Commissioner's decision to reject condonation for late tax return upheld, genuine hardship required

The Court upheld the Commissioner's decision to reject the condonation application for delay in filing the income tax return for assessment year 2012-13. The Court emphasized that both the genuineness of the claim and the hardship must be considered, as per circular provisions. It was noted that the Commissioner must verify the correctness of income/loss declared and ensure genuine hardship before condoning the delay. The Court rejected the argument that only hardship should be considered, emphasizing the need to establish genuine hardship for condonation, ultimately affirming the Commissioner's decision.

---

---

Issues involved: Impugning the order rejecting the application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961.

Summary:

Issue 1: Condonation of delay in filing the return for assessment year 2012-13
The petitioner filed a return of income beyond the prescribed time limit, which was processed under Section 139 of the IT Act. Circular No. 9/2015 sets conditions for condonation of delay in processing refund claims, delegating powers to accept or reject applications within monetary limits. The authority must ensure correctness of income/loss declared, genuine hardship, and may direct inquiries to ascertain claim accuracy.

Issue 2: Consideration of claim for condonation of delay
Petitioner's counsel argued that the Commissioner rejected the claim without touching on the merit of the condonation application, contrary to provisions of the Act and circular. The counsel relied on a judgment emphasizing the need to consider genuine hardship for condonation. Revenue Department's counsel contended that if the claim is not genuine, delay cannot be condoned, citing circular provisions requiring consideration of both merit and delay condonation.

Judgment:
The Court noted circular provisions binding on Income Tax authorities, requiring verification of genuine hardship and correctness of claims. The Court found no merit in the argument that the Commissioner should only focus on hardship for condonation, as both claim genuineness and hardship must be considered. Referring to a previous judgment, the Court emphasized the need to establish genuine hardship for condonation. As the circular mandates consideration of the claim's genuineness, the Court rejected the writ petition, affirming the Commissioner's decision to reject the condonation application.

---