fact that not only the petitioner s ITR was not filed in time, there were also 28 others whose return filing was delayed beyond the due date. The authorities should refrain from over a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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