Court dismisses challenge to income tax return delay order, emphasizing limited third-party role

The court dismissed the writ petition challenging the order condoning the delay in filing income tax returns under Section 119(2)(b) of the Income Tax Act, 1961. It held that the petitioner, a third party, lacked standing (locus standi) to challenge the order once the tax authority exercised discretion based on genuine hardship. The judgment reaffirmed the limited role of third parties in challenging tax administrative decisions and emphasized the discretionary powers of tax authorities in addressing hardships, barring court interference unless there is a clear violation of law or procedure.

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Issues: Challenge to order condoning delay in filing income tax returns under Section 119(2)(b) of the Income Tax Act, 1961; Locus standi of a third party to challenge such orders.

Analysis:
1. The case involves a challenge to an order passed by the Principal Commissioner of Income Tax under Section 119(2)(b) of the Income Tax Act, 1961, condoning the delay in filing income tax returns for the assessment years 2014-2015 to 2017-2018.

2. The petitioner, a voter in the Constituency, contended that the order was arbitrary and groundless. The delay condonation could impact the 2nd respondent's compliance with the law, potentially affecting their entitlement to contest elections, prompting the writ petition.

3. The critical issue addressed by the court was whether a third party, in this case, the petitioner, had the standing (locus standi) to challenge such an order. Section 119(2)(b) empowers the 1st respondent to admit applications for exemptions or reliefs after the specified period, based on genuine hardship.

4. The court emphasized that once the 1st respondent exercises discretion under Section 119(2)(b) and considers genuine hardship, there is no scope for interference by the court, especially at the behest of a third party. Therefore, the petitioner lacked locus standi to challenge the order, leading to the dismissal of the writ petition.

5. The judgment underscores the limited role of third parties in challenging administrative decisions under tax laws, emphasizing the discretionary powers vested in tax authorities to address genuine hardships. The decision reaffirms the principle that courts should not interfere with such discretionary decisions unless there is a clear violation of law or procedure.

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