Court Upholds Condonation of Delay in Income Tax Return Filing

The High Court upheld the decision of the Writ Court, ruling that the delay of 37 days in filing the Return of Income for Assessment Year 2014-15 was condonable under Section 119(2)(b) of the Income Tax Act, 1961. Emphasizing the need to consider genuine hardship faced by the assessee, the Court dismissed the Revenue's appeal and directed the processing of the return in compliance with the law, closing the connected miscellaneous petition without costs.

---

---

Issues:
Challenge to order refusing to condone delay in filing Return of Income for Assessment Year 2014-15 under the Income Tax Act, 1961.

Analysis:
The appeal before the Madras High Court involved a challenge against an order refusing to condone a delay of 37 days in filing the Return of Income for the Assessment Year 2014-15 under the Income Tax Act, 1961. The respondent had filed a writ petition seeking to set aside the order passed by the first appellant, which was allowed by the learned single Bench. The Revenue appealed, questioning the correctness of the impugned order.

During the hearing, arguments were presented by the learned Senior Standing Counsel for the Revenue and the counsel for the respondent. The first appellant had rejected the request for condonation of delay, citing reasons related to the acceptance of the Tax Audit Report and the appointment of a new auditor. The issue revolved around Section 119 of the Act, which deals with instructions to subordinate authorities. The Board's power under Section 119(2)(b) to avoid genuine hardship in cases was crucial in this appeal.

The respondent's case highlighted delays caused by the initial auditors, leading to the appointment of a new auditor after obtaining a No Objection Certificate. The Writ Court found that the delay in filing the Return of Income did not benefit the respondent and accepted the explanation provided for the delay. The Court emphasized that unless there were malicious reasons for the delay, it should be condoned, considering the genuine hardship faced by the assessee.

The High Court concurred with the Writ Court's decision, stating that the delay of 37 days in filing the Return of Income was condonable. It emphasized that the Board's discretion under Section 119(2)(b) should be exercised based on the genuine hardship faced by the assessee. The Court dismissed the Revenue's appeal, directing the processing of the return in accordance with the law. The judgment concluded by closing the connected miscellaneous petition without costs.

---