Condonation granted for 23-day delay in filing income tax return due to accountant's COVID-19 incapacity; return accepted.

HC allowed the petition, holding the 23-day delay in filing the income return was satisfactorily explained by the taxpayer's accountant being incapacitated by COVID-19; the Chief Commissioner erred in adopting a technical approach and denying condonation. The court set aside the refusal to condone delay, directed acceptance of the return for the relevant assessment year, and remitted the matter to the Assessing Officer to be dealt with in accordance with law. Rule made absolute.

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Issues:
1. Condonation of delay in filing the Income Tax Return for Assessment Year 2020-2021 under section 119(2)(b) of the Income Tax Act, 1961.

Analysis:

Issue 1: Condonation of delay in filing the Income Tax Return

The petitioner filed a petition under Article 226 of the Constitution to set aside an order dated 30.11.2021, where the Chief Commissioner of Income Tax-1 rejected the petitioner's application to condone the delay in filing the Return of Income for the Assessment Year 2020-2021. The petitioner declared a total loss of Rs. 15 lakhs and filed the return on 10.3.2021, with a delay of 23 days. The delay was attributed to the accountant's illness due to Covid-19 and backlog of work. The petitioner contended that the delay was genuine and requested condonation based on the circumstances. The respondent argued that the delay was due to the petitioner's lethargic approach and lack of due diligence. The respondent's decision was based on the merits of genuine hardship and correctness of the claim.

The petitioner cited Circular No. 9/2015 issued by the Central Board of Direct Taxes, emphasizing the consideration of genuine hardships in condoning delays under section 119(2)(b) of the Act. The circular outlined conditions for accepting or rejecting applications, ensuring correctness of claims and genuine hardship on merits. The Kerala High Court and Bombay High Court interpretations of 'genuine hardship' in similar cases were referenced to support a liberal approach in condoning delays to avoid injustice.

The court examined section 119(2)(b) of the Act, emphasizing the Board's wide power to authorize condonation of delays to avoid genuine hardships. The court noted that a substantive consideration, not a technical approach, should govern decisions under this section. In this case, the court found the respondent's conclusion that there was no genuine hardship to be erroneous. The court held that the delay was justified due to the accountant's illness, and a liberal approach should be adopted in such cases. Consequently, the court set aside the order refusing to condone the delay and allowed the petition, directing the Assessing Officer to accept and process the petitioner's Income Tax Return for the Assessment Year 2020-2021 in accordance with the law.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the court's reasoning behind its decision regarding the condonation of delay in filing the Income Tax Return for the specified assessment year.

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