Company Gets Relief for Late Tax Return Filing After Email Notice Mix-Up Under Section 119(2)(b)

Bombay HC allowed petitioner's application for condonation of delay under Section 119(2)(b) of Income Tax Act. The court found delay in responding to Section 139(9) notices was neither deliberate nor due to culpable negligence, as notices were sent to former director's email without physical copies to registered address. Company discovered error during account finalization and took immediate remedial action. HC directed respondents to permit correction of company name in returns from previous name to current name, quashing impugned order dated 23rd December 2022. Portal to be opened within two weeks for necessary corrections.

---

---

Issues Involved:
1. Validity of the income tax return due to mismatch in the company's name and PAN number.
2. Rejection of application for condonation of delay under Section 119 of the Income Tax Act.
3. Consideration of "genuine hardship" in the context of condonation of delay.

Summary:

Issue 1: Validity of Income Tax Return
The Petitioner filed a return of income for AY 2017-2018 under the name "Optra Technologies Private Limited" after the company's name had been changed. The PAN number was correctly mentioned, but due to the name mismatch, the DCIT, CPC, Bangalore, issued a communication on 29th May 2018 asking the Petitioner to rectify the defects within fifteen days. The Petitioner failed to rectify the defects within the prescribed time, leading to the return being declared invalid.

Issue 2: Rejection of Application for Condonation of Delay
To address the invalid return, the Petitioner filed an application under Section 119 of the Income Tax Act before the PCIT, which was rejected by the PCCIT, Pune, on 9th September 2021. The Petitioner then filed a Writ Petition challenging this order, which led to a de-novo consideration by the PCCIT. However, the PCCIT again rejected the application, stating that the company failed to prove any genuine hardship beyond its control.

Issue 3: Consideration of "Genuine Hardship"
The Court found the PCCIT's reason for rejection unsatisfactory. The Petitioner explained that the notices were sent to an email ID of an employee who had left the company, and no physical copy was sent to the registered address. The Court emphasized that the error was not due to deliberate or culpable negligence. It highlighted that the term "genuine hardship" should be construed liberally, as per the law laid down by the Apex Court and other High Courts. The Court cited precedents that the authorities should advance the cause of justice and not reject claims based on technicalities.

Conclusion:
The Court directed the Respondents to allow the Petitioner to correct the name in the returns for AY 2017-2018 from "Optra Technologies Private Limited" to "Optra Health Private Limited." The impugned order dated 23rd December 2022 was quashed and set aside. The required portal was to be opened within two weeks for the Petitioner to make the necessary corrections. The Court clarified that it had not examined the contents of the returns or claims made therein, which would be subject to appropriate assessments/proceedings under the Act. The Petition was disposed of with no order as to costs.

---