Condonation of delay for belated returns must be judged year-wise, with undue hardship and relevant facts examined individually.

Section 119(2)(b) relief for belated returns was examined year-wise in the context of carry forward of business loss and unabsorbed depreciation for a sick industrial company. Delay could not be condoned where the assessee had filed returns beyond section 139(1) and had not secured any relevant tax-treatment provision in the rehabilitation scheme; the refusal was upheld for the assessment years 1988-89 and 1991-92. For 1989-90, the delay was only three days, and the matter had to be reconsidered because undue hardship and the assessee's sick-industry status had not been properly weighed. The governing principle is that condonation cannot be refused by a blanket approach and must consider all material circumstances.

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Issues: Whether the refusal to condone delay in filing belated returns under section 119(2)(b) of the Income-tax Act, 1961 was justified for the assessment years 1988-89, 1989-90 and 1991-92, in the context of the assessee being a sick industrial company and seeking carry forward of business loss and unabsorbed depreciation.

Analysis: The returns were filed beyond the time prescribed under section 139(1) and, by virtue of section 139(3), could not support the claimed carry forward unless the delay was condoned under section 119(2)(b). The Board was justified in disregarding labour unrest occurring in an earlier period because it had no bearing on the relevant assessment years. The Court also noted that the assessee had not earlier sought inclusion or amendment of any suitable tax-treatment provision in the rehabilitation scheme framed under the Sick Industrial Companies (Special Provisions) Act, 1985, even though the Board's own circulars recognised that a sanctioned scheme under section 18 could override the Income-tax Act on matters covered by it. For the assessment years 1988-89 and 1991-92, the assessee's omission and the absence of a relevant scheme provision meant that no equitable relief was warranted. For the assessment year 1989-90, however, the delay was only three days, and the Board had not considered whether such a short delay, viewed with the hardship arising from the assessee's sick-industry status, merited condonation.

Conclusion: The refusal to condone delay was upheld for the assessment years 1988-89 and 1991-92, but the matter relating to the assessment year 1989-90 was required to be reconsidered afresh.

Final Conclusion: The writ petition succeeded only to the limited extent of the assessment year 1989-90, for which the matter was sent back for fresh decision, while the rejection was maintained for the remaining assessment years.

Ratio Decidendi: Relief under section 119(2)(b) of the Income-tax Act, 1961 depends on a consideration of undue hardship and all relevant circumstances, and a condonation request cannot be rejected by a blanket refusal without examining the material facts year-wise.

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