2014 (11) TMI 183 - HC - Income Tax

Court upholds Commissioner's decision to reject condonation application under Income Tax Act for assessment years.

THE TRAVANCORE CEMENTS EMPLOYEES CO-OPERATIVE BANK LTD. Versus THE COMMISSIONER OF INCOME TAX,

The Court upheld the Commissioner's decision to reject the condonation application under Section 119(2)(b) of the Income Tax Act for assessment years ... Rejection of application of condonation of delay u/s 119(2)(b) - Non-acceptance of returns – Held that:- It cannot be said that the delay was not attributable to the Society - The statutory audit to be carried out by the department was delayed, but the auditor has specifically noticed in the audit report that the delay was attributable to the Society - there is further delay after receipt of the audit report which the petitioner seeks to balance the Chartered Accountant who, according to the petitioner has to conduct the audit under Section 44AB of the Act - The Commissioner have exercised the discretionary power and rejected the delay condonation application, the extra ordinary jurisdiction under Article 226 of the Constitution of India cannot be invoked, causing interference of the discretion exercised or the refusal to exercise it by the Commissioner – Decided against assessee. Issues:Non-acceptance of returns, rejection of application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961 for assessment years 2006-07 and 2008-09.Analysis:The petitioner, a Co-operative Society, failed to file returns within the due date, citing mandatory audit requirements by the Co-operative department of the State. The delay in filing was attributed to the delay in the audit process, not caused by the petitioner, relying on a precedent judgment [(2009) 311 ITR 177 (Kerala)].The Standing Counsel distinguished the cited judgment, arguing that the delay was due to the petitioner and not the State department. Audit certificates were received after significant delays, leading to delays in filing returns, which were further extended even after audit completion. The Commissioner rejected the condonation application due to unsatisfactory explanations for the delays.In a previous case, delay condonation was granted due to delays not attributable to the assessee and financial hardships faced. However, in the current case, delays were found to be the responsibility of the petitioner Society, with no grounds for condonation based on hardships presented.The petitioner raised conflicting contentions based on different sections of the Income Tax Act for the two assessment years, with no plea of hardship. The Court declined to interfere with the Commissioner's discretionary power in rejecting the condonation application under Article 226 of the Constitution of India, leading to the dismissal of the Writ petition with parties bearing their respective costs.