2023 (9) TMI 620 - HC - Income Tax

Court emphasizes genuine hardship in tax return delay case, quashing order and directing reevaluation.

The Court rejected an application for condonation of delay in filing an income tax return, emphasizing the importance of demonstrating genuine hardship ... Delay in filing return qua assessment year - authority rejected the ground of genuine hardship shown by petitioner and thus declined to extend the benefit of Section 119(2)(b) of IT Act r/w CBDT Instruction No.9 of 2015 dated 09.06.2015 - HELD THAT:- From the impugned order Annexure P/9, it does not appear that the competent authority has applied its mind to the Affidavit filed by the Chartered Accountant. The said Affidavit discloses certain compelling reasons beyond the control of petitioner and the Chartered Accountant which prevented petitioner and her Chartered Accountant to file return within the extended period of time. The possibility that if mind had been apply to the said Affidavit Annexure P/1 of the Chartered Accountant, then the result may have been different. What comes out loud and clear is that the impugned order dated 06.12.2022 passed by PCIT Jabalpur-1 (Annexure P/9) suffers from non-application of mind and; therefore, needs to be interfered with extending liberty to Revenue to apply its mind again in accordance with law. Thus the impugned order passed by Principal Commissioner of Income Tax, Jabalpur-1 (Annexure P/9) stands quashed - The competent authority i.e. Principal Commissioner of Income Tax, Jabalpur-1 is directed to reconsider the application preferred by petitioner u/s 119(2)(b) of IT Act after considering the Affidavit of Chartered Accountant and all other material on record and thereafter record his findings as regards existence or otherwise of “genuine hardship”. Issues involved:The judgment involves the rejection of an application seeking condonation of delay in filing a return under the Income Tax Act, specifically focusing on the aspect of genuine hardship and the authority's discretion to extend the benefit under Section 119(2)(b) of the IT Act.Details of the Judgment:Issue 1: Application for Condonation of DelayThe petitioner, an individual assessee, had claimed refund of excess TDS deducted by a company due to technical glitches in the IT Department Portal. The petition sought condonation of delay in filing return and refund of the excess amount. However, the application was rejected on the grounds of lack of genuine hardship shown by the petitioner.Issue 2: Consideration of Genuine HardshipThe petitioner's counsel argued that the rejection was unjustified as the Chartered Accountant's Affidavit detailed the technical glitch that prevented the timely filing of the return. The Court noted that the competent authority did not adequately consider the Affidavit, which presented compelling reasons beyond the petitioner's control. The Court emphasized the importance of assessing genuine hardship as per Section 119(2)(b) of the IT Act.Issue 3: Non-Application of Mind by the AuthorityThe Court observed that the impugned order lacked a proper application of mind by the Principal Commissioner of Income Tax, Jabalpur-1. It was highlighted that a thorough consideration of the Chartered Accountant's Affidavit could have led to a different outcome. Consequently, the Court quashed the order and directed the authority to reevaluate the application, considering all relevant material and recording findings on the existence of genuine hardship within two months.Conclusion:The judgment underscores the significance of demonstrating genuine hardship in seeking condonation of delay in filing returns under the IT Act. It emphasizes the need for authorities to diligently consider all evidence presented, especially when technical glitches are cited as reasons for delays. The decision provides clarity on the process of evaluating such applications and ensures a fair assessment of genuine hardships faced by taxpayers.