Condonation of delay for genuine hardship requires consideration of reorganisation effects and supporting material before refusal.

Condonation of delay under section 119(2)(b) is intended to prevent genuine hardship, and a refusal must consider all material circumstances. The rejection was found unsustainable because it did not address whether denial of relief would cause hardship in light of the large carried-forward loss and the reorganisation of the Board under the Madhya Pradesh Reorganisation Act, 2000. The matter was remitted for fresh consideration, with permission to file additional grounds, an affidavit, and supporting material on genuine hardship.

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Issues: Whether rejection of the request for condonation of delay in filing the return under section 119(2)(b) was unsustainable for failure to consider genuine hardship and the consequences of the reorganisation of the Board, and whether the matter should be remitted for fresh consideration.

Analysis: The power under section 119(2)(b) is intended to be exercised to avoid genuine hardship. The delay in filing the return was substantial, but the order rejecting condonation did not address the material question whether refusal would cause hardship in view of the large carried-forward loss and the reorganisation of the Board under section 58 of the Madhya Pradesh Reorganisation Act, 2000. Since these aspects had material bearing on the request and were not properly dealt with, the rejection could not be sustained as it stood. The Court also found it to afford an opportunity to file a supplementary application with affidavit and supporting material before the Board.

Conclusion: The rejection of condonation was set aside and the matter was remitted to the Central Board of Direct Taxes for reconsideration after permitting the petitioner to place additional grounds and material, including the question of genuine hardship.

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