2019 (1) TMI 1412 - HC - Income Tax

Court allows application for tax return delay, emphasizes transparency in administrative actions.

The Court set aside the order rejecting the application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961, and remanded the ... Condonation of delay preferred under Section 119(2)(b) - reason for delay - Held that:- Authority ought to have put the information to the applicant/petitioner herein and ought to have afforded an opportunity to the petitioner to explain the information that was made available to the Authority by the AO. The very fact that the AO had reported the fact of the petitioner taking treatment makes out a prima facie case for the petitioner. That being the case, if the Authority desires to adversely infer based on the information furnished by the AO, then he ought to have put it to the petitioner before relying upon the said information to infer adversely. In that view of the matter, this Court is of the opinion that the 1st respondent-Authority ought to have disclosed and discussed the gist of the information that had been obtained by the Assessing Officer and upon which reliance has been placed. In that view of the matter, this Court is of the opinion that the order impugned is a non-speaking order. Issues Involved:Challenge to order rejecting application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961.Detailed Analysis:Issue 1: Condonation of Delay ApplicationThe petitioner challenged the order rejecting the application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961. The petitioner, a small business owner in the transportation sector, cited ill-health and delayed payments from customers as reasons for not filing tax returns for the assessment years 2007-08 and 2008-09. The petitioner's consultant advised filing the application for belated tax return consideration.Issue 2: Burden of ProofThe respondents argued that the petitioner failed to demonstrate genuine hardship or provide a satisfactory explanation for the delay in filing the returns. They contended that the petitioner should have presented a compelling case to justify the delay.Issue 3: Judicial ReviewUpon hearing both counsels and reviewing the impugned order, the Court found that the Authority should have accepted the reasons presented by the petitioner. The Court noted that the petitioner's explanation of undergoing treatment for a chronic illness during the relevant period was not adequately considered by the Authority. The Court emphasized that the Authority should have informed the petitioner about the information provided by the Assessing Officer and allowed the petitioner an opportunity to clarify before making adverse inferences.Issue 4: Non-Speaking OrderThe Court held that the impugned order was a non-speaking order as it failed to disclose and discuss the crucial information obtained by the Assessing Officer, upon which reliance was placed. The Court emphasized the importance of providing a reasoned decision and ensuring transparency in administrative actions.JudgmentThe Court set aside the order dated 22.11.2013 and remanded the matter back to the 1st respondent for reconsideration. The petitioner was directed to appear before the Authority on a specified date, and the Authority was instructed to hear the petitioner and dispose of the application within a further eight weeks. The petition was disposed of accordingly, granting the petitioner an opportunity for a fresh consideration of the condonation of delay application.