Court Quashes Order Rejecting Delay in Tax Return; Remands for Reevaluation with Personal Hearing Directive

The HC quashed the impugned order dated 24th December 2020, which rejected the petitioner's request for condonation of delay in filing an income tax return. The court found procedural discrepancies and a lack of opportunity for the petitioner to explain the delay. The matter was remitted back to the Board for reevaluation, with instructions to ensure a personal hearing for the petitioner. The court emphasized that the order must be directly signed by the Board or its members. All rights and contentions were kept open, and the petition was disposed of.

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Issues involved:
The issues involved in this case are the delay in filing the income tax return for the assessment year 2016-2017, the request for condonation of delay, and the rejection of the condonation request by the tax authorities.

Delay in Filing Income Tax Return:
The petitioner, a joint venture, filed its income tax return belatedly due to the concerned person responsible for filing being indisposed for medical reasons. The delay was 43 days beyond the extended deadline. The petitioner later realized the return was filed incorrectly as an AOP instead of a firm and submitted a revised return. Despite providing explanations and requested details, the impugned order dated 24th December 2020 rejected the condonation of delay.

Condonation of Delay Request:
The petitioner sought condonation of delay in filing the income tax return, explaining the reasons for the delay and submitting necessary documents. The authorities, in the impugned order, mentioned that the reasons for the delay were not supported by evidence and failed to provide the petitioner with the opportunity to explain further. The court referred to the phrase "genuine hardship" as discussed in previous judgments to emphasize the need for a liberal interpretation in such cases. The court highlighted that refusing to condone the delay could lead to a meritorious matter being dismissed at the initial stage, defeating the cause of justice.

Rejection of Condonation Request:
The court found discrepancies in the impugned order, indicating that it was passed without proper consideration by the Board. The court noted that the order was sent to officials but not to the Member whose approval was stated in the order. Additionally, the court highlighted the lack of opportunity for the petitioner to explain the delay adequately. The court emphasized the importance of a justice-oriented approach by the authorities to advance the cause of justice, especially when a substantial refund is at stake.

Conclusion:
The High Court quashed and set aside the impugned order dated 24th December 2020, remitting the matter back to the Board for fresh consideration. The court directed the Board to reevaluate the request for condonation of delay and the genuineness of the refund claim, ensuring a personal hearing for the petitioner. The court emphasized that the order must be passed and signed only by the Board or its members directly, not by any other individual, even with the Board's approval. All rights and contentions of the parties were kept open, and the petition was disposed of accordingly.

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